LOANS extended by the Land Bank of the Philippines to the agriculture sector as of June reached P177.32 billion, accounting for the lion’s share of the bank’s total loan portfolio of nearly P800 billion during the period, a bank official said, a claim validated by the Department of Finance.
LandBank President and CEO Cecilia C. Borromeo said the farm sector accounted for 22.17 percent of the bank’s total loan portfolio of P799.64 billion.
“This is our report [to the President] and we will also include that we will further increase our exposure [to the agriculture sector],” Borromeo told reporters in an interview on Tuesday.
She said the increase in LandBank’s exposure to the farm sector is included in the plan that will be presented to the President before the end of this month.
Borromeo made the statement after the President, during his fourth State of the Nation Address on Monday, threatened to abolish LandBank if it cannot present a plan to “reconfigure” its operations so it could better serve farmers and fishermen by the end of July.
Finance Secretary Carlos G. Dominguez III said LandBank is the only bank that has set aside the largest proportion of its loan portfolio to the agriculture sector. LandBank is a government-owned and -controlled corporation (GOCC) attached to the Department of Finance.
“Compared with other banks of any size, [LandBank] has the largest proportion of loans to the agriculture sector,” Dominguez said.
“[LandBank] is the fourth-largest bank. Its size is due to the fact that it is the main depository of the government. It performs a lot of functions,” he added.
Dominguez noted that the bank is the distributor of funds to beneficiaries under the Pantawid Pamilyang Pilipino Program and the Pantawid Pasada Program.
Loans to agriculture
The LandBank’s loans to the agriculture and fisheries sector as of June were 16.82 percent higher than the P151.78 billion recorded in the same month last year.
Of the amount, loans extended to agribusiness accounted for the lion’s share at P119.52 billion; aqua-business, P2.59 billion; and agri-aqua related projects of local government units (LGUs) and GOCCs, P55.21 billion.
“We also support other national government priority programs including the expansion of loans to MSMEs [micro, small and medium enterprises] and we have a total of P94.3 billion, probably the highest in the banking industry,” she said.
Data from the bank showed that P42.31 billion went to its mandated sector as of June, 5.8 percent higher than last year’s P39.96 billion.
Broken down, small farmers including agrarian reform beneficiaries (ARBs) and their associations were provided P42.17 billion, while small fishers and their associations were allocated P140 million. Aside from supporting the agriculture sector, the LandBank said it also funds the priority programs and sectors of the national government. Loans to this subsector reached P524.86 billion, 13.27 percent higher than the P463.35 billion recorded in June 2018.
Under the subsector, the support for MSMEs amounted to P94.30 billion; communication, P49.11 billion; transportation, P53.45 billion; housing, P60.82 billion; education, P9.70 billion; health care, P22.75 billion; environment-related projects, P11.47 billion; tourism, P23.49 billion; utilities, P135.10 billion; livelihood loans, P25.94 billion; and other programs including public-private partnership projects, P36.73 billion.
“So that’s P524.86 billion in total outside of the mandated sector. [Together with] the mandated sector, [loans] amount to almost P744.5 billion, [or] 93 percent of our loan portfolio,” she said.