AGRICULTURAL and other small- and medium-scale enterprises (SMEs) in Mindanao need more access to financing in order to grow, the country's biggest business group said in a statement yesterday.
The Philippine Chamber of Commerce and Industry (PCCI) said the Land Bank of the Philippines (Landbank) and the government's conditional cash transfer program can play a key role in providing well-targeted financing for these economic segments.
"One of the recurring sentiments of farms especially in Mindanao is the lack of access to financing as the stringent rules and requirements of banks limit small farmers from accessing government loans," PCCI said in its statement.
It added some sectors, like the coconut industry, are not able to attain full potential due to farmers' lack of access to much-needed funds.
To provide better-targeted financing, suggestions include crafting schemes like those under the Mindanao Rural Development Program.
Another suggestion is to distribute available funds through the conditional cash transfer method "but with a repayment system."
PCCI said it is formulating a program, together with the Mindanao Development Authority, that will be modeled after the conditional cash transfer system to distribute funds to qualified farm and fisherfolk households.
Under the conditional cash transfer program, funds are given to qualified poor households subject to certain conditions, including ensuring expectant and new mothers regularly visit health centers and children attend a minimum number of classes.
The Agriculture department said in the PCCI statement that there are existing financing schemes for the agricultural sector, including a P7.4-billion guaranty fund from Landbank and the Agricultural Competitiveness Enhancement Fund that started in 2010.
PCCI said "creative subsidies are a step towards readiness of the sectors for the 2015 Association of Southeast Asian Nations integration" which will see local markets being opened up to competition from neighboring economies.
The suggestions were made during the PCCI Roundtable Discussion on Agriculture held last July 4.