Carabao Milk

PCCI pushes increased carabao milk production
Ronnel W. Domingo
Inquirer News Service

THE COUNTRY'S biggest business group is pushing for the increased production of carabao milk to help reduce the country's dependence on imported dairy products.

Donald G. Dee, president of the Philippine Chamber of Commerce and Industry, said the group was looking at successful milk production campaigns in India, Pakistan and China that can be replicated in the country.

"The continued rise of our import bill against export earnings is expected considering the minimal resources government has in promoting export businesses," Dee said.

"We must increase our exports to or step up production of items that take up significant parts of imports such as dairy products," he said.

The PCCI chief said some P497 million worth of milk was shipped in from abroad in 2004.

Government data show that in the past decade, imports of fresh milk was growing at a rate of 28 percent a year while domestic production was generally declining, although there was growth of up to 6 percent yearly in certain years.

Dee said the private sector was also pushing for the establishment of a body that would facilitate lending to small and medium businesses by maximizing a lending fund that has grown to P5.5 billion.

He said the government has shown that there were ample supply of funds for small businesses but that the problem was how to make it easy for entrepreneurs to secure loans.

Dee said efforts were under way to put up a Micro, Small and Medium Enterprises Surety Fund with an initial P1 billion from the World Bank's Industrial Guarantee and Loan Fund.

He said the government, through the IGLF, could work with a public sector-initiated SME Development Center, which would manage the P1-billion MSME Surety Fund.

"The objective is to increase availability and effectiveness of risk capital to SMEs," he said. "The fund will provide guarantee for SMEs with little or no collateral but have strong cash flows."

According to the Institute for Development and Econometric Analysis Inc., an Asian Development Bank study made in 2003 showed that the biggest constraint in existing lending programs for SMEs was that loan decisions depended on collateral such as land.

Cayetano Paderanga, who heads IDEA Inc., added that other past studies suggest that SMEs could not avail of available funds because loan requirements were too difficult to comply with.

"With the MSME Surety Fund, we can make it easy for prospective milk producers to secure loans for buying carabaos that are bred to yield more milk than the average cattle," Dee said.