By Madelaine B. Miraflor
Department of Agriculture (DA) Secretary Emmanuel Piñol has already identified four key investment areas as he expressed optimism that the Duterte administration will finally give the go signal on his proposed P200-billion bond issuance.
The four key investment areas are FMR (farm-to-market road), solar irrigation, logistics, and easy access credit.
Piñol is banking on the administration’s plan to focus on agriculture sector this year. He cited a statement from the economic team that government will now focus on agriculture.
“The announcement by the economic managers that government will now focus on agriculture which they said dragged down economic growth is a breath of fresh air for the sector which has long been asking for bigger budget allocation,” Piñol earlier said.
The country’s economic team is led by the Department of Finance, Department of Budget and Management, and National Economic and Development Authority.
“We’re still waiting for the go signal of the Department of Finance,” Piñol said.
Under the law, any government agency is allowed “to borrow from time to time” upon the approval of the President and after consultation with the Monetary Board.
This is in order for the government or its agency to meet public expenditures authorized by law or to provide for the purchase, redemption or refunding of any obligations, either direct or guaranteed.
“When I refer this to Finance Secretary [Carlos] Dominguez, he advised me to write the National Treasurer. I would assume they are already talking about this. We can tap banks’ money that is supposedly allotted to agriculture,” Piñol said.
Piñol first floated the idea in March last year of raising funds in March last year through a government-led bond offer. The bond sale, according to him, will be done in tranches over the next three years.
The proposal was welcomed by Dominguez and Central Bank Governor Nestor Espenilla, who both said the bond sale could be a way to push the country’s private and commercial banks comply with the Agri-Agra Law.
Under the Agri-Agra law, banks are required to set aside 25 percent of their loan funds to 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.
For this year, DA will have a budget of P120 billion, which is higher than the P55 billion it had in 2018.
The construction of more FMRs; Solar-Powered Irrigation System (SPIS); distribution of more ‘easy access’ credit facilities; purchase or development “Food Boat”; establishment of post-harvest facilities are just some of the things being pushed for right now by the DA.
Without enough funding for these projects, Piñol said the farm sector may not grow as fast as the administration would want it to be.