Legarda Supports IMF Chief’s Call for Inclusive Growth to Reduce Poverty

MANILA, November 17, 2012-Senator Loren Legarda today agreed with the statement of International Monetary Fund (IMF) Managing Director Christine Lagarde that the Philippines should ensure inclusive growth, especially through support for rural enterprises, to reduce poverty.

Legarda, author of several laws that support rural livelihoods, noted Lagarde’s observation that despite the positive economic growth in the country, 42% of the Philippine population is still poor, living on a budget of less than two dollars a day, primarily because growth is felt mostly only by the rich and the middle class.

“Our country is experiencing positive economic growth as attested to by no less than Ms. Christine Lagarde, the Managing Director of the IMF. What we should also focus on is spreading the wealth. Ms. Lagarde said that inclusive growth can be attained if rural enterprises are supported. We have to ensure that the benefits of our economic gains will trickle down even to the far-flung barangays in the country. We have to make our laws work to be successful on that,” she said.

In line with this, the Senator called for the full implementation of the Micro, Small and Medium Enterprises Act (RA 9501), the Barangay Kabuhayan Act (RA 9509), and the Agri-Agra Reform Credit Act (RA 10000), which she all authored.

“We must invest heavily in the countryside, stimulating growth of MSMEs that will provide more employment opportunities. Training programs should be established in barangays to encourage people to engage in self-employment alternatives. Furthermore, we should extend adequate technical and financial support to our farmers and fisherfolk. Government agencies, such as the Department of Trade and Industry, Department of Labor and Employment, and the Department of Agriculture, must coordinate well in implementing our laws on rural enterprises,” Legarda stressed.

The MSME Law strengthens and provides more assistance to MSMEs by requiring lending institutions to allocate at least eight percent of their total loan portfolio to micro and small businesses. It also provides access to new technologies and regular entrepreneurship training programs for workers as well as a comprehensive development plan that would ensure the viability and growth of MSMEs in the country.

The Barangay Kabuhayan Act establishes livelihood and skills training centers in the fourth, fifth and sixth class municipalities in the country.

The Agri-Agra Law requires banks to allocate 25% of their loanable funds to the agriculture sector to finance the acquisition of work animals, farm equipment or machinery, seeds, fertilizers, livestock, feeds and/or other similar items for farm production.  Of the 25%, 10% should be given to agrarian reform beneficiaries and 15% to the agriculture sector.