7.1. Agencies and Organizations
7.2. Support services
7.1.1 Government Agencies Involved in Fisheries
As this paper was being prepared (Dec. 1998 to Jan. 1999), the administration and management of agriculture and fisheries was in a transition stage between old laws and newly-passed laws on agriculture and fisheries. Earlier, the Republic Act (RA) 7160, the Local Government Code of 1991 already transferred regulatory and licensing functions over municipal fisheries and agricultural and fisheries extension service to the local government. On December 22, 1997, RA 8435, Agriculture and Fisheries Modernization Act of 1997 (AFMA) was signed into law. Before its Implementing Rules and Regulations could be issued, RA 8550, the Philippine Fisheries Code of 1998 was signed into law on February 25, 1998. These three laws together will have a profound impact on the administration and management of agriculture and fisheries; research and development; extension service; as well as the management and delivery of rural credit and even fisheries education. Each of these aspects will be discussed in the appropriate sections.
The management and development of Philippine fishery resources is under the jurisdiction of the Department of Agriculture. Under the Philippine Fisheries Code of 1998, the position of Undersecretary for Fisheries and Aquatic Resources has been created in the Department of Agriculture “solely for the purpose of attending to the needs of the fishing industry.” The Undersecretary for Fisheries shall “set policies and formulate standards for the effective, efficient and economical operations of the fishing industry” and shall “exercise overall supervision over all offices related to fisheries.” Two agencies, the Bureau of Fisheries and Aquatic Resources (BFAR) and the National Fisheries Research and Development Institute (NFRDI) are directly under the Undersecretary for Fisheries.
BFAR is the agency tasked with the development, conservation, management, protection and utilization of fisheries and aquatic resources. Under the Philippine Fisheries Code of 1998, BFAR shall once more exercise line functions and shall have a direct presence in the regional, provincial and municipal levels. Between 1987 to 1998, BFAR was reduced to a staff bureau with no direct hand in operations this being handled through the DA Regional Offices.
The NFRDI is a totally new agency and was created under the 1998 Fisheries Code. As of January 1999 when this paper was being prepared the said institute has not yet been organized. The NFRDI is intended to serve as the primary research arm of, but is not under, BFAR. Instead it is directly attached to the DA and shall have its own governing board with the Undersecretary for Fisheries as Chairman and the BFAR Director as Vice Chairman.
A third agency, the Philippine Fisheries Development Authority (PFDA) which is organized as a government-controlled corporation is not operationally under the DA but is under the Department’s supervision. The PFDA is tasked with the management and operation of all public fishing ports, ice plants and cold storage plants.
Under the Department of Science and Technology (DOST), several sectoral councils have been organized for “the formulation of strategies, policies, plans and programs and projects for science and technology development; for programming and allocation of government and external funds for research and development; for monitoring research and development projects and for generation of external funds” in their respective sectors. One of these councils is the Philippine Council for Aquatic and Marine Research and Development (PCAMRD). The DOST also has its Capability and Productivity Enhancement (CAPE) program which provides consultants to any technology-based industry, including aquaculture.
The Local Government Code and the Fisheries Code of 1998, transferred government supervision and licensing of all types of aquaculture to the Local Government Units (LGUs), specifically the municipal government. The only licensing function left with BFAR as far as aquaculture is concerned is the granting of Fishpond Lease Agreements for public lands.
In addition to the regular agencies, there are also government-private sector councils that have been formed for fisheries. One is the National Agriculture and Fisheries Council (NAFC) which has been formed to assist the Department of Agriculture in agriculture and fisheries policy formulation. The fisheries group of NAFC consists of representatives from commercial fisheries, municipal fisheries, aquaculture, processors and exporters, research and development, and finance and credit.
The other councils are the Fisheries and Aquatic Resources Management Councils (FARMCs) at various levels: national (NFARMC), municipal or city (M/CFARMC, and bays, lakes and reservoirs bounded by two or more municipalities to be known as Integrated FARMC (IFARMC). LGUs are also authorized to form barangay (village)-level FARMCs whenever necessary. The NFARMC has not yet been formed having been created only in 1998. The creation of M/CFARMC precedes the NFARMC by a few years, but only a few municipalities so far have formed their respective councils. It is expected that the M/CFARMC and the IFARMC will have an important role to play in the sustainable development particularly of sea-based or lake-based aquaculture.
