QUEZON CITY – Don’t look now but several lawmakers are out to further strengthen the rural banks in the country to serve the countryside, especially farmers and those engaged in agriculture ventures.

This shaped up following an online meeting on May 14 by the House of Representatives Committee on Banks and Financial Intermediaries.

During the meeting, the committee approved the Committee Report and the amended Substitute Bill to four bills seeking to strengthen rural banks in the country by amending further for the purpose Republic Act 7353 or the Rural Banks Act of 1992, as amended.

These are House Bill 4256 by AAMBIS-OWA Party-list Rep. Sharon Garin, HB 4622 by Deputy Speaker and South Cotabato Rep. Ferdinand Hernandez, HB 5143 by Bukidnon Rep. Ma. Lourdes Acosta-Alba and HB 8359 by Camarines Sur Rep. Luis Raymund ‘LRay’ Villafuerte Jr.

In a statement, the technical working group headed by Committee Chairman and Quirino Rep. Junie Cua earlier tasked the Bangko Sentral ng Pilipinas (BSP) to take the lead in drafting the substitute bill.

Cua said the substitute bill was exhaustively discussed and studied by all sectors concerned. “We consulted the Association of Rural Banks, rural bankers, stakeholders, and most especially the BSP. Nahimay-himay na natin. Napag-aralan (na ito) ng mga stakeholders,” Cua said.

The Quirino lawmaker assured that rural banks would continue to cater to poor people under the bill.

In the explanatory note of HB 4256, Garin said the presence of sustainable rural banks capable of providing much-needed capital to boost agricultural activities can economically empower farmers, fisherfolk, and small entrepreneurs, as well as stir economic activities in the rural areas. The proposed “Rural Banking Act of 2021” would provide tax exemptions to all rural banks created and organized under the new provisions of the proposed Act as well as to surviving or consolidated rural banks, which are party to a merger or consolidation.

The rural banks would be exempt from the payment of all taxes, fees and charges of whatever nature and description, except the corporate income tax and local taxes, fees as well as charges, for a period of five years from the date of the start of operations. These tax exemptions were approved by the Committee on Ways and Means last May 3, 2021.

Among the functions of rural banks would be to 1) act as correspondent for other financial institutions; 2) act as collection agent; 3) act as official depository of municipal, city, provincial or GOCC funds in said local government units where the bank is located in areas where there are no government banks; 4) act as conduit bank for the disbursement of government funds intended for lending to agriculture, micro, small and medium enterprises (MSMEs) and projects for local economic development; 5) participate in government program allocations for agricultural lending , social housing, as well as for loans to rural micro enterprises and other initiatives towards inclusive growth; and 6) extend credit facilities to private and government exployees.

After Rep. Jose Gay Padiernos (Party-list, GP), Rep. Virgilio Lacson (Party-list, MANILA TEACHERS) and Manila Rep. Edward Vera Perez Maceda made their manifestations, Lacson moved for its approval. (Agriculture News Network)