Carlos G. Dominguez
Secretary of Finance
November 4, 2020
Ms. Elizabeth Timbol, President of the Rural Bankers Association of the Philippines; officers and members of this association; good afternoon.
Thank you for inviting me to join you today. I congratulate the Rural Bankers Association of the Philippines on its 63rd Anniversary.
I must commend the work of our rural bankers during this difficult period.
Our economy, along with the rest of the world, slid into an economic downturn. This is mainly due to the necessary measures we enforced to save lives and protect our communities from COVID-19. With the proper mix of fiscal and monetary policies, we hope to return to the path of high growth at the soonest possible time.
Remarkably, our agriculture sector posted growth in the second quarter of this year when the rest of the economy contracted due to the contagion. This is not accidental.
Over the past four years, we introduced game-changing reforms that boosted productivity and enhanced our agriculture sector’s resiliency. We have focused on modernizing our farm systems and improving logistical support for our farmers.
The Rice Tariffication Law enabled us to establish a fund that will improve our farms’ efficiency and encourage agriculture-related manufacturing to flourish.
As part of our recovery strategy, we seek to hasten the modernization of Philippine agriculture. This will enhance the food and nutrition security of our people. It will boost rural incomes. It will provide a strong base for the other sections of our economy to be reenergized.
Our rural banks will play a key role in this strategy. We need to invest in our farm and logistical systems as quickly as possible. Demand for food is inelastic. By building a modern agriculture, we can expand market access for food producers while keeping food supply available and prices affordable.
All these will require financing support that our rural bankers are best poised to deliver. I ask our rural bankers to play a proactive role in this area.
Having presided over the rural banking sector’s rehabilitation in the past, I know that this sector is capable of remarkable turnarounds.
We have set in place policies that will support the revival of businesses and encourage more investments in the agriculture sector.
Under Bayanihan Two, we have increased the capitalization of our government financial institutions. This increased lending capacity will enable our government banks to serve as wholesale banks and rediscounting agents for small and medium-sized banks and microfinance institutions. I trust our rural banks will make the best use of these credit facilities.
Our rural banks’ continued strength will be critical in our economic recovery. President Rodrigo Duterte has already certified the FIST bill or Financial Institutions Strategic Transfer Act as an urgent measure. This will allow banks to dispose of non-performing loans and assets through asset management companies. FIST will enable banks to offload souring loans and assets, clean up their balance sheets, and extend more credit to more sectors in need.
With a robust rural banking system, we can transform Philippine agriculture into a dynamic, high-growth sector. Together, we can build a stronger, more resilient, and inclusive national economy.
Thank you.
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