STATE-RUN Land Bank of the Philippines (LANDBANK) has set up another lending program worth P10 billion for local government units (LGUs) for development projects and recovery efforts amid the coronavirus pandemic.
LANDBANK said in a statement that all provincial, city and municipal LGUs can avail of the program meant to help them become self-sufficient.
The loanable amount will depend on LGUs’ project requirements and will carry a fixed interest rate of 4.5% per annum for the first year subject to an annual repricing after.
The loan amount plus the total loan exposure of the local government should not exceed its net borrowing capacity set by the Bureau of Local Government Finance, LANDBANK said.
“The ongoing public health crisis caused by the COVID-19 (coronavirus disease 2019) pandemic has highlighted the vital role of LGUs in managing the effects of unforeseen catastrophes. We hope that the…program will help them better serve their constituents and communities, while developing a stronger local economy that can withstand future crises,” LANDBANK President and CEO Cecilia C. Borromeo was quoted as saying.
The LGUs can use the borrowed funds to buy agricultural produce, equipment, and construct facilities that will help link their products to markets. These include the rehabilitation of market infrastructure, establishment of a “mobile palengke,” collection and buying stations, and other related facilities.
The loan can also fund programs and projects that support public services, social welfare, health care and other infrastructure projects to stimulate economic activity in their LGUs.
LANDBANK said the program also includes credit for permanent working capital with a three-year tenor and a term loan that can be paid within 10 years. The two credit facilities have a grace period on principal payments of up to one year.
The bank in April introduced a P10-billion loan program for LGUs with a fixed-rate of five percent per annum and payable in up to five years.
LANDBANK posted a P18.51 billion in net income in 2019, up 29% from P15.48 billion in 2018. — BML