The Bangko Sentral ng Pilipinas (BSP) approves the renewal of the accreditation of Producers Bank as an Accredited Rural Financial Institution (ARFI). Mr. Noel L. Guinto, Officer-in-Charge of the Department of Supervisory Analytics of the BSP stated that Producers Bank has satisfactorily complied with the requirements of accreditation renewal. Hence, Producers Bank as an ARFI, can accept deposits and investments from banks that are required to allocate funds to lend out to the agriculture and agrarian (agri-agra) sectors.
According to a BSP press release, ARFIs serve as direct conduits to farm sector and agrarian reform beneficiaries by channeling money specially authorized by other banks for the program. ARFIs play an important function in the financing chain.
Banks can meet their credit quota by lending to rural community beneficiaries to fund agricultural and fishery-related activities, as well as investing in securities with revenues earmarked for similar purposes. Other ways to comply include opening accounts with rural financial institutions (RFIs) or investing in their fixed-term deposit products, investing directly in RFIs, lending for agriculture infrastructure construction and upgrade, extending credit to agri-businesses with commodity supply-chain arrangements with rural community beneficiaries, and engaging in sustainable finance.
Under the Mandatory Agri-Agra Credit Act of 2009 (Republic Act No. 10000), banks must put aside at least twenty five percent (25%) of its total loanable funds for agri-agra credit in general, with at least ten percent (10%) of those funds going to agrarian reform recipients. RA 10000 aims to boost rural development by taking a comprehensive approach to meeting the demands of the agricultural finance ecosystem as a whole.
The Agri-Agra law strengthens rural communities’ access to private sector financing by extending bank compliance modes and establishing a special fund managed by an Agricultural and Fisheries Finance and Capacity-Building Council to finance organizational and institution-building programs and activities for rural agricultural and fisheries households.
To date, Producers Bank has a total number of one hundred fifty five (155) depositor banks with Special Time Deposit Account for Banks which can serve as their compliance with RA 10000.