The NFARMC shall serve as an advisory/recommendatory body to the Department of Agriculture in policy formulation and the preparation of the National Fisheries Industry Development Plan. It shall be chaired by the Undersecretary of Agriculture (presumably the Undersecretary for Fisheries) and shall have as members the Undersecretary of Interior and Local Government, five members representing the fisherfolks and fishery workers, five members representing commercial fishing, aquaculture and processing, two from the academe and one representative of NGOs involved in fisheries.
The M/CFARMC shall assist in the preparation of the Municipal Fishery Development Plan and recommend the enactment of municipal fishery ordinances to the municipal council. The membership of the Council shall consist of the muncipal or city planning development officer, the Chair of the Agriculture/Fishery Committee of the municipal council, a representative of the municipal/city development council, a representative from the accredited NGO, a representative from the private sector; a representative from DA, seven municipal fisherfolk, three commercial fishers, and one fish worker.
The IFARMC has a similar role to the M/CFARMC except that their reach covers more than just one municipality. Membership is likewise similar to the M/CFARMC although it involves representatives form all the municipalities and cities concerned.
7.1.2 Private Organizations and NGOs
The Philippines is a haven for non-governmental organizations or NGOs and people’s organizations or POs since the People Power Revolution in 1986. POs are membership-based while NGOs may be a private service institution or an advocacy group registered non-stock, non-profit corporations. The Securities and Exchange Commission (SEC) estimates that there are about 58,000 non-stock, non-profit organizations, even as many other similar organizations remain unregistered. From the government perspective, all these are deemed to be NGOs. Many of the POs may be registered as cooperatives with the Cooperative Development Authority (CDA) since the Cooperative Development Code (R.A. 6938) already gives them a juridical personality without being registered as corporations with the SEC although some may also have incorporated themselves as well.
The government since 1996 opened their doors to NGOs, thereby providing space in the corridors of power, no matter how narrow. The Ramos government (1992 to 1998) further increased such occasions and went one step further by establishing councils and other formal bodies with stipulated NGO and PO representation. This section is largely based on a review of the development of Philippine NGOs made by Constantino-David (1997).
In order to improve their effectivity Philippine NGOs have formed networks. One of them the National Council of Social Development Foundation (NCSD) started way back in the 1950s as the Council of Welfare Foundations of the Philippines Inc.(CWAFPI). PBSP, founded in the early 70s, is a network of business corporations as well as of those NGOs it supported. The Association of Foundations (AF) was also established during the early 1970s. The social action centers of the Catholic church formed the National Secretariat for Social Action (NASSA), the Protestants, the National Council of Churches in the Philippines (NCCP) and the Ecumenical Center for Development (ECD which was organized in 1978.
The National Association of Training Centers of Cooperatives (NATCCO), the precursor of the present National Confederation of Cooperatives, was a response to the attempts of the Marcos dictatorship to regulate cooperatives. Other sectoral, regional and national networks were also in the process of formation during this period, one of these was the Philippine Partnership for the Development of Human Resources in Rural Areas (PHILDHRRA) which was formally launched in 1983. In 1986 the Council for People’s Development (CPD) and in 1988 the Partnership of Philippine Support Service Agencies (PHILSSA).
In 1990, all the networks mentioned above formed the Caucus of Development NGO Networks (CODE-NGO). With thousands of NGOs the need to police their own ranks became necessary. In 1997 the Philippine Council for NGO Certification (PCNC) was formed as a voluntary corporation and service organization whose main function is to certify non-profit organizations that meet established minimum criteria for quality service to underprivileged Filipinos (Cuyugan, 1998). The PCNC came into existence as a result of the Comprehensive Tax Reform Program (CTRP) of 1997. The Department of Finance had recommended stopping tax incentives to donor institutions under the new system, because it was felt some donors were using NGOs as tax dodges.
