In a significant step towards enhancing agricultural financing in the Philippines, the Bangko Sentral ng Pilipinas (BSP) Research Academy and the Department of Agriculture’s (DA) Agricultural Credit Policy Council (ACPC) unveiled the key findings of the 2022 Countryside Bank Survey (CBS) report.
Photo shows (front row, 7th to 9th from left) Agricultural Credit Policy Council Director Magdalena Casuga, Bangko Sentral ng Pilipinas Cabanatuan City Branch Officer-in-Charge Lydia Panahon, Principal Researcher Dr. Veronica Bayangos, and (4th to 5th from right) Researchers Jade Eric Redoblado and Ferdinand Co during the 2022 Countryside Bank Survey regional public information campaign in Cabanatuan City.
The presentation, held earlier this month, marked the second leg of the CBS regional public information campaign that began in Naga City last June 4, 2024.
The event, which was conducted both online and onsite, brought together a diverse group of stakeholders, including representatives from banks, bankers’ associations, traders, academia, the Department of Agriculture, the Office of the Provincial Governor, the Philippine Information Agency, and the Philippine Center for Postharvest Development and Mechanization.
This broad representation underscored the collaborative approach necessary to address the challenges and opportunities in agricultural financing.
BSP survey sees high interest rates on agri loans as a major barrier
BSP Principal Researcher Veronica Bayangos, ACPC Director Magdalena Casuga, and BSP Researchers Ferdinand Co and Jade Eric Redoblado led the engagement, focusing on several critical issues affecting agricultural lending. One of the primary concerns discussed was the high interest rates on agricultural loans, which pose a significant barrier for farmers and agribusinesses seeking financing.
The discussion also explored potential incentives for banks to increase their lending to the agricultural sector, aiming to create a more favorable environment for both the lenders and the borrowers.
Another key topic was the importance of monitoring the implementation of CBS policy recommendations. By ensuring that policies are effectively put into practice, the BSP and ACPC aim to foster a more robust and responsive agricultural financing system. Additionally, the need to harmonize data and studies on agricultural lending was highlighted, emphasizing the role of accurate and comprehensive data in formulating sound financial policies and strategies.
In 2023, the BSP launched a program targeting the financial literacy of 1.8 million OFWs and their families through a redesigned “Pinansyal na Talino at Kaalaman” (PiTaKa) program, which aims to teach them how to save, manage their savings, get out of debt, and make prudent investments to achieve financial stability.
Analyzing lending trends and policy implications
The 2022 CBS Report, a collaborative effort between the BSP and ACPC, provides a thorough analysis of lending trends and policy implications in agricultural financing.
Using branch-level data, the report evaluates various aspects of banking units’ agricultural lending activities in 2022, comparing them to the previous year. Key areas of focus include loan demand, borrower profiles, interest rates, repayment dynamics, profitability, risk management, challenges, and future plans.
The report’s findings offer valuable insights into the current state of agricultural lending, shedding light on the factors that influence lending behaviors and outcomes.
By understanding these dynamics, policymakers and financial institutions can better tailor their approaches to meet the needs of the agricultural sector.
Following the successful engagements in Naga City and Cabanatuan City, the CBS public information campaign will continue with activities scheduled in Davao City and Silliman University in Dumaguete City later this year.
These events aim to further disseminate the findings of the 2022 CBS report and engage a wider audience in discussions about improving agricultural financing in the Philippines.
For those interested in a deeper dive into the report, the complete 2022 CBS report can be downloaded by scanning the QR code provided below. This comprehensive document offers detailed data and analyses, serving as a valuable resource for stakeholders across the agricultural and financial sectors.
In the end, the presentation of the 2022 Countryside Bank Survey report in Cabanatuan City marks a crucial step in the ongoing efforts to enhance agricultural financing in the Philippines.
By addressing key issues such as high interest rates and the need for incentives and by fostering collaboration among diverse stakeholders, the BSP and ACPC are paving the way for a more inclusive and supportive financial environment for the country’s agricultural sector.