Landbank loans for hog sector doubled
STATE-RUN Land Bank of the Philippines (Landbank) doubled the available loan window for distressed hog industry hit by the African Swine Fever (ASF) to P30 billion from P15 billion to finance hog repopulation and feed milling operations.
This came after Finance Secretary and Landbank Chairman Carlos G. Dominguez III ordered the state lender to double its support for hog raisers, feed millers, and other industry players dealing with supply shortfalls and retail price spirals of pork products.
“Landbank is doubling its funds available for financing swine repopulation, feed milling operations and facility upgrades in order to help address at the soonest the supply shortfalls and subsequent retail price spirals affecting both hog producers and pork consumers,” Dominguez said.
He added the steep rise in pork prices is partly responsible for the current elevated inflation amid the pandemic.
Under the Landbank SWINE (Special Window and Interim Support to Nurture Hog Enterprises) Lending Program, commercial hog raisers registered as cooperatives or farmers’ associations, small and medium enterprises, as well as large enterprises or corporations may borrow from the state-run bank.
The lending program, to be available until December 31, 2026 in support of the Department of Agriculture’s (DA) hog repopulation plan, was launched last month by Landbank in partnership with the agriculture department.
As of April 15, Landbank said it is already processing six loan applications for the SWINE Lending Program from the provinces of Tarlac, Cavite, Rizal, Bukidnon and South Cotabato, amounting to P2.96 billion combined.
Loans under this program shall be used for swine production, including the acquisition or importation of semen or breeding animals; feed milling operations; the construction, improvement or retrofitting of necessary facilities that are compliant to biosecurity protocols of DA, the industry or integrators; acquisition of fixed assets; and as working capital.
Eligible borrowers may access a short-term loan line or a term loan for up to 80 percent of their total project cost or financing requirement, with an affordable fixed interest rate of 3 percent per annum for three years, subject to annual repricing thereafter.
Short-term loans under the program have a tenor of one year; term loan for permanent working capital is payable up to five years; and fixed asset acquisition is payable based on the cash f low or payback period of the project, with a grace period on the principal and interest.
The DA will provide the list of eligible program borrowers and assist them in the preparation of a business plan, enrollment in the Philippine Crop Insurance Corp., and in securing necessary permits. It will also provide loan recipients trainings on biosecurity management and breeding or rearing of hogs, while engaging the services of different organizations in capability building and implementation of biosecurity protocols.
Landbank, meanwhile, will accept and evaluate loan applications of eligible borrowers and facilitate the release of loan proceeds. It will also monitor the performance of the Program and provide monthly reports to the DA.