This study is motivated by the financing problem faced by the Philippine Crop Insurance Corporation (PCIC), which implements the country's crop insurance program. One proposal to address the problem is to raise the farmer's premium or the price of insurance. As most crop insurance is extended in the form of mandatory cover of uncollateralized crop loans from government financial institutions (GFIs), such a step would raise the price of production credit provided by the government. Given that GFI lending programs are the sole source of formal finance for most of the country's small farmers, a premium adjustment would have to be carefully evaluated in terms of its impact on credit demand.