According to the 2022 Countryside Bank Survey (CBS) report released by the Bangko Sentral ng Pilipinas (BSP), the share of agriculture loans and services rose to 18.1% in 2022, with a steady increase from 17.6% in the previous year.
The upturn was chiefly observed in rural and cooperative banks (RCBs), signaling an expansion in loan products catering to various agricultural needs. These include seeds, fertilizer, working capital, farm equipment, sustainable projects, digitalization of farming activities, and agri-tourism ventures.
A joint initiative between the Department of Agriculture-Agricultural Credit Policy Council (DA-ACPC) and the BSP, the 2022 CBS Report explored lending trends and policy implications regarding agricultural financing, leveraging branch-level data.
Survey respondents, comprising universal and commercial banks (UKBs), thrift banks (TBs), RCBs, government-owned banks (GBs), and digital banks (DBs), participated nationwide, with data collected electronically.
The CBS coincided with the implementation of Republic Act (RA) No. 11901, also dubbed the Agriculture, Fisheries, and Rural Development Financing Enhancement Act of 2022, establishing baseline data to monitor banks’ compliance with the law.
Key findings of the report highlight variations in demand for agricultural loans among different banking groups, with RCBs and GBs particularly emphasizing support for small-scale agricultural borrowers.
Regional distribution of borrowers revealed varying concentrations, with UKBs having a higher presence in Luzon, while TBs showed more borrowers in Mindanao.
Interest rates on agricultural loans in 2022 ranged from 12% to 18%, with RCBs in the NCR reporting the highest rates ranging from 16% to 21%. However, UKBs and GBs offered lower interest rates, between 4.6% and 7.2%, and 3.3% and 6.6%, respectively.
The report also highlighted challenges faced by banking units when lending to the agricultural sector, including exposure to natural disasters and fluctuating borrower incomes.