LANDBANKREADIESP4.3-B FACILITY FORLGUS
As small-scale farmers continue to incur losses due to the declining prices of palay, state-owned agricultural lender Landbank of the Philippines said it would make available P4.3 billion in loans for local government units (LGUS) that would assist the industry.
In a statement, Landbank said that under its Palay Alay sa Magsasaka ng Lalawigan or Palay ng Lalawigan program, it has already approved loans to six LGUS that would purchase the staple from palay-producing provinces.
Aside from purchasing palay, the loan may also be used to buy farm machinery and post-harvest facilities as well as finance other activities related to the rice value chain.
As of Sept. 23, Landbank has approved loans for the provincial governments of Nueva Ecija, Isabela, Tarlac, and Camarines Sur, and for the municipal governments of Alicia in Isabela and Cabanatuan City in Nueva Ecija.
The fund facility—launched in October last year—was created to supplement the call made by the Department of Agriculture to LGUS to buy palay from local farmers to prop up prices.
Landbank added that given the seasonality of palay planting, some farmers were forced to sell their produce to unscrupulous traders who offered very low prices. LGUS that would open their doors to local produce would give these farmers an alternative market.
“We are encouraging LGUS to avail themselves 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 and CEO Cecilia Borromeo said.
The loanable amount for eligible LGUS shall not be more than their net borrowing capacity as per the Bureau of Local Government Finance’s computation and would be based on the requirement of their respective projects.
Short-term loan and permanent working capital under the program also bears a fixed interest rate of 2 percent annually until December 2022. As for term loans, these carry an annual interest rate of 4 percent and are subject to re-pricing afterward.
To recall, top rice-producing provinces were able to procure P30 billion-worth of palay last year. Agriculture spokesperson Noel Reyes said they were expecting the same amount to be committed by the LGUS this year.
Other agencies like the National Food Authority and the Department of Social Welfare and Development also vowed to help local palay farmers in their own capacities.