The Department of Agriculture – Agricultural Credit Policy Council (DA-ACPC) convened policymakers, financial institutions, and agribusiness stakeholders for the Policy Forum themed “Inclusive Finance for Small Farmers and Fisherfolk (SFF): Expanding Credit Access through Agricultural Value Chain Financing (AVCF).” The forum deepened discussions on AVCF as a strategy to mitigate risks in agricultural lending and promote financial inclusion among smallholders and value chain players.
A Holistic Approach to Agri Finance
AVCF has gained traction in the Philippines as a means to enhance financial accessibility by addressing the needs of the entire agricultural value chain – from production and processing to distribution and marketing. Rather than treating small farmers and fisherfolk as isolated borrowers, AVCF integrates them within a network that includes suppliers, processors, financial institutions, and markets. This approach enables lenders to assess risks and opportunities more effectively, leading to improved access to credit and resources for smallholders.
Despite their critical role in food production, SFF often struggle with limited financing due to factors like unstable incomes, insufficient collateral, and climate-related risks. AVCF addresses these barriers by developing tailored financial products and services that strengthen the entire agricultural ecosystem. The Bangko Sentral ng Pilipinas (BSP) has long recognized AVCF’s potential, issuing Circular No. 908 in 2016 to promote it as a sustainable financing strategy aligned with financial inclusion goals.
Underscoring the urgency of agricultural development, DA Undersecretary Roger Navarro, who represented DA Secretary Francisco Tiu-Laurel in the activity, called for a collective effort to strengthen the sector. He urged stakeholders to look beyond their individual concerns and consider the broader landscape of agriculture, emphasizing the critical role of farmers in ensuring national food security. He also highlighted the long-term consequences of neglecting the country’s agricultural capabilities, warning that dependence on external food sources could leave the Philippines vulnerable to disruptions and supply shortages.
Bridging the Gaps: Public and Private Sector Efforts
The forum gathered key government representatives from the Department of Agriculture (DA), National Economic and Development Authority (NEDA), Bureau of the Treasury, Land Bank of the Philippines, Development Bank of the Philippines, rural and cooperative banks that serve as DA-ACPC’s partner lending conduits (PLCs) and DA’s regional offices and attached agencies. Also present were local government units and private sector partners, including the Rural Bankers Association of the Philippines, Agronomika Finance Corporation, Kennemer Foods International, Asian Disaster Preparedness Center, and the Microfinance Council of the Philippines, Inc.
The DA has been proactive in strengthening agricultural value chains to improve market access and farmer incomes. Programs like KADIWA ni Ani at Kita, Agribusiness Support for Promotion and Investment in Regional Expositions (ASPIRE), and the Philippine Rural Development Project (PRDP) have been instrumental in linking farmers directly to consumers, fostering market linkages, and supporting enterprise development.
The forum featured case studies and best practices from pioneering AVCF initiatives. Among the key discussions were:
Asian Development Bank (ADB)-BSP-ACPC AVCF Pilot Program – Presented by Mr. Virginio P. Jamon, this initiative engaged six pilot banks to test AVCF models. The program demonstrated that financing high-value crops, supporting enterprises beyond production (including processing and marketing), and offering larger loan amounts led to improved repayment rates and reduced risk perception among lenders.
Producers Savings Bank Corporation (PSBC) AVCF Initiative – Mr. Cenon Mactal Ladringan, Executive Vice President and Head of the Credit Management Support Group, shared how PSBC integrated AVCF into its lending strategy. Through targeted training for lending officers, branch heads, and account officers, the bank successfully disbursed over P331 million under the AVCF model, expanding financing to SFF.
Agricultural Value Chain Financing Support and Capacity Building via Entrepreneurship and Organizational Development (ASCEND) Program – Mr. Roderick A. Marudo, Managing Director of Agronomika Finance Corporation (AFC), detailed their experience financing cacao and abaca farmers with ACPC’s funding support. By working with Kennemer Foods International (KFI), AFC provided farmers with technical assistance, access to guaranteed markets, and financial services, empowering them to enhance productivity and secure stable incomes.
A Call to Action for Inclusive Agri-Finance
During the open forum, participants shared recommendations on policy refinements, capacity-building initiatives, and expanding AVCF programs. These insights will guide DA-ACPC in refining its financing strategies and supporting financial institutions in adopting AVCF models.
DA Undersecretary for Rural Credit Roger Navarro, representing Secretary Francisco Tiu-Laurel, stressed the urgency of strengthening agriculture. He urged stakeholders to prioritize the sector’s broader needs, highlighting farmers’ vital role in food security. He warned that neglecting local agriculture could increase dependence on imports, making the country vulnerable to supply disruptions. His call for collective action aligned with the forum’s goal of promoting sustainable financing for small farmers and fisherfolk.
DA-ACPC OIC Executive Director Ma. Cristina Lopez underscored the agency’s commitment to inclusive finance: “Ultimately, we see AVCF as an inclusive means to improve farmers’ productivity, uplift their livelihoods, and enhance the food security of the nation. “
“Our vision is to see small farmers and fisherfolk financially included and expanding their production, agribusinesses upgrading their operations, policymakers advocating for the agri-fishery sector, and financial institutions embracing inclusive agri-financing programs,” she added.
As DA-ACPC continues to champion AVCF, the forum reinforced its commitment to making agricultural finance more inclusive, sustainable, and impactful for rural communities. Led by ACPC OIC Deputy Executive Director Magdalena Casuga and Planning Division Chief Jenny Aspilan, the event served as a platform for collaboration and innovation.
In 2025, DA-ACPC will host more policy forums to further drive policy improvements, strengthen partnerships, and expand financial opportunities for small farmers and fisherfolk.
