LAND BANK of the Philippines (LANDBANK) said it approved P4.3 billion worth of loans to local government units (LGUs) to procure palay, or unmilled rice, directly from farmers, one of the government’s measures to prop up weak farmgate prices.

In a statement, LANBDANK said it approved credit assistance to six LGUs under its “PALAY ng Lalawigan” lending program: Nueva Ecija, Isabela, Tarlac, and Camarines Sur province, the city of Cabanatuan, and the municipality of Alicia, Isabela.

“We are encouraging our LGUs to avail of the LANDBANK PALAY ng Lalawigan Lending Program to bankroll their direct engagement in the local rice industry value chain. It will be a big help to our local farmers whose incomes may have been affected, in one way or another, by the fluctuating farmgate prices of palay,” LANDBANK President Cecilia C. Borromeo said.

LANDBANK said the facility is available to municipal, city, and provincial governments in rice-producing provinces.

“Rather than sell to unscrupulous rice traders who offer very low prices, farmers can now sell their produce to the LGUs,” LANDBANK said.

Eligible LGUs may also use the loans to procure farm machinery and post-harvest facilities or fund other rice-related activities. 

LANDBANK said the program’s short-term loan and permanent working capital offerings charge fixed interest of 2% per annum and are available until the end of 2022.

The term loan offering will charge 4%, subject to re-pricing.

Qualified LGUs may not exceed their Net Borrowing Capacity as set by the Bureau of Local Government Finance. — Revin Mikhael D. Ochave