Trade Arrangements and Interlinked Credit in the Philippines

Abstract

This chapter describes credit relations in the production and marketing of vegetables in the central Philippines, taking into account their diversity and contexts. It provides insights into the interdependency of lenders and borrowers, the interweaving of trade and credit transactions, and the cultural and economic backgrounds of the combined strategy of spreading of risks and profit-seeking. In the vegetable trade, it is difficult to generalize on the content of suki relationships. Large traders use the bonds to stabilize their business through interlinked transactions with farmers and commission agents. The production and distribution of perishable vegetables involve specific risks and costs. In case a farmer and a trader have an equal economic status, a long-lasting relationship can be established with equal benefits to both; the same applies to buying and selling traders. Besides buying and selling through sukis, transactions without sukis occur at all levels in the market chain and mostly on a cash basis.