RBs concerned over El Niño

MANILA, Philippines - The Rural Bankers Association of The Philippines (RBAP) has expressed concern over the effect of the El Niño phenomena and other consequences of climate change on crop production, which may have a devastating effect on microenterprise.

Rural bankers discussed the consequences of climate change that affect the rural economy in a forum organized by the British embassy and the RBAP. They tapped experts to talk about measures to manage the impact of El Niño and other climate change-related occurrences and to provide farmers with helpful information to deal with the issues that affect their livelihood.

A study by the Asian Development Bank (ADB) on the economics of climate change indicate that increased frequency and intensity of extreme events, including temperature increase have affected the country’s agricultural production, with future projections pointing to impacts on Mindanao and areas of Luzon, putting even greater strain on food security.

The impact to both farmlands and small businesses in rural areas will be devastating. Furthermore, any change in agricultural output would affect micro enterprise as these are closely related to the support structure in the rural economy.

El Niño has already struck several parts of the country causing a shortage of rainfall for both farmers and fishpen operators. The Magat dam, a source of irrigation for 85,000 hectares of farmland in Central Luzon and 360 megawatts (MW) of electricity for the Luzon grid, is currently at its lowest point of 163 meters.

As a result, the province of Isabela has already been placed under a state of calamity due to the dry spell that has beset the area for a month now.

United Kingdom South East Asia Climate Change Network head John Pearson and ADB assistant chief economist Dr. Juzhong Zhuang, both warned that climate change if not addressed would have an effect of a reduction in the gross domestic product by at least 6.7 percent for countries in Southeast Asia.

Pearson added that the rural banking sector is a vulnerable area due to the fact that it has one million borrowers, six million depositors and 700 branches across the country.

“Rural banks over the years have been closely supportive of the development of small and medium enterprises (SMEs) in rural areas by providing over P8 billion in loans to over 800,000 microentrepreneurs. A decrease in GDP of 6.7 percent would have a devastating impact on the rural economy and to a much larger extent the national economy. So we really have to talk about solutions and mitigating measures brought by this current global problem,” Joseph Omar Andaya, RBAP president said. He added that this is the first step to developing solutions in the respective areas where they operate.

Commissioner Lucille Sering of the Philippine Climate Change Commission presented projects for carbon financing and how rural bankers can actively participate in the new green economy.

Rural banks in the Philippines have provided a total of P35.5 billion in loans for the Agri-Agra sector over the years.

Fifty percent of the total loan portfolio of rural banks is dedicated to this sector, hence the great concern shown for the ill effects of climate change on Philippine agricultural output. — TPT