Well, farmers don’t realize it as credit – they just know it’s Fast Cash, no questions asked, no collateral, no waiting in line. We call it “Five-Six” – it’s really a “Borrow Now Pay Later Plan” – borrow 5 pay 6, 20% interest within 100 days, even within 24 hours. Fast cash for the borrower, fat cash for the lender. Aren’t both happy?!
Isn’t that a failure of credit consciousness in the Philippines? Isn’t that a failure of an agency to promote credit worthiness in both borrowers and lenders?
No, not so fast! Because, right now, there is no single public agency tasked to promote the use and demote the abuse of farm credit in the Philippines. The nearest body I can think of is the ACPC, but my googling tells me I’m wrong.
A little bit but necessary history: The ACPC was created in 1986 by Executive Order (EO) 113 signed by President Corazon C Aquino on 24 December 1986. Via EO 113, according to its website[2], the ACPC was mandated:
To assist the Department of Agriculture (DA) in synchronizing all credit policies and programs in support of the latter’s priority programs. It was also tasked to review and evaluate the economic soundness of all on-going and proposed agricultural credit programs, whether for domestic or foreign funding, prior to approval. Also, ACPC was tasked to undertake measures to increase its funds base and adopt other liquidity interest stabilization and risk cover mechanisms for its various financing programs.
The ACPC is mandated to: “Synchronize all credit policies and programs.” “Review and evaluate the economic soundness of credit programs.” “Increase its funds base and adopt risk cover mechanisms for its financing programs.”
Nothing said about the ACPC officially acting on non-formal credit that farmers almost always turn to, to their dis/advantage.
The ACPC became an attached agency of the DA via EO 116 in 1987: “To support priority DA programs; to review & evaluate credit programs for funding; to increase funding for various programs.” No, nothing said about helping farmers with their dis/credit relationships with moneylenders. I wonder why.
I believe the lack of a specific law is to be blamed for the continued and widespread presence of usury in the farming villages. Convenience remains the enemy of poor farmers.
In the meantime, we can only urge the ACPC to do institutionally more to promote its role in carrying out its functions expanded by Republic Act (RA) 7607, the Magna Carta of Small Farmers, to: “(1) conduct institutional capacity building programs and (3) to develop special projects to promote innovative financing schemes for small farmers.” RA 7607 did not address credit ignorance and abuse.
I believe we need a PH law passed addressing the widespread Five-Six loan arrangements, with the ACPC taking charge.@517
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