Lawyer William Enrile, chief executive officer of Peñafrancia Sugar Mill Inc. (PENSUMIL), told Today that no commercial banks are providing loans to sugar-cane planters, and that his company carries the burden of extending financing to them. PENSUMIL
, the only sugar milling facility in the Bicol region
, is in Pili, Camarines Sur.
One reason why banks do not extend credit to farmers is the borrowers' failure to pay back their loans.
"Our best remedy before was for our firm to borrow money from banks and relend it to planters who would pay back the loans on the following milling season," said Enrile
."But many planters have failed to pay back their loans."
said that the best remedy is for the government to require banks, whom it has equity with, to provide credit facility to sugar planters, in lieu of refusal by private banks to extend the needed credit. PENSUMIL
has been extending credit to planters for their funding needs-from site preparation to weeding and cutting operations and fertilizers.The Land Bank of the Philippines
, Republic Planters Bank
, Development Bank of the Philippines
, and the Philippine Sugar Corp.
used to give planters loans several years back. Bicol Sugar Planters Association
(BISUPLA), a sugar planters group, said PENSUMIL
charges them for loans at 2.5 percent interest a month, but no figures were available on how much interest the banks charge the milling firm, most probably lower, and how much "mark-up" the company imposes on the loan interests. Enrile
gave hints that PENSUMIL
has P225 million debt, but he
did not elaborate if the debt is related only to bad loans acquired by planters, or if the debt also includes other loans it acquired for milling operation. He
firm has some P100 million in uncollected amounts.
"The sugar content of the cane deteriorates 48 hours after cutting," said Enrile
denied the insinuations by disgruntled planters.
"Our laboratory staff is honest in determining ps/tc," said Boy Lazaro, an associate of Enrile
mentioned limited options for Bicol's
local sugar industry.Besides the financing and road needs, he
said the sugar mill could be sold to interested buyers who are also stakeholders in other sugar-producing regions, like Negros.