BANKS met their mandated lending quota for the agriculture sector as they disbursed over P3 trillion in loans as of June, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
As of end-June, banks lent P3.109 trillion to the agriculture industry, reflecting 89.76% of the banking sector’s P3.464-trillion loanable funds for the period.
This means lending to the agriculture sector topped the BSP’s quota for agriculture, fisheries and rural development (AFRD) financing.
Under the law, banks are mandated to allocate at least 25% of their total loanable funds for AFRD financing, which includes loans for agrarian reform beneficiaries, agrarian reform communities or other priority sectors, until July 2032.
However, the requirement does not apply to newly established banks within the first five years from the start of their operations.
Year on year, domestic banks’ AFRD financing jumped by 29.23% from P2.406 trillion. It was also 8.29% higher than the P2.871 trillion granted in the first quarter.
The bulk of the financing was loans amounting to P3.07 trillion. This rose by 29.1% from the P2.378 trillion in the same period a year ago and by 8.17% quarter on quarter from P2.838 trillion previously.
Meanwhile, banks’ investments in the local agriculture sector soared by 54.13% to P35.62 billion from P23.11 billion the previous year. It also jumped by nearly 21% from P29.44 billion in the first quarter.
Broken down, P25.86 billion were in the form of debt securities, while P9.76 billion were equity securities.
BSP data also showed that lenders had P3.59 billion in eligible deposit placements in rural financing institutions, down 26.73% from P4.9 billion in the second quarter of 2025 but up 3.16% from P3.48 billion a quarter ago.
The banking industry’s eligible deposit placements in rural financial institutions amounted to P3.48 billion at end-March. This was 13% below the P4 billion seen in the prior year, but up 5.14% from P3.31 billion in the fourth quarter.
Of the sector’s total AFRD financing in the second quarter, universal and commercial banks disbursed the largest with P2.851 trillion as it held P2.901 trillion in total loanable funds. Year on year, big banks’ agricultural loans grew by 30.63% from P2.183 trillion.
Meanwhile, thrift banks’ lending for agriculture rose by 25.58% to P147.16 billion from P117.18 billion last year.
For rural and cooperative banks, the agriculture sector received 4.26% more loans valued at P110.49 billion from P105.98 billion in 2025.
Thrift banks’ total loanable funds amounted to P283.33 billion in the second quarter, while rural and cooperative banks had P166.38 billion.
Digital banks did not lend out P112.94 billion of their total loanable funds during the period. — Katherine K. Chan
Read More: Bank lending to agriculture sector tops P3 trillion as of June
