The Land Bank of the Philippines is bankrolling a P3-billion loan facility for bus operators seeking capital to modernize their fleet.
In a statement, the state-owned bank said that initiative was under a lending program it christened “I-Rescue for Bus Transport,” which stands for “Interim Rehabilitation Support to Cushion Unfavorably-affected Enterprises by Covid-19 for Better Urban Services Transport.”
The loan facility is aimed at extending funds to public transport cooperatives and corporations for the acquisition of modern public utility buses (PUB) as the government pushes for the Metro Manila Bus Modernization Program.
‘The lending program offers responsive financing to PUB operators to invest in new buses equipped with the latest innovative technology,’ LandBank President and CEO Cecilia C. Borromeo was quoted in the statement as saying.
Borromeo said the lending program also supports the government’s plans for “a modernized transport system that provides commuters with safe, reliable and convenient transportation services.”
Qualified borrowers may avail up to 80 percent of the purchase price of the PUB. The loan has a fixed interest rate of 5 percent annually for the first three years and payable up to a maximum of seven years. The payment period includes the 2-year grace period on the principal.
The loan facility is available until December 31, 2021.
The announcement of the lending program for the transport came two months after the LandBank launched in July a P10-billion loan program aimed at boosting recovery efforts of the local government units (LGU) amid the coronavirus pandemic.
Loans will be available to eligible LGUs provided that the total loan exposure is less than their net borrowing capacity according to the computation by the Bureau of Local Government Finance. The amount of borrowings to be granted depends on the LGU’s project requirement.
The borrowing will carry an interest rate of 4.5 percent per year, but subject to annual re-pricing after the first year based on Landbank’s prevailing interest rate.
Proceeds of the loans can be used to fund acquisition of agricultural produce and equipment and construction of facilities linking products to market. These include market infrastructure development or improvement, mobile market, collection and buying stations, among others. Tyrone Jasper C. Piad
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