The Bangko Sentral ng Pilipinas (BSP) is pushing for an updated law on warehouse receipts financing as an innovation that would help provide small businesses access to funds as part of efforts to bolster the agriculture sector.
Citing experiences in other countries, the BSP said that a well-functioning warehouse receipts system can support collateralization of post-harvest produce owned by farmers, traders, and processors, and held in licensed warehouses.
To enable this and benefit micro-, small- and medium-sized enterprises (MSMEs), amendments to the 110-year-old Warehouse Receipts Law of 1912 are needed.
Proposed updates include the expansion of access to credit by professionalizing the warehousing activity through the accreditation of warehouses and warehouse operators and establishment of an electronic warehouse receipts registry.
“Now, more than ever, we need to take a whole-of-society approach toward putting in place necessary and responsive elements that make lending to the agriculture sector viable,” BSP Governor Felipe Medalla said in a statement.
According to the central bank, countries that have implemented such a program have seen reduced post-harvest losses, improved stability of market prices, increased food security, and a heightened level of formalization of businesses within the sector.
The regulator noted that while MSMEs and agriculture account for a large part of total employment in the country, Filipinos engaged in agriculture remain among the most vulnerable segments of the population. INQ