Thrift banks back DA bond float

MANILA, Philippines — Thrift banks operating in the Philippines support the government’s plan to issue bonds to raise funds for the completion of farm-to-market roads as well as for farm and fisheries mechanization program, describing the move as a win-win proposition.

Gregorio Anonas III, president of the Chamber of Thrift Banks (CTB), said the proposed bond flotation by the Department of Agriculture (DA) would help banks comply with Republic Act 10000 or the Agri-Agra Reform Credit Act of 2009.

The law retained the mandatory credit allocation in Presidential Decree 717 mandating that 25 percent of banks’ total loanable funds are to be set aside for agriculture and fisheries in general, of which at least 10 percent should be made available for agrarian reform beneficiaries.

“We view this program as a win-win proposition for both the banking and agri sectors,” he said.

The initiative is among the proposals elevated by the CTB to the House Committee on Banks chaired by Rep. Ben Evardone.

“CTB is committed to help farmers obtain a more dignified way of life through the extension of loans to increase farm productivity. CTB is, likewise, committed to its fiduciary responsibility to its depositors whose funds the banks are bound to protect,” Anonas added.

Agriculture Secretary Emmanuel Piñol has proposed to Finance Secretary Carlos Dominguez III and Bangko Sentral ng Pilipinas Governor Nestor Espenilla the bond flotation to fund the backlog of 13,000 kilometers of farm to market roads as well as its farm modernization program.

Piñol said around P140 billion is needed over the next four years to finance road network construction that is expected to lower the cost of basic commodities.

Another P60 billion in bonds would be floated for DA’s mechanization program involving the acquisition of farm machinery and equipment and post-harvest facilities.

Piñol said DA’s technical team is now preparing the documents to be presented to the National Treasury. The bond float targeted to be implemented within the year.

To recall, the DA failed to get its proposed budget this year of over P120 billion and just settled for half of it, or P60.6 billion.

The department originally allotted roughly P20 billion for its FMRs and mechanization, but only less than P5 billion was approved, thus its move to look for other options to finance its projects.