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DP 2020-41: Projecting Loan Demand from Small Farmers and Fishers in the Philippines

This study develops and applies a method for estimating loan demand from small farmers and small fishers (SFF) in the Philippines, and projects this demand into the future. The method uses a patchwork of data, but most importantly the Small Farmers and Fisherfolk Indebtedness Survey (SFFIS) and the Registry System for Basic Sectors in Agriculture, to estimate credit loan demand from SFF in 2017. It also uses inflation and projected (or targeted) sectoral gross value-added growth to project SFF loan demand into the future. The loan demand for SFF is estimated to be from PHP 172 billion (low estimate) to PHP 367 billion (high estimate) in 2021. This is projected to grow to PHP 201 billion (low estimate) to PHP 431 billion (high estimate) in 2024.

Moving forward, the study suggests that the estimation of loan demand from SFF can be facilitated if the sampling design of the SFFIS can be revised so as to be made representative nationally (and possibly even by region) using the most recent Census of Agriculture and Fishers as the sampling frame. To help small farmers and fisherfolk, the government should ensure there is adequate fund, whether from government or from formal private sources, to meet the loan demand of small farmers and fishers for purposes of production, while still maintaining prudence. This will not only help small farmers and fishers keep their head above poverty, but also help boost food security in the country given the continuing risks of supply chain disruptions.

Comments to this paper are welcome within 60 days from date of posting.

Philippine Institute for Development Studies
Authors Keywords
Ducanes, Geoffrey M.; agricultural credit; COVID-19; small farmers and fishers; credit demand estimation; credit demand projection; determinants of credit demand; logit regression; COVID-19 impact on credit demand;
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