May 28, 2013

Philippine bank extends loans to poultry, swine sectors 

The Bank of the Philippine Islands (BPI) would increase its loan exposure to the Philippine poultry and livestock industries, noting the country's potentially strong position in the poultry and swine sectors in Southeast Asia because of its consistency in warding off bird and hog diseases.

Under the programme, the lender would consider existing farms and production facilities as loan applicants, and would extend as much as PHP200 million (US$4.8 million) to a single application, with 60% equity. Reymundo Castro, senior vice president and provincial lending head of the Ayala-led bank, said its new loan programme, BPI Agribusiness Solutions, would focus on giving poultry and swine producers more access to capital to upgrade their farms and/or production facilities. Castro added that BPI expects to become the leading provider of loans in three to four years.

Perlina I. Padilla, BPI assistant vice president and agribusiness unit head, said interest would still be low at 6%, and applicants may apply for this interest on agreed terms, like six years for poultry and up to 60 years for swine.

According to Padilla, a production level of at least 250 heads of sow would be good for the domestic market, while a production level of at least 500 heads would be enough as an entry-level figure for the export market.

Though BPI has recommended sows to be "upgraded," Andrew Bateson of Genus Pig Improvement Co. made it clear that this means encouraging "accelerated natural selection" in improving sow traits, rather than going into genetic modification.

The bank said BPI Agribusiness Solutions would like to position itself as a leading loan and capital provider to Filipino livestock producers and help further improve the country's PHP4-billion (US$96 million) pork industry so it could stave off heavy competition once the Association of Southeast Asian Nations single market is put in place in 2015.

According to the BPI, the swine industry is the largest agriculture-related sector in the Philippines after rice. Agriculture has contributed 12.3% or PHP11.9 billion (US$285 million) of the country's gross domestic product in 2011. Castro said the new programme would also cater to non-livestock agribusiness ventures. He added that it would also serve medium-sized businesses that help aggregate the output of Filipino producers to meet their international supply commitments.