The Land Bank of the Philippines has approved a total of P62.32 billion in loans to help 194 local government units (LGUs) recover from the COVID-19 pandemic.
In a statement, Landbank said the loans approved for LGUs are under its RISE-UP LGUs or Restoration and Invigoration package for a Self-Sufficient Economy towards UPgrowth for LGUs lending program.
Of the P62.32-billion approved, P1.89 billion has been released to 32 LGUs as of February 2, 2021, the state-run lender said.
The RISE UP LGUs Program aims to provide the necessary funding requirements of provincial, city, and municipal LGUs to revive their local economy and recover from the adverse impact of the COVID-19 pandemic.
The program was launched in July 2020 in partnership with the Union of Local Authorities of the Philippines (ULAP), with the participation of the League of Provinces of the Philippines (LPP), League of Cities of the Philippines (LCP), and League of Municipalities of the Philippines (LMP).
Since then, Landbank said the program has gained wide acceptance by LGUs that the state-run bank has increased its fund allocation from the initial P10 billion to P80 billion to accommodate the rising number of loan applications.
Through the RISE-UP LGUs lending program, the bank finances COVID-19 response and recovery interventions, including but not limited to the purchase of agricultural produce, acquisition of equipment and construction of facilities for linking of products to the market, and other programs and projects of the LGU that provide basic and support services, social welfare, healthcare, 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 CEO Cecilia Borromeo said.
The national government, through Republic Act No. 11494 or the “Bayanihan to Recover as One Act” is providing P1 billion in interest subsidy fund (ISF) for LGU loans obtained from Landbank, which may be availed until December 31, 2022, unless otherwise earlier depleted.
The interest subsidy is subject to a maximum limit of 2% per annum of the approved loan amount or P10 million per province and city, and P5 million per municipality, whichever is lower.
The Landbank noted that when applying the interest subsidy to the RISE UP LGUs lending program, outstanding and succeeding loan releases to LGUs until December 31, 2022 or the depletion of the ISF, whichever comes earlier, will be subject to a fixed interest of 4% per annum inclusive of the 2% per annum subsidy from the national government.
“Thereafter, the interest shall remain to apply but without any subsidy from the national government,” the bank said.—LDF, GMA News