Landbank OKs P62-B lending program for LGUs

State-run Land Bank of the Philippines has set aside P62.32 billion for lending to local government units (LGUs) to help their economies recover from the impact of the pandemic.

These loans were cleared for 194 LGUs under its Restoration and Invigoration package for a Self-Sufficient Economy towards UPgrowth for LGUs Lending Program (RISE-UP LGUs).

Out of this amount, P1.89 billion has been released to 32 LGUs as of Feb. 2.

The program was launched in July 2020 in partnership with the Union of Local Authorities of the Philippines and the leagues of LGUs, namely the League of Provinces of the Philippines, League of Cities of the Philippines and League of Municipalities of the Philippines.

Landbank has since then increased its fund allocation from the initial P10 billion to P80 billion to accommodate the rising number of loan applications.

Under the lending facility, Landbank finances COVID-19 response and recovery interventions, including but not limited to the purchase of agricultural produce, acquisition of equipment and construction of facilities for linking of products to the market, and other programs and projects of the LGU that provide basic and support services, social welfare, health care and other infrastructure activities.

“Landbank recognizes the crucial role of LGUs in the approach to recover from the economic downturn caused by the pandemic. We are fully committed to finance local development projects toward generating jobs and jumpstarting the local economy,” said Landbank president and CEO Cecilia Borromeo.

The bank is also urging LGUs to apply for interest rate subsidy as provided for under the Bayanihan to Recover as One Act.

The law provides for a P1 billion interest rate subsidy fund for LGU loans obtained from Landbank.

The interest subsidy is subject to a maximum limit of two percent per annum of the approved loan amount or P10 million per province and city, and P5 million per municipality, whichever is lower.