Beyond subsidies: Financial inclusion and food security
Published Sep 22, 2025 12:05 am
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Updated Sep 21, 2025 03:56 pm
FROM THE MARGINS
Rising food prices and climate shocks reveal that hunger is not just about food—it is about financial tools that help families prepare and recover.
For decades, food security in the Philippines has been addressed largely through subsidies, relief distributions, or emergency interventions. These remain vital, especially when rice prices spike, typhoons devastate farms, or families go hungry. Yet, recent government programs show a growing recognition that financial inclusion plays a role in achieving food security.
Why financial inclusion matters
According to the Philippine Statistics Authority, food inflation at the national level rose by 0.6 percent in August 2025, driven by increased costs of fish, meat and vegetables. For low-income households, even small hikes in food costs can erode purchasing power quickly, forcing choices among nutrition, health, education, or savings.
Households without access to credit, savings, or insurance are the first to suffer. With few buffers and limited access to finance, they are pushed into selling assets, skimping on meals, or withdrawing from income-generating activities —eroding resilience.
In contrast, financial inclusion enables families to borrow for farm inputs even when prices are high; maintain savings for lean periods; access insurance to manage shocks; and use digital financial services for subsidies, payments, or business transactions.
Hunger and poverty are not just about the absence of food, but of reliable income and buffers against shocks. Linking food security programs with financial tools allows households to move beyond short-term coping and into long-term planning.
Strength in struggles
Catalina and Ariston Laurel, a couple from Batanes, embody the challenges and possibilities of this link. Farming root crops and vegetables while also fishing for dorado, they faced constant disruption from storms and unpredictable weather. To supplement their income, Ariston sometimes took construction jobs.
Their turning point came in 2018 when they joined a microfinance program. Catalina borrowed to buy seeds and cover school expenses, while Ariston used his loan to repair his motorboat. When he later suffered an accident, the institution also provided financial assistance.
For the Laurels, credit was more than money -- it was security, allowing them to keep farming, fishing, and dreaming of one day building their own home. Their story illustrates how financial services are essential to food security in remote and climate-vulnerable areas.
Sowing success
In General Santos City, Niño de Guzman’s journey shows what happens when financial inclusion and entrepreneurship intersect with food production. A vocational graduate and father, Niño started with a sari-sari store and small farming ventures.
With access to microfinance loans — eventually growing from P3,000 to P350,000 — he grew a thriving agribusiness producing asparagus, corn, and other crops. Today, his farm not only supports his family but employs 15 workers and supplies markets as far as Metro Manila.
Niño’s discipline and resilience sustain his business, but what makes his story powerful is its ripple effect: he buys seeds from small producers and hires local workers, spreading opportunity within his community.
A shift in mindset
These stories highlight a crucial lesson: food security and financial inclusion are inseparable. For low-income households, access to financial and non-financial interventions can mean the difference between hunger and progress.
Across the country, current initiatives from both the Department of Agriculture and the Department of Social Welfare and Development aim to address food security more systematically -- through distribution of inputs, nutrition programs, social protection, and livelihood support. Increasingly, these efforts are complemented by financial literacy training, digital payment systems for subsidies and insurance, and partnerships with microfinance institutions and community-based groups.
This signals a broader recognition that financial tools can amplify the impact of food security programs. When subsidies arrive through digital wallets, they encourage families to use formal financial systems. When livelihood support comes with savings and credit components, households are better able to invest and grow.
Food security is no longer seen purely as an agricultural issue but as a socio-economic challenge requiring integrated, sustainable solutions.
From relief to resilience
Food inflation shows how fragile households’ food security remains. When prices spike, the poor are often forced to cut back on meals or pull children out of school to save money. Without financial buffers, they remain trapped in survival mode.
But resilience is possible. Catalina and Ariston show how small loans and safety nets can steady families through storms, while Niño demonstrates how financial tools can fuel growth and create jobs. Pairing financial inclusion with food security is not about replacing subsidies altogether -- emergency aid will always have its place. But we must ensure that aid evolves into opportunity, and that opportunity grows into lasting security.
As the Philippines confronts rising food costs, climate risks, and persistent poverty, the challenge is clear: subsidies alone cannot solve hunger. What is needed is a sustained commitment to financial inclusion – helping families not just to eat today but to thrive tomorrow.
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Nourishing the world starts with cultivating empathy. — restaurantmode.com
(Dr. Jaime Aristotle B. Alip is a poverty eradication advocate. He is the founder of the Center for Agriculture and Rural Development Mutually-Reinforcing Institutions (CARD MRI), a group of 23 organizations that provide social development services to eight million economically-disadvantaged Filipinos and insure more than 27 million nationwide.)