Landbank rolls out P10-B loan program to aid LGUs’ recovery from COVID-19 crisis

State lender Land Bank of the Philippines on Wednesday launched a new lending program to finance development and innovative projects of local government units (LGUs) in a bid to recover from the COVID-19 pandemic.

In a statement, Landbank said it has set aside P10 billion for the RISE UP LGUs Lending Program available for provincial, city and municipal LGUs. 

RISE UP LGUs stands for Restoration and Invigoration package for a Self-sufficient Economy towards UPgrowth for LGUs. 

The program was virtually launched Wednesday during the regular meeting of the Union of Local Authorities of the Philippines (ULAP), the umbrella organization of all leagues of LGUs and locally elected government officials in the country, according to Landbank.

Landbank president and CEO Cecilia Borromeo and ULAP National President Qurino Governor Dakila Carlo Cua led the virtual program launch, which was participated in by ULAP member-leagues and officers including, among others, League of Provinces of the Philippines (LPP) National President Governor Presbitero Velasco Jr., League of Cities of the Philippines (LCP) National President Mayor Evelio Leonardia, and League of Municipalities of the Philippines (LMP) National President Mayor Luis Singson.

“The ongoing public health crisis caused by the COVID-19 pandemic has highlighted the vital role of LGUs in managing the effects of unforeseen catastrophes. We hope that the Landbank RISE UP LGUs Program will help them better serve their constituents and communities, while developing a stronger local economy that can withstand future crises,” Borromeo said. 

The loan program will be made available to eligible LGUs at a loan amount depending on their project requirements, provided that the total loan exposure, including the proposed loan under the program, should not be more than its net borrowing capacity per Bureau of Local Government Finance (BLGF) computation/certification, Landbank said.

The loan shall bear an affordable interest rate of 4.5% per annum fixed for the first year, and subject to annual repricing thereafter based on the bank’s prevailing interest rate, it said.

The loan may be used for the purchase of agricultural produce, acquisition of equipment, and construction of facilities for linking of products to the market such as the market infrastructure development and/or improvement, mobile palengke, collection and buying stations, and related facilities, according to the state lender.

The LGU may also use the loan to fund programs and projects that will provide its constituents with basic and support services, social welfare and healthcare, and other infrastructure activities that aim to bring back confidence of the people and spur the local economic activities/businesses after a crisis or pandemic, it said.

For permanent working capital, the Landbank RISE UP LGUs Lending Program offers a loan tenor of three years. 

Meanwhile, tenor for term loan is up to 10 years. 

A grace period of up to one year on principal payment for both credit facilities may also be granted. 

To ensure an extensive information dissemination and coordination for the loan availment of the lending program by eligible LGUs, Landbank said it signed a Memorandum of Understanding (MOU) with ULAP, LPP, LCP and LMP. —KG, GMA News