THE Land Bank of the Philippines approved to bankroll P62.32-billion worth of financing to 194 local government units (LGUs) across the country to support their Covid-19 recovery efforts.
In a statement on Wednesday, LandBank said that P1.89 billion of the approved loans have been released already to 32 LGUs as of February 2.
LandBank President and CEO Cecilia C. Borromeo said that the bank “recognizes the crucial role of LGUs in the whole-of-nation approach to recover from the economic downturn caused by the pandemic.”
The loan assistance is under the state-run bank’s RISE-UP LGUs (Restoration and Invigoration package for a Self-Sufficient Economy towards UPgrowth for LGUs) Lending Program. The lending facility is aimed at extending necessary funding requirements of provincial, city and municipal LGUs to help them recover from the impact of the pandemic.
It was launched in July last year with an initial fund allocation of P10 billion. The program fund was increased later to P80 billion in response to the rising number of loan applications.
Among the initiatives being funded by the RISE-UP LGUs Lending Program include purchase of agricultural produce, acquisition of equipment and construction of facilities for linking of products to the market. In addition, the state-run bank also finances LGU programs and projects that provide basic and support services, social welfare, healthcare, and other infrastructure activities.
Meanwhile, LandBank also encouraged LGUs to take advantage of the interest subsidy in their borrowings.
The national government has provided a P1-billion interest subsidy fund for LGU loans, following the mandate of Republic Ac 11494 or the Bayanihan to Recover as One Act. Borrowers can avail this until December 31, 2022, unless otherwise earlier depleted.
A maximum of interest subsidy amounting to P10 million was set for city and provincial LGUs while P5 million was for municipalities.
“We are fully committed to finance local development projects toward generating jobs and jumpstarting the local economy,” Borromeo added.
Last year, LandBank registered net income amounting to P17.1 billion, which is 7 percent lower than P18.5 billion in 2019, following the slowdown in business activities amid the lockdown measures due to the pandemic.
Total assets as of end-December 2020 grew by 16.1 percent to P2.362 trillion from P2.033 trillion in 2019.
Capitalization, meanwhile, surged by 13 percent to P168.3 billion last year from 149 billion in 2019. Common Equity Tier ratio stood at 15.17 percent.
The bank extended the waiver on inter-bank fund transfers until March 31.