LandBank: P4.3B in loans granted to LGUs under Palay ng Lalawigan Program

State-owned Land Bank of the Philippines on Tuesday said it has approved P4.3-billion worth of loans for local government units (LGUs) to purchase unmilled rice or palay from local farmers, one year into its lending program.

In a statement, the LandBank said it has already granted loans to six LGUs under the "PALAY ng Lalawigan" or the PAlay aLAY sa Magsasaka ng Lalawigan Lending Program officially launched October last year.

Among those approved are loans of the Provincial Government of Nueva Ecija, City Government of Cabanatuan City in Nueva Ecija, Provincial Government of Isabela, Municipal Government of Alicia in Isabela, Provincial Government of Tarlac, and Provincial Government of Camarines Sur, as of September 23, 2020.

The PALAY ng Lalawigan program is a lending program open to LGUs of palay-producing provinces, with the proceeds open to be used for palay procurement or to acquire farm machineries and post-harvest facilities, and other rice-related activities.

The loanable amount is based on the requirement of the project, but not more than the Net Borrowing Capacity (NBC) of the LGU as per the computation or certification of the Bureau of Local Government Finance (BLGF).

Short-term loan lines and permanent working capital under the program bear a fixed interest rate of 2% per annum until December 31, 2022.

The term loan, on the other hand, carries an interest rate of 4% per annum until the same period, subject to re-pricing.

"We are encouraging our LGUs to avail of the LANDBANK PALAY ng Lalawigan Lending Program to bankroll their direct engagement in the local rice industry value chain," said LandBank president and chief executive officer Cecilia Borromeo.

"It will be a big help to our local farmers whose incomes may have been affected, in one way or another, by the fluctuating farmgate prices of palay," she added.

To recall, LandBank target to assist a million farmers in 2019, following threats of President Rodrigo Duterte to step up agricultural loans else be shut down.

LandBank is mandated to promote countryside development while remaining financially viable.—AOL, GMA News