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June 1, 2022

WHAT IS AGRI-AGRA REFORM CREDIT ACT OF 2009?

After reading What is Agri-Agra Reform Credit Act of 2009?, read also Infusion of Foreign Equity in the Capital of Rural Banks

  • The State promotes rural development by enhancing access of the rural agricultural sector to financial services and programs

  • Agricultural and agrarian reform credit consist of loan activities and purposes

  • Banking institutions shall set aside at least twenty-five percent (25%) of their total loanable funds for agriculture and fisheries credit in general

Through Republic Act No. 10000 or ‘The Agri-Agra Reform Credit Act of 2009’ (RA No. 10000), the State promotes rural development by enhancing access of the rural agricultural sector to financial services and programs that increase market efficiency and promote modernization in the rural agricultural sector. RA No. 10000 provides for an agriculture and agrarian reform credit. 

RA No. 10000 states that there shall be evolved an agriculture, fisheries and agrarian reform credit, insurance and financing system to improve the productivity of the agriculture and fisheries sectors, particularly the farmers, fisherfolk and agrarian reform beneficiaries, settlers, agricultural lessees, amortizing owners, farmworkers, fishworkers, owner-cultivators, compact farmers, farmer’s and fisherfolk’s cooperatives, organizations and associations, through government and private banking institutions.

What is agriculture and agrarian reform credit?

The law says:

Agriculture and agrarian reform credit consist of loan activities and purposes including, but not limited to, agricultural production, promotion of agribusiness and exports, acquisition of work animals, farm and fishery equipment and machinery, seeds, fertilizers, poultry, livestock, feeds and other similar items.

Said credit shall be extended to the beneficiaries mentioned above or to cooperatives or associations in good standing of such beneficiaries regardless of capitalization based on the feasibility of the project and their paying capacity, their estimated production, and/or securities they can provide from the proceeds of the loan. 

Furthermore, RA No. 10000 provides that all banking institutions, whether government or private, shall set aside at least twenty-five percent (25%) of their total loanable funds for agriculture and fisheries credit in general, of which at least ten percent (10%) of the loanable funds shall be made available for agrarian reform beneficiaries.

What if the banking or lending institutions did not comply with the above or any other provisions of RA No. 10000?

The law says:

The Bangko Sentral ng Pilipinas shall impose administrative sanctions and other penalties on the lending institutions for noncompliance with the provisions of RA No. 10000. Penalties on noncompliance shall be computed at one-half of one percent (0.5%) of noncompliance and undercompliance shall be directed to the development of the agri-agra sector. Ninety percent (90%) of the penalties collected shall be allocated between Agricultural Guarantee Fund Pool (AGFP) and Philippine Crop Insurance Corporation (PCIC) according to the needs of the agri-agra sector as provided for in implementing rules and regulations of RA No. 10000 and the remaining ten (10%) shall be given to the Bangko Sentral ng Pilipinas to cover administrative expenses.


Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding illegal dismissal, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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