THE Bangko Sentral ng Pilipinas (BSP) on Friday, committed to effectively implement Republic Act (RA) 11901 or "The Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022."

BSP made the promise after RA 11901, also known as the "Agri-Agra Law," lapsed into a new law in July.

In a statement, BSP Governor Felipe Medalla said: "The enactment of the new Agri-Agra and Rural Financing Law is a timely and positive development since it will assist the sector's recovery from the impact of the Covid-19 pandemic and other natural calamities through private sector financing."

Medalla added, "The new Agri-Agra and Rural Financing Law has been a priority legislative measure of the BSP since it considers the requirements of rural community beneficiaries from a holistic perspective, taking into account their evolving social networks and complex needs."

RA 11901 aims to improve rural communities and households' access to vital financial services and programs, including their micro, small and medium enterprises (MSMEs).

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Agritourism, digitalization of agricultural activities and processes, rural public infrastructure, initiatives to improve livelihood skills, and programs to promote the health and wellness of rural communities are all included in the new law's expanded definition of activities for agricultural credit and rural development financing.

Additionally, it encourages financial assistance for green initiatives that contribute to equitable and sustainable economic growth and environmental, social and governance projects.

Under the new law, banks are no longer obligated to set aside 15 percent of their loan portfolio for agricultural operations and 10 percent for recipients of the agrarian reform.

This new law also gives banks more freedom to choose which borrowers in the agriculture, fishery and agrarian reform sectors would receive their share of the combined 25-percent required credit quota.

Additionally, banks that are unable to provide loans directly to beneficiaries in rural communities can still make a difference by investing in debt and equity securities, financing the agricultural value chain, and providing agri-business loans to finance agricultural and community-enhancing activities.

The law provides a system for financing organizational, capacity and institution-building projects to boost productivity and competitiveness in rural areas and the agricultural and fishing industries.