DA to sell 1200-B bonds in tranches
to the National Treasurer," Piñol said, though he is yet to reply when asked when the DA is planning to submit the proposal.
As of now, a technical team from the DA is already preparing the documents to be presented to the National Treasury for the bond floatation.
Piñol said the proposal has been welcomed by Finance Secretary Carlos G. Dominguez and Central Bank Governor Nestor Espenilla, who both said that the measure would utilize the vast resources of private and commercial banks who are required by law to lend 25 percent of their loan funds to the agriculture and fisheries sector.
To be exact, about R140 billion is needed over the next four years to finance the massive FMR network construction, which would not only promote greater productivity and lower the cost of food commodities in the market but also create employment in the countryside where the poverty incidence is considerably high.
Then another R60 billion is needed finance the mechanization program which will involve the acquisition of farm machinery and equipment, including post harvest facilities in agriculture and fisheries.
The country currently loses 16 percent of its grains harvest because of the lack of post-harvest facilities, while 40 percent of the fishermen's catch is spoiled because of the absence of ice-making plants and cold storage.
Once raised, proceeds from the bond offering will be used in a mechanization loaning program to farmers and fishermen's associations to be managed by the Agricultural Credit Policy Council (ACPC) of the DA.
This program has already been started with a R400-million initial loan fund for farm mechanization and fisheries modernization which offers loans to farmers and fishermen's groups at 6 percent interest per year without collaterals and a repayment period of 5 to 8 years.
Under the Agri-Agra Law, private and commercial banks are required to earmark 25 percent of their loan funds for projects in the agriculture and fisheries sector.
Over the years, however, banks have opted to pay the hefty fines for their failure to comply with the law rather than lend to the agriculture and fisheries sector which they consider as "high-risk" borrowers.