Banks to ramp up lending to agri sector

Banks are looking to increase lending to the agriculture sector this year amid better economic conditions, higher demand for agricultural loans and consolidation of government programs that would boost banks’ agricultural loan portfolio.

- KEISHA TA-ASAN

The results of the survey jointly conducted by the Bangko Sentral ng Pilipinas (BSP) and the Department of Agriculture showed that 72 percent of respondent banks were planning to raise their loan volumes to the agri sector.

“The proportion of those expecting to increase agricultural loan volume vary by type of banks with rural and commercial banks (around 76 percent) being the most bullish with government banks following closely at around 73 percent,” the BSP said in the 2022 Countryside Bank Survey baseline report.

The proportion of banking units who saw growth in agricultural lending this year stood at 74 percent in 2024 for thrift banks, while universal and commercial banks were at around 38 percent.

“There is scope to consider that universal and commercial banks may be implementing a form of division of labor with agricultural lending being assigned to affiliated thrift bank and rural bank subsidiaries,” the BSP said.