A P2 billion allocation to be used in credit facilities under the Agro-Industry Modernization Credit and Financing Program (AMCFP) has been approved by Congress for 2015.
The appropriation is provided under Section 3 of the 2015 General Appropriations Act (GAA), which states:
“The amount of P2 billion shall be transferred to government financial institutions (GFIs) or cooperative banks to be used exclusively for the establishment of a flexible credit facility for the benefit of small farmers and fisherfolk registered under the Registry System for Basic Sectors in Agriculture (RSBSA), as an alternative to the rigid and stringent credit facilities usually provided by banks. For this purpose, the Agricultural Credit Policy Council (ACPC) in coordination with said GFIs and banks, shall formulate the guidelines for a streamlined and equitable access by the foregoing small farmers and fisherfolk to said credit facility.”
The P2 billion allocation will be used in various credit facilities under the AMCFP to help contribute to the attainment of inclusive growth through financial inclusion of the unbanked and under banked sectors in agriculture and increase the proportion of small farmers and fisherfolk obtaining loans from formal sources from 52% in 2007 to 61% in 2016. The P2B credit fund, which was requested by the ACPC as part of its 2015 proposed budget, forms part of the P2.606 Trillion total National Budget for 2015 ratified by both the Senate and the House of Representatives on December 15, 2014. President Benigno S. Aquino III signed the 2015 GAA last December 23, 2014.
This is the second time the government provided funding for agricredit for small farmers and fisherfolk under the administration of President Benigno S. Aquino III. In 2013, the government also allocated P1 billion for the attainment of inclusive growth through the AMCFP-Agricultural Fisheries Financing Program (AFFP). The AMCFP-AFFP’s goal is financial inclusion of the unbanked and underbanked sectors in agriculture.
Under the AMCFP-AFFP, small farmers and fisherfolk (SFF) registered in the RSBSA are eligible to avail themselves of agri-finance and agrimicrofinance loans through AFFP partner-GFIs like the Land Bank of the Philippines (LBP) and the People’s Credit and Finance Corporation (PCFC). The program, as of December 31, 2014, has already provided loans to 3,378 SFF in priority provinces with completed RSBSA.
The RSBSA is an electronic database of basic information on farmers, farm laborers and fishermen per province. The project is an interagency undertaking of the Department of Budget and Management (DBM), Department of Agriculture (DA), Department of Interior and Local Government (DILG), Department of Agrarian Reform (DAR), and the National Statistics Office (NSO). The RSBSA can be accessed through the National Anti-Poverty Commission (NAPC), which has been designated as repository of the said registry system.
The P2B fund for agri-fishery credit in 2015 will be used for the implementation of the following credit facilities: 1) DA-Landbank Sikat Saka Program; 2) ACPC-PCFC AFFP Agri-Microfinance Program (AMP); 3) Cooperative Banks Agri-Lending Program (CBAP); 4) Value Chain Financing Program (VCFP); 5) Calamity Assistance Program (CAP); and Climate Change Adaptation Financing Program (CAFP).