Amnesty on unpaid loan interest of farmers, fisherfolk okayed

May 21, 2020

The House of Representatives has overwhelmingly approved on third reading a measure seeking to condone the unpaid loan interests secured by farmers, fisherfolk and agrarian reform beneficiaries through government lending programs.

Voting 209-0, the lower chamber passed on final reading House Bill 5083 or the proposed Agrarian and Agricultural Loan Restructuring and Condonation Act which aims to facilitate the reintegration of the financial and bank standing of farmers, fisherfolk and agrarian reform beneficiaries, and give them access to new and additional government credit programs.

The bill seeks to mandate the condonation of unpaid interests, penalties and surcharges on loans secured by these beneficiaries from the Department of Agrarian Reform, Department of Agriculture, People’s Credit and Finance Corp., Cooperative Development Authority, National Food Authority, and the Quedan and Rural Credit Guarantee Corp..

COOP-NATTCO Party-list Rep. Sabiniano Canama, author of the bill, noted that farmers and agrarian reform beneficiaries should be viewed as "partners" in the "evolution of a better and brighter country".

"It is therefore imperative upon us to take an overwhelming care and attention by condoning these interests that burdened the debt," Canama said.

The bill seeks to provide that the justification of the condonation would only be due to force majeure or market aberration and not be applied for the willful default of the borrowers to pay the loans.

It covers applicants who have paid at least 5 percent of the principal amount at the time of application for condonation.

The borrower would be granted a one-time condonation only.

The restructured loans would be restored to status of good standing upon three consecutive payments by the borrower.