Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that banks met their mandated lending quota for the agriculture sector, disbursing more than P3 trillion in loans as of June.

As of end-June, banks had lent P3.109 trillion to the agriculture industry, equivalent to 89.76% of the banking sector's P3.464-trillion loanable funds for the period. The result placed overall lending to the agriculture sector above the BSP's quota for agriculture, fisheries and rural development (AFRD) financing. The quota is the government's main mechanism for steering formal bank credit to a sector that accounts for roughly a quarter of Philippine employment, where limited access to financing among farmers and fisherfolk has long been a policy concern.

The mandate, known as the Agri-Agra requirement, traces to Republic Act 10000 of 2009 and was expanded by Republic Act 11901, the Agriculture, Fisheries and Rural Development Financing Act of 2022, which broadened the activities that qualify toward compliance to include agro-processing and rural infrastructure. Under the law, banks are required to allocate at least 25% of their total loanable funds for AFRD financing, which includes loans for agrarian reform beneficiaries, agrarian reform communities and other priority sectors, until July 2032. 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 29.23% from P2.406 trillion. It was also 8.29% higher than the P2.871 trillion granted in the first quarter. The BSP publishes the AFRD figures quarterly, making the coming releases the next checkpoint for how much mandated financing reaches the farm sector in the second half.

Loans made up the bulk of the financing at P3.07 trillion, rising 29.1% from the P2.378 trillion recorded in the same period a year ago and gaining 8.17% quarter on quarter from P2.838 trillion previously.

Banks' investments in the local agriculture sector soared 54.13% to P35.62 billion from P23.11 billion the previous year, and jumped by nearly 21% from P29.44 billion in the first quarter. Broken down, P25.86 billion took the form of debt securities, while P9.76 billion were equity securities.

BSP data also showed that lenders held 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 had amounted to P3.48 billion at end-March, which 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 share at P2.851 trillion, holding P2.901 trillion in total loanable funds. Big banks' agricultural loans grew 30.63% year on year from P2.183 trillion.

Meanwhile, thrift banks' lending for agriculture rose 25.58% to P147.16 billion from P117.18 billion last year. Their total loanable funds amounted to P283.33 billion in the second quarter.

Rural and cooperative banks extended 4.26% more loans to the agriculture sector, valued at P110.49 billion from P105.98 billion in 2025, while holding P166.38 billion in total loanable funds.

Digital banks, a license category the BSP introduced only in 2020, did not lend out P112.94 billion of their total loanable funds during the period.

— Katherine K. Chan