Farm loans up 7.6% to P778B

BANK loans made available to the agriculture sector grew by 7.6 percent to P778.2 billion in 2014, according to the Philippine Statistics Authority.

The PSA said in a report that agricultural lending improved from P723.6 billion in 2013 based on current prices.

But based on 2000 prices, bank lending for agricultural production in 2014 dropped by 1 percent to about P124 billion.

Over the past five years, from 2010 to 2014, the banks’ farm lending performance was at its best in 2013 when it grew by 5.9 percent in constant terms.

Based on current prices, the growth of bank loans for agricultural production slowed to 7.3 percent in 2014 , from an increase of 8.7 percent in 2013.

“Among loan sources, private banks continued to supply the biggest amount of production loans to the farm sector,” the PSA said.

“However, their shares [of the total] were slowly decreasing through the five-year reference period,” the agency added.

The PSA said that in 2014, the share of private banks to total loans was 84.6 percent.

Also, the agency said loans from both private and government banks continued to increase in 2014, albeit at slower rates.

“The credit extension of government banks went up by 11.2 percent compared to 19 percent (in 2013),” the PSA said.

In 2014, palay growers accounted for the biggest share of the total loans extended for agricultural production at about 20 percent.

Further, the ratio of agricultural production loans to agricultural output eased to 17.3 percent last year from 17.7 percent in 2013.

The International Finance Corp. (IFC) has signed an agreement with CARD SME Bank Inc. related to services for smallholder farmers and rural entrepreneurs.