Role of Financing Institutions.
Section 19
SEC. 19. Role of Financing Institutions. — After approval by the Council of the annual program for the industry, the Development Bank of the Philippines and the Philippine National Bank shall extend production loans to all rice and corn producers: Provided, That not more than eighty (80%) per cent of the price support shall be extended as crop loans to the producers: Provided — 1) That it shall be mandatory to all rural banks and government-owned or controlled lending institutions to extend production loans to small land-owners cultivating an area of not more than twenty-four (24) hectares; and 2) That it shall be mandatory for all government-owned or controlled financing institutions to extend production loans to leaseholders who belong to duly registered producers' cooperatives. For this purpose, within the next five years, all production loans extended to rice and corn producers by banks shall be given preference in the rediscounting policy of the Central Bank of the Philippines, and that the rediscounting rate shall be the lowest preferential rate extended by the Central Bank for the period. Financial institutions named herein shall extend loans to warehousemen and millers for the construction, improvement and repair of warehouses or for the purchase of driers. Private lending institutions who shall participate in this program, shall be entitled to the rediscounting privileges and coverage under the Agricultural Guarantee Fund. All loans under this program shall be extended under supervised credit as prescribed under Republic Act Numbered Sixty-three hundred and ninety; Provided, That no farmer shall be extended loans under this program unless he warrants in the application for loan in the loan agreement that he shall deposit his produce with a duly accredited warehouse or where no such warehouse is available in the meantime, in the nearest storage facility designated by lending bank or the Administration. In this connection, the Administration is empowered to call upon all agencies of the Government with agricultural extension technicians to assist lending banks in the implementation of the supervised credit program without prejudice to the employment by the lending institutions of their own technicians.