BPI to strengthen agribusiness loan portfolio

MANILA, Philippines - The Bank of the Philippine Islands (BPI) is strengthening its agribusiness loan portfolio to comply with the requirements under the Agri-Agra Reform Credit Act of 2009.

The law requires banks to allocate 25 percent of its loanable funds to agribusiness (15 percent) and agrarian reform beneficiaries (10 percent).

BPI participated in the 20th International Agribusiness Trade Exhibition and Seminars recently at the World Trade Center to promote its loan programs for large-scale hog and poultry breeding. 

“This is is the first time that the BPI Agribusiness unit is participating in this event,” said Perlina Padilla, BPI Agribusiness unit head.

“We want people to know there is a unit of BPI that is dedicated specificially to the agribusiness sector. BPI is offering financial options to entrepreneurs who are willing to put up or expand their agribusiness,” Padilla said.

Banks can also comply with the law requirements through lending to accredited rural financing institutions (RFIs) which can relend funds to entrepreneurs.

Aside from this, banks can also invest in bonds issued by state-run banks Development Bank of the Philippines and Land Bank of the Philippines.

In addition to this, banks may invest in shares of stock in accredited rural financial institutions, and state-controlled companies Quedan and Rural Credit Guarantee Corp. (Quedancor), and the Philippine Crop Insurance Corporation (PCIC). 

Padilla said BPI has so far met the 15 percent requirement fot loan provision to agribusinesses in the first semester of the year, the first time the bank was able to comply since the law was revised “and made more stringent” in 2011.

“The strong growth of our agribusiness portfolio reflects the positive momentum of the agri sector which we need to strengthen in order to help grow the economy especially in the countryside,” she said.

In March, BPI launched two agribusiness loan programs to capture a sizeable market share in agribusiness loans in key growth areas for hog and poultry breeding such as Central and North Luzon.

These are the BPI Agribusiness Solutions Commercial: Hog breeding and fattening program and BPI Agribusiness Solutions Poultry Broiler Growing Program.

For the hog breeding loan program, the bank can finance up to 70 percent of the capital requirement for a 500-sow project.

BPI has partnered with global breeder Pig Improvement Company (PIC) for the supply of breeder stocks and appropriate technology.

“This will ensure that hog producers will use only good hog breeders and state-of the art equipment and machinery, improving their farm’s efficiency and therefore, their profit,” said Padilla.

PIC general manager Vincent Borromeo said the company can also provide trainings for borrowers.

“We can provide the breeder stock as well as the training for their (borrowers) people. We can help them design the farm and help them start up  their operations,” he said

The poultry breeding loan program, on the other hand, is open to growers that have existing contracts with poultry integrators such as San Miguel Foods Inc., Bounty Fresh, Bounty Agro, Foster Foods and others for their expansion programs.

The local livestock and poultry industries have remained unscathed by avian influenza and foot-and-mouth disease that affected many countries in Asia.

The government is capitalizing on this disease-free status to open up new markets for poultry and livestock.