Expectedly quite a few NGOs are active in the fisheries sector although many are more concerned with the environment rather than on industry or livelihood development. While most, if not all, have been established for a definite geographical or geo-political area they have also formed regional and sometimes national federations. Some of the more active coalitions of fisheries NGOs are the National Coalition of Fishermen’s Association for Reform (NACFAR) and the PAMALAKAYA, a national federation of fisherfolk organization working for the democratization of the fishing industry. Very few have been organized for the promotion or development of aquaculture, in fact many of the fisherfolk organization often rally against aquaculture operations especially if these are perceived to be encroaching on common fishing grounds, obstructing navigation or degrading the environment through their discharges.
Fish farmers may also organize themselves or encouraged to organize by an established NGO, to assert their rights, instill some order among themselves or obtain necessary services from the government. In San Pablo City, Southern Luzon, small fishermen turned fish cage operators formed the SPCMBY Federation in the 1980s. The initials stand for names of the six crater lakes where they operate (Sampaloc, Palacpaquen, Calibato, Mohicap, Bunot, and Yambo.). Santiago and Arcilla (1991) reported that the Federation had 700 members representing 60% of the 28 ha cage area.
Individually or as federations fisheries NGOs have been formed as advocacy groups. Many have community organizing capability but do not have technical capability for any livelihood or entrepreneurial activity. Notable exceptions are the large “traditional” NGOs which have been formed as charitable or service organizations with the resources to hire technically competent people and operate pilot or deomonstration units for a particular technology package. Two such NGOs active in promoting small-scale aquaculture technologies as an alternative livelihood for fisherfolk are the International Institute of Rural Reconstruction (IIRR) and the Philippine Business for Social Progress (PBSP).
The IIRR is a “non-profit, non - government organization that aims to improve the quality of lives of the rural poor in developing countries through rural reconstruction: a sustainable, integrated, people-centered development strategy generated through practical field experience.”(IIRR and SMISLE, 1998). The IIRR recently co-produced a manual with the EU-assisted Small Islands Agricultural Support Services Programme (SMISLE) entitled “Livelihood Options for Coastal Communities.” Of the ten options presented, six are aquaculture-base: mangrove gardening, mudcrab pen culture in mangroves, lobster culture, siganid culture in fixed pens, grouper culture in floating cages and semi-intensive milkfish culture in brackish water ponds.
PBSP is an association of some 175 companies in the country that allocate a portion of their net profit to social development as well as a network of close to 500 NGOs it considers its partners. Established in 1970, it is involved in community development, small enterprise promotion, environmental conservation, agrarian reform and relief and rehabilitation. PBSP also provides training and consultancy services to NGOs and POs nationwide. Its Center for Rural Technology Development is field-testing and validating sea farming and cage culture technologies for various high-value species such as abalone, lobster, prawns and grouper in Samar (Eastern Visayas) (PBSP, 1998).
7.2.1. Educational Institutions
In a review on fisheries education made by Fernandez (1995), there were 74 schools of fisheries in the Philippines, 33 of which were part of state colleges and universities (SCUs). The rest were presumably “stand-alone” college or schools of fisheries. These institutions offer Diploma in Fisheries (3-year curriculum); and Bachelor of Science in Fisheries (4-year curriculum) with at least three majors: Inland Fisheries, Marine Fisheries, and Fish Processing Technology. Fisheries Education and Fisheries Business Management may also be offered in some schools. Aquaculture is part of the Inland Fisheries curriculum and is oriented heavily towards pond culture. Graduate program in Fisheries (Master of Science level) are offered only in two state universities and only the University of the Philippines in the Visayas offers a PhD program.
Supervision over tertiary education used to be the exclusive domain of DECS. Since 1994 supervision over technical and skills course such as the 3-year diploma courses in fisheries have been given to the newly-formed Technical Skills and Development Authority (TESDA) with tertiary level education (Bachelor’s degree and higher) under the Commission on Higher Education (CHED). Only elementary and secondary education continues to be under DECS.
It is generally conceded that fisheries education in the Philippines requires considerable improvement and upgrading and that a thorough review on the continued existence of many of the fisheries schools is long overdue. The archipelagic characteristics of the Philippines motivated the Department of Education, Culture and Sports (DECS) in the past to establish Fisheries schools in various parts of the country often at the instance of politicians. As a result many have been established regardless of actual demand for fisheries graduates and a large percentage are below standard. There was also a mass conversion of fishery secondary schools into tertiary level institutions.
