Climate change looms as biggest roadblock to agri-financing

Landbank of the Philippines vice president and lending center head Charlotte I. Conde said climate change has shaped up as “biggest challenge” to agri-financing.

“Since we are into agriculture, the issue on climate change still causes threat particularly to lending to agriculture,” said Conde during Wednesday’s Habi at Kape media forum at Abreeza Ayala Mall, Davao City.

LBP was mandated to serve the financial needs of farmers and fishermen especially on their recovery from the devastation brought about by the natural calamities such as typhoon.

It is also the implementing agency of Comprehensive Agrarian Reform Program involved in land evaluation, compensation to owners of private agricultural lands, and collection of amortizations from CARP farmer-beneficiaries.

On the repayment rate of their beneficiaries, Conde said in terms of lending to small farmers and producer cooperatives or cooperatives engaged in production of crops, that is where the challenge is because we know the risk involved in this sector.

Conde said the bank has somehow mitigated that risk.

“Because we require borrowers particularly those engage in production of crops to acquire or get crop insurance through Philippine Crop Insurance Corp. (PCIC),” said Conde.

The LBP vice president said when crops are damaged by certain calamities, the bank immediately reprograms or restructures the accounts of affected farmers.

“Coupled with additional financing because we believe they won’t be able to repay us when there’s no financing that comes along,” said Conde.

In 2016, LBP generated PhP12 billion loan portfolio which they hope to increase this year by 5 percent.