THE PASSAGE of a measure that will amend the Warehouse Receipt Law will help farmers grow their businesses by allowing them to more easily obtain bank financing, a former Finance Secretary said.
The bill will allow farmers to deposit their goods in an accredited warehouse, which will issue them a warehouse receipt, certifying storage of goods including quantity and quality. The receipt can be used as a collateral for a bank loan to finance the next cropping season, former Finance Secretary Margarito B. Teves said in a Senate hearing.
“This allows farmers to sell produce at the best times, attain a better income, and help decrease post-harvest losses,” he said at a hearing of the chamber’s Trade committee.
“It will address the banks’ lack of confidence to lend to (small and medium enterprises) and farmers. The bill brings integrity to the use of warehouse receipts as collateral by providing for accreditation of warehouses engaged in the issuance of warehouse receipts.
Mr. Teves said a centralized IT system or repository of all warehouse receipts will also support the agriculture sector by capturing data on crops and provide information to policymakers in designing programs to ensure food security.
The centralized online system of receipts “complements the risk management tools of banks in doing their due diligence.”
“It will support the growth of e-commerce and warehousing by enabling supply chain finance, minimize logistics and fulfillment challenges brought by the growth of e-commerce and bring more integrity and security to transactions,” he said.
The bill will also help achieve the President’s agenda of promoting rural development by increasing agricultural and rural enterprise activity, he said.
“We hope the distinguished members of the Senate act urgently on the measure to help attain more inclusive economic growth,” he said.
Senators Francis N. Pangilinan and Sherwin T. Gatchalian both filed bills to modernize the Warehouse Receipts Law of 1912, or Act No. 2137.
Senate Bill No. 632 filed by Mr. Pangilinan seeks to establish an online warehouse receipts registry.
“Through such registry, the public, especially banks and other financial institutions, may easily verify the quantity and quality of goods covered by each warehouse receipt. As warehouse receipts become more reliable, farmers may now use their harvests, evidenced by warehouse receipts, as collateral for securing loans,” according to the bill’s explanatory note.
Mr. Gatchalian’s Senate Bill No. 2049 also seeks to establish a registry for all warehouse receipts, to raise the confidence of financial institutions in accepting collateral from farmers and micro, small and medium enterprises. — Vann Marlo M. Villegas