ESPRESSO MORNINGS
By Joe Zaldarriaga
He was the architect behind Meralco’s most celebrated milestones in the field of communications— steering the company to five-time Company of the Year honors at the Philippine Quill Awards and leading the only PR team ever named Team of the Year in the history of the Anvil Awards.
Manong Joe’s leadership also extends as a respected member of the Board of Trustees for the Public Relations Society of the Philippines (PRSP), concurrent with his role as Chairman of the International Association of Business Communicators Philippines (IABC Philippines) where he also served as its President.
Manong Joe is a distinguished awardee of the medallion of honor and scroll of commendation from the University of Manila, owing to his years in public service as a communications professional. He shares his insights through columns in renowned publications, including The Philippine Star’s The Z Factor, and Philippine News Agency’s ESPRESSO MORNINGS.
Agricultural credit in the Philippines has always been a puzzle. Year after year, billions are poured into funding for the country’s agriculture sector yet our farmers and fisherfolk often remain locked out of formal credit lines and are still among the poorest — with their livelihoods in a constant state of uncertainty brought about by threats of climate change, rising fertilizer costs, and fuel spikes.
Farmers and fisherfolk often face difficulties securing formal funding for their livelihoods, relying instead on informal credit options that further drown them in debt rather than empowering them. Just last month, the Department of Agriculture (DA) suspended loan payments for farmers and fishers as surging global fuel prices affected the sector to prevent loan defaults and ensure the country’s food security.
The 2026 national budget allocated PHP215 billion for agriculture, higher by 38 percent from the previous year, to boost infrastructure and support for the sector. Yet despite this substantial funding, banks continue to shy away from lending directly to farmers and fisherfolk, preferring “alternative compliance” under the Agri-Agra Reform Credit Act, such as investing in government securities. The mandate exists, but the money doesn’t reach the ground.
Speaking at the recent European Chamber of Commerce of the Philippines Sustainable Agriculture Conference, Congressman Arthur Yap summarized the agricultural credit problem of the country: “The Philippines does not lack capital. It lacks execution discipline.”
It’s a line that resonates because it captures the lived reality of farmers and fisherfolk who see government budgets balloon year after year but still struggle to access affordable loans. Banks are not to blame for this situation. It’s not simply because financial institutions are unwilling to lend to the sector; it’s because banks operate on measurable risks. Simply put, it’s because the rules on agricultural risks, such as weather shocks, are unclear and lack structure. Without clear rules on how losses are absorbed or how recoveries are managed, risk cannot be priced. And if risk cannot be priced, banks cannot commit capital.
The consequences are visible in the data. Poverty incidence remains high among agricultural workers—farmers (27 percent) and fisherfolk (27.4 percent) based on 2023 data. Inflation continues to accelerate. The Philippine Statistics Authority reported that inflation accelerated to 7.2 percent in April this year, up from 4.1 percent in March, due to a faster increase in the prices of food and non-alcoholic beverages.
These are not just numbers but lived realities on the ground that are felt more deeply by the poor, including our farmers and fisherfolk.
The easy and quick response to this problem would be subsidies but this is only a band-aid solution. What our agriculture sector needs are smarter structures with clear rules that systematize risks. In such a structure, losses would be allocated in advance, and recoveries would be systematized. In this model, banks lend, insurers absorb shocks, collateral systems improve recoveries, and monitoring reduces information gaps. The challenge lies in execution.
As Rep. Yap said: “Once risk is executable, it becomes priceable. And once risk is priceable, capital can move.”
Without scalable credit, farmers remain trapped in poverty, unable to invest in productivity or withstand shocks. Food security remains threatened, inflation spikes, and the economy absorbs the costs. Billions of public funds will continue to circulate in closed loops unless structural changes are implemented.
The real challenge is execution discipline. By implementing structural changes, our government helps ensure that our farmers and fisherfolk will have access to credit that doesn’t drown them further in debt, but empowers them to become stronger pillars of the economy.
