BPI opens doors to small local farmers

MANILA, Philippines - As growing poverty and a lack of food security threaten the country, Ayala-led BPI Foundation is opening up its coffers to more small-holder farmers to help spur the development of the local agriculture sector.

“If we look at the farm community sector, they remain to be at lowest of the low when in fact they should be at the center because they are key to food security,” BPI Foundation SVP and executive director Fidelina Corcuera said.

Data showed that farmers belong to the poorest of the country’s basic sectors, with one of the highest poverty incidences at 38.3 percent.

“We should bring back the importance of farmers because the issue at hand is very grave and we have to come up with something that’s doable,” she added.

Bank of the Philippine Islands SVP Junie Veloso noted that while lending to smallholders continues to increase, the sector’s overall contribution to the economy has declined in the past years.

BPI alone has lent around P150 billion over the past 15 years. Approximately 25 percent of the bank’s loanable fund is allotted for agriculture.

PinoyME Foundation president and CEO Danilo Songco said smallholder farmers have little chance of progressing because they lack the economies of scale to penetrate the larger and more mainstream market as they tend to fall prey to traders who often take advantage.

“The key to it is for farms to form cooperatives so they can gain leverage, they can dictate better pricing for their produce and get cheaper inputs. As long as they need money, we will give it as long as we see them as bankable,” Veloso explained.

BPI is one of the few private banks that has invested in the agriculture sector for 40 years now.

“We design a product so that we can collect from the borrower when he has the money. We design products that suit the cashflows of the farmers,” he said.

Currently, BPI has 800 to 900 agriculture borrowers and only 10 percent of which are smallholders.

The bank is also exploring the adoption of a crop insurance program but Veloso said the plan is still a work in progress.