The Philippines has an abundance of cultivable land, adequate precipitation and moderate temperatures, and a large workforce. But all these favorable conditions have not translated into a thriving agricultural sector in the country, which also depends heavily on imports to feed its people. Things can change for the better; it would require more investment in the sector. But banks aren’t extending farmers enough credit, hampering their capacity to buy fertilizer, pesticides, and other necessities. Agricultural lending was at an all-time low in 2022. And that’s despite the law that mandates banks in the Philippines to devote 25% of their loanable funds to the agriculture sector. So, how are banks getting around this requirement, and why are they doing so? How can the Philippines get out of this catch-22 and learn to lend farmers more effectively? Do neighboring countries offer any solutions?