In an evaluation of tertiary schools in fisheries made by the Technical Panel for Agricultural Education (TPAE) in 1993 about 40% of the 129 programs in evaluated have less than 60% compliance of the minimum standards. Of the 36 SCU programs evaluated 34% have only 60 to 79% compliance with the minimum standards set by TPAE, 20% with at least 80 to 99% compliance and only 8.6% with 100% compliance. The deficiency starts with faculty quality and quantity and is aggravated by poor physical facilities. Inadequate budgetary support makes it impossible for the school library to update their holdings, and for the faculty to improve their knowledge through research along their area of specialization, and to participate in seminars, symposia and workshop to enable them to keep abreast with technology.
In addition to the fishery curriculum, another academic program that provides good basic education for aquaculture technicians for research or for industry is the marine biology program offered in some universities. Where fisheries education is exclusive to state-run institutions, marine biology is offered by some of the private universities. Many of the graduates of such program have ended up in aquaculture.
A multi-sectoral National Agriculture and Fisheries Education System (NAFES) Committee is being formed to strengthen the human resources of the agriculture and fisheries sector. The Committee has been directed to formulate programs starting with the primary and secondary schools mainly for values formation and for developing appreciation for agriculture and fisheries as career or livelihood choices and developing positive attitudes towards entrepreneurship. For post-secondary education the Committee shall look into flexible process of curriculum development; integration of dual training system in the curricula; integration of entrepreneurship and global competitiveness in the agro-fisheries curricula; institutionalizing of skill standards, technician testing and certification; as well as for the upgrading of the physical facilities and hardware for agro-fishery education.
For tertiary education, the CHED has been directed to formulate a system of accreditation for a Network for National Centers of Excellence (NCE) in Agriculture and Fisheries Education and to rationalize the whole tertiary education system in agriculture and fisheries. Only one fishery and one agriculture national university of college shall be selected as an NCE per region and only one fishery institute per province. Those not selected as NCE shall no longer be allowed to offer agriculture or fishery courses starting on School Year 1999-2000, except when jointly offered with an accredited NCE.
7.2.2. Research and Development
The passage of AFMA has led to the creation of a National Research and Development System in Agriculture and Fisheries (NaRDSAF) which shall serve to complement the National Extension System in Agriculture and Fisheries (NESAF). In order to provide an effective linkage between research and extension a Council on Extension, Research and Development in Agriculture and Fisheries (CERDAF) has been formed.
There are two national agencies concerned exclusively with fisheries and aquaculture research in the Philippines, PCAMRD and the newly-formed but still inactive NFRDI. PCAMRD is a coordinating body under the Department of Science and Technology (DOST). As such it has been tasked with the formulation of policies, prioritization of research topics and allocation of state funds for research and development. NFRDI once formed is expected to establish and operate research and development centers.
The Bureau of Agricultural Research (BAR) of the Department of Agriculture also conducts research and development work in aquaculture through its network of Fisheries Research Outreach Stations (ROS) which are located in various parts of the country. Many of the Fisheries ROS were aquaculture demonstration farms of the BFAR and under the new Fisheries Code will reportedly be reverted back to BFAR. Much of the work done in the ROS involve field trials, demonstration and technology adaptation rather than technology generation.
Under AFMA the PCAMRD is to coordinate closely with BAR in the screening of research proposals and in the monitoring of R & D projects. AFMA has directed that funding for agriculture and fisheries research should be equivalent at least to one percent of the Gross Value Added in agriculture starting in 1999 of which 20% is to be allocated for basic research and 80% for applied research and technology development. This will in effect almost double the budgetary allocation for R & D in agriculture, forestry and fisheries considering that this has been averaging only 0.58% of GVA from 1986 to 1995 (Table 27).
The presence of the SEAFDEC Aquaculture Department in the Philippines has resulted in the filling of many gaps in Philippine aquaculture research. Being a regional treaty organization, SEAFDEC AQD research program is formulated to serve the needs of the region and is arrived at through consultation with member countries. However since all the member countries belong to practically the same climatic zone and share the same species, the regional needs are, more often than not, congruent with national needs. Through a system of consultation and discussion with the industry and the local aquaculture R & D sector, SEAFDEC AQD prioritizes its research and avoids duplication of work with local institutions. SEAFDEC AQD research outputs are published mostly in international refereed journals.
