Law Summary
Conditions for Extending Credit
- Credit is extended based on project feasibility, beneficiaries' paying capacity, estimated production, and securities provided.
- Assets acquired from loan proceeds may also serve as security.
Mandatory Agricultural and Agrarian Reform Credit Quotas
- Both government and private banks must allocate at least 25% of their loanable funds to agricultural credit.
- At least 10% of loanable funds must be made available specifically for agrarian reform credit to the beneficiaries enumerated.
- Loanable funds refer to funds generated from the decree's effective date.
- The National Economic and Development Authority (NEDA), upon recommendations from the Department of Agrarian Reform (DAR) and the Central Bank of the Philippines, may adjust these percentages considering credit needs.
Regulatory Authority and Implementation Mechanisms
- The Central Bank of the Philippines, in consultation with or on DAR's recommendation, will issue rules and regulations to implement the decree.
- Banks may invest unloaned portions of the agrarian reform credit quota in government securities eligible by the Central Bank, with the issuing entity obligated to repurchase when banks need funds for lending.
- Banks are authorized to rediscount eligible agrarian reform credit papers with the Central Bank.
Repeal and Effectivity
- All laws, decrees, rules, and regulations inconsistent with this decree are repealed or modified accordingly.
- The decree took effect immediately upon signing.