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Rural Banks express concerns over El Nino and Climate Change

The Rural Bankers Association of The Philippines in cooperation with the British Embassy held a climate change forum that featured John Pearson, Head of the South East Asia Climate Change Network and Dr. Juzhong Zhuang, Assistant Chief Economist of the Asian Development Bank. Both warned that climate change if not addressed by the private sector would have an effect of a reduction in the Gross Domestic Product by at least 6.7%. Rural Bank Presidents & CEO’s where present to hear mitigating and adaptive measures that affected the rural economy which represents their core market. Also present was Commissioner Mary Ann Lucille Sering. Head of the newly organized Philippine Climate Change Commission and current DENR Undersecretary who presented eligible projects for carbon financing and how rural bankers can actively participate in the new green economy.

Dr. Gemma Narisma of the Manila Observatory for her part clearly showed examples of how the slight change in climate is affecting the Philippines in her presentation. Studies indicated that warming would occur and impact Mindanao and areas of Luzon where crop cycles would be affected by 2015. Mitigation measures and a larger interface with farmers need to be undertaken now to inform them of the effects of climate change. She indicated that the recent typhoons (Pepeng and Ondoy) were already samples of the effect of climate change.

Rural Banks in the Philippines have provided a total of 35.5 Billion pesos in loans for the Agri-Agra sector over the years. 50% of the total loan portfolio of rural banks is dedicated to this sector, hence the great concern shown for the ill effects of climate change on Philippine agricultural output.

Micro enterprise would also be affected by any change in the agricultural output as these are closely related to the support structure in the rural economy. Rural Banks over the years have been closely supportive of the development of SME’s in rural areas by providing over 8 Billion pesos in loans to over 800.000 micro-entrepreneurs. A decrease in GDP of 6.7% would have a devastating impact on the rural economy and to a much larger extent the national economy. So we really have to talk about solutions and mitigating measures brought by this current global problem said RBAP President Joseph Omar Andaya. Mr. Andaya also said that this is the first step to developing solutions in the respective areas where they operate.

El Nino has already struck several parts of the country causing a shortage of rainfall for both farmers and fishpen operators. Magat dam as an example, a source of irrigation for 85,000 hectares of farmland in Central Luzon and 360 megawatts of electricity for the Luzon grid is currently at its lowest point of 163 meters. The impact to both farmlands and small businesses in rural areas will be devastating.

The Philippines recently ratified the Climate Change Bill and was signed into law last October 2009 as Republic Act 9729.

by S. C.
02 march 2010, World News > Asia