Monday, June 04, 2007 DBP opens credit window for tuna industry players
THE Development Bank of the Philippines has opened a multi-million peso credit window for tuna industry players in their project to replace fishing nets with larger mesh sizes in compliance with international fishing rules.
DBP president Reynaldo G. David and Marfenio Y. Tan, president of the Socsksargen Federation of Fishing and Allied Industries Inc. (SFFAII), signed a memorandum of understanding (MOU) for the credit window.
Agriculture Secretary Arthur Yap has committed some P100 million to the net replacement project of the federation but industry sources said the amount was still unavailable as of last week.
The bank ought to provide a counterpart fund but despite the unavailability of the agriculture fund on Thursday, bank and tuna federation officials pushed through with the opening of the credit window.
The bank has been chosen as conduit for the agriculture department's P100 million pledge, which the federation members can avail at zero interest and no collateral.
Essentially under the MOU, the bank and the federation agreed that DBP shall finance the replacement of fishing nets with larger mesh sizes or the acquisition of nets by members of the federation in accordance with international fishing regulations.
David said the credit assistance to the federation members, on top of the P100 million pledged by the agriculture department, will be sourced from the bank's program for the fishing industry, which has an allocation of at least P2 billion. "It has a repayment term of up to 10 years inclusive of a two-year grace period," he added.
Tan said the federation has come up with a project to replace some fishing nets of its members to larger mesh sizes (three inches and above) in line with the requirements of the international tuna fishing organizations.
"We are pleased that the bank offered us a credit window for this project. This will be a big help to the tuna industry," he said adding the federation is committed to ensure the sustainability of the tuna industry through compliance with the rules set by international regulatory bodies.
Marietto Enecio, DBP senior vice president, said the minimum loanable account would be half a million pesos.
"The federation would endorse the companies who shall be granted access to the loan fund, subject for the evaluation of the bank, of course," he said.
Jerry Damalerio, president of the South Cotabato Purse Seiners Association, said at least 170 small tuna vessels under his group would be able to take advantage of the loan, which reportedly range between P15 to P20 million for each vessel.
Fishing nets used by a vessel runs into several million pesos even for second-hand ones.
The deal forged between DBP and the federation came with the help of the Growth with Equity in Mindanao (GEM), a development program funded by the United States Agency for International Development.
The federation is one of the several beneficiaries of the "Business Support Organization Development Program" of GEM.
SFFAII has membership base in the purse seine and hand line fishing groups, tuna canneries and processors, aquaculture growers, equipment suppliers and support services providers in South Cotabato, Sultan Kudarat, Sarangani and General Santos City.
By groups, the federation is composed of seven major fishing associations based in this city. These are the Southern Philippines Boat Owners and Tuna Association, South Cotabato Purse Seiners Association, Tuna Cooperative of General Santos City and Umbrella Fish Landing Association.
The federation also includes the Tuna Canners Association of the Philippines-General Santos chapter, Fresh Frozen Seafood Association of the Philippines, Incorporated and the Chamber of Aquaculture and Ancillary Industries of Sarangani, Incorporated.
This city accounts for the bulk of the tuna industry, which has an estimated value of $420 million. (BSS)
