MICROCAPITAL BRIEF: Department of Agriculture of the Philippines Orders Release of $2.3m for Microfinance Activities in Areas Stricken by El Niño Drought

The Department of Agriculture of the Philippines, which is responsible for promoting prosperity in the country’s farming communities, recently ordered the release of PHP 100 million (the equivalent of USD 2.27 million) for microfinance activities in areas affected by an El Niño-induced drought. The Agricultural Credit Policy Council (ACPC), one of the Department’s councils, announced the order and called it an effort to “help mitigate the adverse impact of climate change, global warming, and El Niño on the agricultural sector, especially on the lives of small farmers and fisherfolk who suffer most in times of natural and man-made calamities” [1].

Under the same resolution, the Department of Agriculture approved new guidelines for the Department’s implementation of an “agri-microfinance program” and agreed to “review” the Department’s current approach to rural lending through ACPC-administered financing programs [1]. Further details on new programs or on programs to be amended were not available as of this writing.

In March 2010, members of the Rural Bankers Association of the Philippines (RBAP), an organization founded to promote the rural banking industry in the Philippines, announced their intent to assist small and medium-sized enterprises affected by El Niño through restructured loan repayment schedules and loans for water pumps or hydroelectric power [2]. In the first six months of 2010, El Niño caused a drought in the Philippines and the agricultural sector subsequently shrank by 2.59 percent [3].

By Lindsey Shaughnessy, Research Associate

About the Department of Agriculture of the Philippines: The Department of Agriculture of the Philippines defines its goal as “prosperous rural communities, built on profitable farms that provide surplus for agro-industry and food security.” The Department’s main objectives are developing new land for agribusiness and reducing the “costs of wage goods through productivity enhancement, more efficient logistics, and improved retailing linkages.” The Agricultural Credit Policy Council (ACPC) is one of several councils reporting to the Secretary of Agriculture. The ACPC aims to support and implement agricultural policies and programs that promote access to financial services for the countryside.

About the Rural Bankers Association of the Philippines (RBAP): Founded in 1955, the Rural Bankers Association of the Philippines (RBAP) was initially established by representatives from the original eighteen rural banks operating in the Philippines. RBAP’s stated intention is “to become the leading force in the Philippine national banking system in bringing the benefits of the economic system to increasing numbers of rural customers” through a coordinated banking system.

Sources and Additional Resources:

[1] GMA News, “DA releases P100M for micro-finance in El Niño-stricken areas”, August 25, 2010. http://www.gmanews.tv/story/199408/da-releases-p100m-for-micro-finance-in-el-nintildeo-stricken-areas

[2] MICROCAPITAL BRIEF: “Rural Bankers Association of the Philippines (RBAP) Takes Measures to Assist Farmers and Small and Medium-Sized Enterprises Affected by El Nino”, March 23, 2010. https://www.microcapital.org/microcapital-brief-rural-bankers-association-of-the-philippines-rbap-takes-measures-to-assist-farmers-and-small-and-medium-sized-enterprises-affected-by-el-nino/

[3] GMA News, “Agriculture reels from El Niño-induced dry spell”, August 16, 2010. http://www.gmanews.tv/story/198658/agriculture-reels-from-el-nintildeo-induced-dry-spell

MicroCapital’s Microfinance Universe profile: Department of Agriculture of the Philippines

MicroCapital’s Microfinance Universe profile: Rural Bankers Association of the Philippines (RBAP)

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