Modes of Compliance.
Section 7
SEC. 7. Modes of Compliance. — The BSP, the DA and the DAR, in consultation with concerned agencies and sectors, shall promulgate such rules and regulations as may be necessary to implement the provisions of this Act within ninety (90) days after the approval of this Act. Such rules and regulations shall take effect fifteen (15) days after its publication in a newspaper of general circulation in the Philippines. Subject to such rules and regulations, banking institutions may be allowed to: Invest in bonds issued by the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP) and/or open special deposit accounts (SDAs) with accredited rural financial institutions defined by the implementing rules and regulations: Provided, That the proceeds from said bonds and SDAs shall be used exclusively for on-lending to the agriculture and agrarian reform sector: Provided, further, That proceeds from said bonds and SDAs shall be separately accounted for by the DBP, the LBP and the depository thrift banks, cooperative banks and rural banks and shall not be considered for purposes of computing the loanable funds under Section 6 hereof of the said banks: Provided, furthermore, That loanable funds channeled as compliance under this subsection shall not be counted as compliance under subsections (b), (c), (d), (e) and (f) even if said funds are later used by conduit banks in activities similar to those provided for in subsections (b), (c), (d), (e) and (f); Rediscount with the universal banks and commercial banks, including local branches of foreign banks eligible paper covering agriculture, fisheries and agrarian reform credits, including loans covered by guarantees of the QUEDANCOR, and the PCIC: Provided, That re discounted paper shall no longer be eligible as compliance on the part of the originating bank; Lend for the construction and upgrading of infrastructure including, but not limited to, farm-to-market roads, as well as the provision of post harvest facilities and other public infrastructure that will benefit the agriculture, fisheries and agrarian reform sector; Invest directly in preferred shares of stock in rural financial institutions like rural banks, cooperative banks, farmer's cooperatives and farmer's cooperative insurance or mutual benefit associations or lend wholesale to rural financial institutions accredited by the RSP: Provided, That credit facility shall be exclusively used for on-lending to the agriculture, fisheries and agrarian reform sector: Provided, further, That the wholesale loans shall be credited as compliance of the wholesale lender alone: Provided, finally, That allowable alternative modes of compliance should directly target the agriculture, fisheries and agrarian reform sector; Invest in shares of stock of the QUEDANCOR and the PCIC; and Loans or investments in the activities identified under the AMCFP as enumerated under Chapter 3 Credit, Section 23 of Republic Act No. 8435 or the Agriculture and Fisheries Modernization Act (AFMA).