Another international research organization based in the Philippines is the International Center for Living Aquatic Resources Management (ICLARM). Although not exclusively dealing with aquaculture, ICLARM was instrumental in the research and development work leading to the development of the GIFT Tilapia. The organization also actively promotes the integration of aquaculture with agriculture.
7.2.3. Extension and Training
Rabanal (1995) reviewed the aquaculture extension services of the Philippines and traced its evolution. From a national service under BFAR, the extension aquaculture technology became a function of “generalists” agricultural technicians or ATs under DA whose academic background may not be in fisheries as a result of a WB-IBRD Structural Loan Agreement. With the passage of the Local Government Code, these ATs were devolved to the local government.
Realizing the specialized nature of aquaculture and fisheries, BFAR is including extension and training services as part of the activities of the eight BFAR Technology Centers and one marine vessel, the M/V Maya-Maya. Of the eight technology centers only one is not equipped for aquaculture activities. All the rest are either exclusively for aquaculture or has capability for aquaculture technology verification and demonstration as well as for tilapia and/or carp fingerling dispersal.
These technology centers conduct farm visits and provide technical assistance to fish farmers within their vicinity. Most also hold a weekly training seminar for fish farmers. Since these technology centers are spread far apart, the greater part of the Philippines are dependent on the municipal level extension service. Whether or not aquaculture extension service is available or how well this is delivered to the end users will greatly depend on the level of support to aquaculture and fisheries and the importance given to the industry by the municipal government. With perhaps a few exceptions, most municipalities, even those where aquaculture is a relatively important industry, actually do not have such capability.
SEAFDEC AQD has a regular training program for various aquaculture technologies that are open to both government and private technicians. In addition it also responds to specific requests from government agencies to conduct specialized training. It has conducted training for fishery school teachers under TESDA as well as for former combatants of the Moro National Liberation Front in Mindanao under an FAO program.
Under AFMA agriculture and fisheries extension service has been defined to cover training, farm or business advisory, demonstration and information and communication support services. The said law requires that extension delivery be multi-disciplinary and should involve the participation of farmers, fisherfolk and their organizations. As mentioned in the previous section a National Extension System in Agriculture and Fisheries (NESAF) has been formed by virtue of AFMA.
The NESAF shall have three subsystems: national government, local government and private sector. The role of the national government (including the state universities and colleges) is to improve the effectiveness and efficiency of the LGUs through capability building and complementary extension activities. The complementary activities include technical assistance, training of LGU extension personnel, improvement of physical facilities, extension cum research, and information support services. The LGUs shall be responsible for delivering direct agriculture and fisheries extension services. NGOs and POs and other private entities particularly those with strong capabilities and track record especially in community organizing, participatory approaches, popularization of training materials, regenerative agricultural technologies, a gribusiness, marketing and management, shall be encouraged to participate.
7.2.4. Credit Sources
a. Informal
Most Filipinos rely on non-institutional lenders for their immediate cash requirements, whether for business or emergency personal needs. The term “five-six” is already part of the Filipino vocabulary in practically all parts of the country. It means paying six pesos for every five pesos borrowed. The term is normally for one month. It is equivalent to paying a 20% interest in one month. But because there are no long forms to fill up, practically no questions asked as to the purpose of the loan, no lengthy loan evaluation and is almost instantaneous, such usurious practice continues to fill a need.
The preference for informal sources of credit was evident in a survey of credit practices of small-scale fishermen in Panay, Philippines by Samonte and Ortega (1992). Of the 350 fishemen surveyed, 83% or 290 were found to have borrowed money at one time or another. Of the 290 borrowers, 97.6% relied on informal sources and only 2.4% from banks. The most common source of fund were relatives (32.0%) and friends (35.2%) as shown in Table 27. In selecting the credit source, the fishermen considered accessibility the most important factor influencing their choice as shown in Table 28.
