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A 1997 survey conducted by the National Credit Council (NCC) and the Credit Policy Improvement Program (CPIP) revealed that there were 86 on-going directed credit programs (DCPs) implemented by several government entities in various sectors of the economy, almost half of which (38 DCPs) were in the agriculture sector 3 . Government Non-Financial Institutions (GNFIs) and Government-Owned and Controlled Corporations (GOCCs) implemented 55 programs while Government Financial Institutions (GFIs) handled 31 programs. The Departments of Agriculture and Agrarian Reform handled 20 directed credit programs, which directly targeted the agriculture sector. Figure 1 portrays the 86 directed credit programs in terms of who funds, who owns them, how they are implemented, and what sector they target. The figure shows the complex structure of DCP implementation that made it difficult to trace the flow of funds from source to end-user. The modalities used in implementing DCPs resulted in large amounts of resource leakages that mainly flowed from weak accountability, poor repayment rates and hidden subsidies. DCPs source their funds from budgetary allocations and donor loans and grants. Survey results showed that initial fund allocations for 63 4 of the 86 directed credit programs reported amounted to almost P40.5 billion ($764 million at P53 per $). This is equivalent to almost 2 percent of the gross domestic product (GDP) of the Philippines in 1996. About 40 percent of these programs (34 programs) are targeted towards the agricultural sector. Despite the amount of resources earmarked for the implementation of DCPs, most of the programs were reported to have very
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