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A Brief on the Issue of Agricultural Lands as Loan Collateral


This paper presents a summary of ACPC's findings on the subject of making farmlands acceptable as loan collateral - one of the petitions made by President Gloria Macapagal-Arroyo to Congress during her first State-of-the-Nation Address (SONA). Based on ACPC's assessment, farmlands can only become acceptable to banks as collateral once distortions in the agricultural land market are removed. This can primarily be done by (a) amending the relevant laws to remove constraints to the marketability of government-issued land instruments, i.e., make the ownership of CLOAs, EPs, and CSCs transferable and at a much earlier date rather than after ten years, and (b) fast-tracking the completion of the CARP's implementation so that government's inappropriate involvement in setting land values and the uncertainties in land ownership can finally end.

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Jul 05, 2013