Land Bank of the Philippines (LandBank) has approved more than P62 billion in loans to 194 local government units (LGUs) under its program that aims to revive local economies from the coronavirus pandemic’s impact.
The government-run bank said in a statement on Wednesday it had cleared P62.32 billion under its Restoration and Invigoration package for a Self-Sufficient Economy toward UPgrowth for LGUs (RISE-UP LGUs) lending program.
At least P1.89 billion has been released to 32 local governments as of February 4.
Reception to the program since its July launch has been so positive that Landbank increased its fund allocation from P10 billion to P80 billion to accommodate more loan applications.
Through the program, the bank finances LGUs’ Covid-19 response and recovery interventions. These include buying agricultural products; acquiring equipment; building facilities to link products to the market; and other programs that offer basic and support services, social welfare, health care, and other infrastructure activities.
“LandBank recognizes the crucial role of LGUs in the whole-of-nation 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,” LandBank President and Chief Executive Officer Cecilia Borromeo was quoted as saying in the statement.
The bank also urges LGUs to draw on their approved and enrolled loans under the program and take advantage of the interest subsidy.
Under Republic Act 11494, or the “Bayanihan to Recover as One Act” (Bayanihan 2), local government loans from LandBank is subject to P1 billion in the Interest Subsidy Fund (ISF), which may be availed until December 31 or is depleted.
The subsidy is subject to a maximum limit of 2 percent per annum of the approved loan amount or P10 million for each province and city, and P5 million for each town, whichever is lower.
When the subsidy is applied to the lending program, outstanding and succeeding loan releases to LGUs will be subject to a fixed interest of 4 percent per annum, inclusive of the 2 percent per annum.
“Thereafter, the interest shall [still] apply, but without any subsidy from the national government,” LandBank said.