LAND BANK of the Philippines (LANDBANK) is set to submit a report to Malacañang on its programs supporting the agriculture industry, after President Rodrigo R. Duterte threatened to abolish the bank for supposedly neglecting its mandate.
In a statement on Wednesday, the largest state-owned lender said it will “comply” with Mr. Duterte’s instruction relayed during his fourth State of the Nation Address (SONA) on Monday.
“We shall be submitting the report detailing our plans and programs to further achieve our objective, before the end of the month,” LANDBANK said.
Mr. Duterte criticized LANDBANK for being “mired with so many commercial transactions,” saying it is mandated to finance agricultural projects and endeavors.
“Bumalik kayo (Go back to) where you were created for, and that is to the farmers…. You better decide on that. I will give you until the end of July to give me a plan. Or else, I will ask Congress to reconfigure you…” Mr. Duterte said on Monday.
LANDBANK said it remains committed to pursue its mandate of “helping our small farmers and fishers, and the agricultural sector at large.”
It added that it will also strengthen partnerships with cooperatives, farmer groups and associations, and its collaborations with other government agencies.
In a press conference on Tuesday, Finance Secretary Carlos G. Dominguez said about a fifth of LANDBANK’s total lending book goes to the agriculture sector.
“As of now, their total loan portfolio is around P800 billion… A little over 20% is in the (agriculture) sector which is P177 billion,” said Mr. Dominguez, who is also LANDBANK’s ex-officio chairman.
Data provided to reporters showed LANDBANK’s exposure to agriculture and fisheries sectors amounted to P177.32 billion as of end-June, 22.17% of the lender’s total loan portfolio of P799.64 billion — 16.8% higher than P151.78 billion recorded as of June 2018.
This is on top of the P42.31 billion lent to the “mandated” sector, which includes small farmers including agrarian reform beneficiaries and their associations (P42.17 billion) as well as small fishers and their associations (P140 million).
“We are the only bank who is compliant with the Agri-Agra law requirement,” LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said. “We also lend to the local government units to enable them to build roads and bridges to connect the farms and market and have facilities for the mitigation of calamities.”
Republic Act 10000 or the Agri-Agra Reform Credit Act mandates banks to allot at least 10% of its total loanable funds to agrarian reform beneficiaries and 15% for farmers and fisherfolk.
As of end-March, banks only extended P711 billion loans to the agriculture sector, just 57.33% of the P1.24 trillion they should have lent out to beneficiaries, latest central bank data showed.
Ms. Borromeo added that apart from the agriculture sector, LANDBANK also extends loans to other government priority programs such as those for micro, small and medium enterprises, telecommunications, transportation and low-cost housing among others.
“So P524.86 billion in total outside the mandated sector. So we have the mandated sector its almost P744.5 billion. That’s 93% of our loan portfolio,” the chief executive added. — Karl Angelo N. Vidal