In the aquaculture industry growers may get credit from traders. Many seaweed farmers are financed by buyers or by exporters who then get exclusive rights over the produce. Similarly tilapia cage farmers may be extended 30 to 90 day-credit for feeds by feed suppliers depending upon the economic climate.
b. Formal
Since 1987, the Agricultural Credit Policy Council (ACPC) is the institution mandated “to study, formulate, and help enact policies to improve credit flows to the agricultural sector.” It is an inter-agency cabinet level body with the Secretary of the Department of Agriculture as Chairman, the Central Bank Governor as Vice-Chairman and the Secretaries of the Department of Budget and Management, Department of Finance and the National Economic Development Authority as members. In 1992 under Republic Act 7607, the Magna Carta of Small Farmers, the ACPC was vested with the role of administering the Comprehensive Agricultural Loan Fund (CALF) and with promoting innovative schemes for the agricultural sector.
The 1998 Fisheries Code explicitly provides funds for fisheries and aquaculture development. Five different funds are mentioned, Municipal Fisheries Grant Fund (PHP100 million), Fishery Loan and Guarantee Fund (PHP100 million), Fishing Vessels Development Fund (PHP250 million), Special Fisheries Science and Approfishtech Fund (PHP100 million) and the Aquaculture Investment Fund (PHP50 million). The last one is intended for soft loans to municipal fisherfolks and their organization who will engage in aquaculture and for the development of underdeveloped or underutilized inland fishponds. The funds are to be sourced from the national budget. The guidelines for their implementation are still under preparation.
The AFMA also mandates that an agriculture, fisheries and agrarian reform credit and financing system be designed for the use and benefit of farmers, fisherfolk, and their organizations among other beneficiaries. The law provides for the establishment of the Agro-Industry Modernization Credit and Financing Program (AMCFP). The ACPC has acccordingly reviewed all existing policies and drawn up the implementing guidelines of AMCFP, which is hoped to be launched within 1999. The AMCFP is envisioned to pave the way for the “development of a multi-track, multi-commodity, sector neutral and basically market-driven scheme to supplant all existing Directed Credit Programs (DCPs).” (Kraft, 1999).
Under the AMCFP all DCPs are to be phased out by year 2002; lending decisions and/or credit delivery will be limited only to banks and viable cooperatives and NGOs and lending rates will be market-determined to enable the conduits to cover their costs and achieve self-sustainability. As program/fund owner the Department of Agriculture will focus on the monitoring and evaluation of the AMCFP and the provision of infrastructure, institution building, research and extension, policy development, advocacy and other support services whose ultimate effect is to make smallholders in agriculture and fisheries bankable and access to credit feasible and sustainable.
During the four-year grace period for the phasing out of all DCPs, the DA shall still implement all existing DCPs.. There are three government agricultural/fisheries credit programs that are being implemented nationwide of which a third program still in the final stages of re-formulation. The two on-going programs are the Integrated Rural Financing Program (IRF) and the Integrated Livelihood Program for Fisherfolk (ILPF). The third credit program is the Gintong Ani for Local Government Units (GA-LGU) but which has apparently been replaced by the recently launched Agrikulturang MAKAMASA of which MAKAMASA-Fisheries is the fisheries component. MAKAMASA-Fisheries is directed towards two goals: income diversification among marginal coastal fisherfolk and intensification of aquaculture productivity.
The IRF is a program of the Department of Agriculture for financing agriculture and fisheries projects that was launched in 1989 with the fund administration and management of the Program handled by the Land Bank of the Philippines (LBP). The program has two distinct features: rediscounting (or lending) and institutional development. In rediscounting the LBP channels the program funds through accredited rural financing institutions (RFI), e.g. rural banks, in the form of rediscount funds. Institutional development on the other hand is aimed at giving accredited RFIs hands-on experience in organizing, developing and strengthening of small farmers/fisherfolk groups, associations and cooperatives and in so doing develop their competence and confidence in extending financial assistance to such groups (Kraft, 1998).
The ILPF was launched by the Department of Agriculture in 1997 to improve the living conditions of the small-scale fisherfolk by increasing their income through the provision of alternative livelihood projects (BFAR, 1997). It is a credit program funded by the Department of Agriculture’s Credit Fund to the amount of PHP25 million and managed by the government’s Quedan and Rural Credit Guarantee Corporation (QUEDANCOR). Aquaculture projects identified for financing include spirulina growing; cage culture of milkfish; grouper culture; crab fattening; aquarium fish culture; and Gracilaria farming.
