Landbank extends P713.8-B loans to agri sector as of H1 2023

State-run Land Bank of the Philippines on Tuesday said its total outstanding loans to agriculture and rural development reached P713.8 billion as of June 30, 2023.

The amount represents 69% of the lender’s total loan portfolio of P1.04 trillion, Landbank said in a statement.

The loans extended to the agriculture sector were also nearly three times over the 25% requirement for local banks to allocate financing for agriculture, fisheries, and rural development (AFRD) under Republic Act No. 11901 or The Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022, according to the bank.

Under the said law, AFRD financing is defined as loans and investments to finance activities that shall enhance productivity and increase income of an agricultural and fisheries household, thereby promoting productivity and competitiveness in the agricultural sector, as well as sustainable development of rural communities.

"Landbank remains steadfast in fulfilling its primary development mandate to advance the country’s agricultural sector. With a holistic approach covering all players in the value chain, we will continue to extend accessible and responsive financing to ramp-up agriculture modernization and productivity, paving the way for more resilient local communities," said Landbank president and CEO Lynette Ortiz.

Broken down, of the P713.8-billion in outstanding loans, Landbank said it has allocated P107.8 billion to agriculture and fisheries production, which includes funding for the processing of fisheries and agri-based products and farm inputs.

The bank has extended P70.4 billion to digitalization and automation of farming, fishery, and agri-business activities and processes, including related financial and management information systems to help fast-track agriculture modernization.

The lender has also provided P78.5 million for agri-tourism projects, which involve attracting visitors and tourists to farm areas for production, educational and recreational purposes.

Landbank added that a significant portion of the AFRD loans amounting P244.1 billion ramped-up public rural infrastructure development, covering highways, streets, bridges, transport systems, irrigation, public markets, slaughterhouses, warehouses, solid waste management, flood control, drainage, and other essential infrastructure and development projects.

Meanwhile, another P167 billion backed sustainable projects that provide lasting benefit for both clients and society while reducing pressures on the environment. This also covers green finance which funds climate change mitigation and adaptation projects, among others, it said.

The bank said that the rest of the AFRD financing supported farm and fishery entrepreneurial activities; agricultural mechanization; agricultural and fishery commodities; essential facilities, equipment and machineries; capacity-building activities; and projects that promote the health and wellness of farmers, fishers and Agrarian Reform Beneficiaries (ARBs), including members of their households. —VAL, GMA Integrated News