BSP Amends Rules On Mandatory Development Financing

On June 9, 2023, the Monetary Board of the Bangko Sentral ng Pilipinas ("BSP") issued Circular No. 1174, amending the implementing regulations of the mandatory agricultural, fisheries and rural development financing contemplated by the Agriculture, Fisheries and Rural Development Financing Enhancement Act (Republic Act No. 11901 or the "Agri-Agra Reform Credit Act"). The implementing regulations were previously set out in BSP Circular No. 1159 dated November 4, 2022.

The Agri-Agra Reform Credit Act requires banks to set aside a minimum credit quota to finance the requirements of the Philippines' agricultural and fishing sectors. The statute repealed Republic Act No. 10000, which imposed a similar credit quota requirement. A general discussion of some of the more salient requirements under the Agri-Agra Reform Credit Act are discussed below.