In addition to the Philippine-wide credit programs, there are also three other agriculture and fisheries financing programs that are available only to specific areas. These are the Catanduanes Agricultural Program and the Aurora Integrated Area Development Project which are specific to the provinces of Catanduanes and Aurora, both of which are economically depressed provinces. The third is the ADB-funded Fisheries Sector Program which used to be limited to11 Priority Bay Areas but is now being expanded to 18 Priority Bay Areas covering 100 municipalities and is being renamed Fisheries Resource Management Project (FRMP). All of these include financing for aquaculture and other livelihood projects.
There are government credit programs for small and medium enterprises in general which in theory can be availed of for agricultural and fisheries ventures. These include the Pangkabuhayan ng Bayan of the Philippine National Bank, the Livelihood Financing Program of the Social Security System and the Promotion for Rural Employment through Self-Employment Enterpreneurship Development (PRESEED) of the Department of Labor and Employment; and the lending program of the Technology and Livelihood Resource Center. These programs are not exclusively for the rural areas.
One noteworthy credit source for small, cottage and micro-enterprise in the countryside is managed by an NGO. This is the Small and Medium Enterprise Credit (SMEC) of the Philippine Business for Social Progress (PBSP). This started with a USD12 million of revolving credit fund provided by the USAID to the Philippine Government which in turn gave the fund to the PBSP to manage. Later, PHP118.5 million was added by the Bankers’ Association of the Philippines and DM 14.75 million from the Kreditanstalt fur Wiederaufbau (KfW), the German Development Bank through a tripartite agreement with the Philippine Government. By 1996 the SMEC is reported to have lent out PHP1.36 billion to small and medium businesses and created 20,000 new jobs in the countryside. The PBSP has several mariculture projects being piloted in the province of Samar. This credit facility is expected to be also available to qualified “sea-farmers” once these technologies are verified to be technically and financially viable.
Philippine banks are mandated by law (Presidential Decree 717) to set aside 25 per cent of their loanable funds for lending to agriculture and fisheries projects. According to Kraft (1998), between 1992 to 1997, agricultural loans granted averaged PHP 62,400.7 million each year of which 14.3% or PHP8,904.5 million are loans granted to fisheries. Production loans for fisheries have nominally been growing at an average of 9% per annum as against 6% for total agricultural production credit, (Table 30).
According to Bellena (1998) “ the banking system has a total of PHP714 billion available for lending, PHP500 billion of which are in the hands of the big commercial banks. If the commercial banks truly comply with the law, they should have plowed PHP125 billion into agricultural lending. This should have been more than enough to saturate the borrowing needs of the whole farming sector, estimated at PHP100 billion a year.” Unfortunately the compliance rate is only 21% for commercial banks and 8% for thrift banks. Even the 21% compliance rate is illusory at most because loans given out to large food processing companies and agribusiness enterprises are considered part of the agricultural loan portfolio. Official records indicate that those following the law to the letter are the rural banks, both privately owned and those owned by cooperatives, and two government banks - the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).
c. Micro-finance Institutions
NGOs involved in microfinance in the Philippines have formed a Coalition for Microfinance Standards. According to the said coalition, micro-finance is basically financial intermediation for the small borrower/saver segment. The word, although newly coined, is used to describe what has been in existence since economies started monetizing. The term also implies the application of market-based concepts such as charging market-based or cost recovery rates. In this sense, pawnshops and lending investors can be considered or are also microfinance institutions or microfinance service providers.” (CMS, 1997).
There are many NGOs providing some form of micro-financing or micro-credit in the Philippines. However estimates coming from CODE-NGO, a network of NGOs, show that out of 500 developmental NGOs in the country doing micro-credit, only about 50 are pursuing micro-lending on a commercially viable basis (Rebong 1997). Some of these NGOs which are active in micro-financing are APPEND (Association of Philippine Partners in Enterprise Development), Center for Agriculture and Rural Development (CARD), and the Visayas-based Taytay Sa Kauswagan, Inc.
