PH banks’ farm lending tops P3T

MANILA, Philippines — Bank lending to the agriculture sector surpassed P3 trillion in June, with lenders exceeding their mandated lending quota despite persistent headwinds facing the industry and the economy.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed total bank financing for agriculture, fisheries and rural development amounted to P3.1 trillion, growing by 29 percent from a year earlier.

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The amount was equivalent to 89.76 percent of P3.5 trillion in total loanable funds generated during the period.

Under Philippine law, banks are required to earmark 25 percent of their loanable funds for agriculture, fisheries and rural development. However, newly established institutions are granted a five-year grace period.

Figures showed banks would have needed to lend about P865.94 billion to the sector as of June to meet the statutory requirement. Instead, lending was more than three times that amount.

At the same time, it was the strongest compliance since September 2025, when agriculture lending accounted for 101.78 percent of banks’ total loanable funds.

The robust lending comes even as agriculture remains one of the more vulnerable parts of the Philippine economy. The sector has historically accounted for about a tenth of gross domestic product and employed roughly a quarter of the country’s workers, but decades of underinvestment and the expansion of other industries have left it struggling to modernize and raise productivity.

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For banks, lending to agriculture also carries risks that are less common in other sectors. The BSP and the Department of Agriculture have identified natural disasters and uncertainty over harvests as among the most persistent obstacles to extending credit to farmers and other agricultural borrowers.

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Broken down, big banks accounted for the bulk of lending, providing P2.8 trillion as of June, up 27 percent from a year earlier. Their agriculture-related lending amounted to about 98 percent of their eligible credit and investments.

Thrift banks increased their agriculture lending by 27 percent to P155.4 billion, equivalent to 54.84 percent of their eligible credit and investments.

Rural and cooperative banks provided P110 billion to farmers and fisherfolk, up nearly 4 percent from a year earlier. Their lending translated to a compliance rate of 66.41 percent.

Digital banks, many of which are still in the early stages of their operations, had yet to provide financing to the sector. INQ