Local banks have paid billions of pesos in penalties for non-compliance with the Agri-Agra Reform Credit Act of 2009.
Maria Cynthia Sison, Bangko Sentral ng Pilipinas Supervisory Policy and Research Department deputy director, said, “On average, banks pay around two billion pesos in penalties every year.”
BSP Governor Benjamin Diokno said banks have extended a total of 714 billion pesos in agri-agra credit as of end-December 2020.
He noted, “Even with such an amount, banks were still unable to comply with the mandatory agri-agra credit.”
Of the total loans extended by banks, 642 billion pesos is accounted for by agricultural credit. This amount, however, is about 9 percent of the compliance ratio and is below the 15-percent requirement.
Agrarian reform credit extended by banks to date amounts to 71 billion pesos, a mere one percent compliance ratio vis-à-vis the 10-percent requirement under the Agri-Agra law.