State-led Land Bank of the Philippines (LandBank) over the weekend announced a P5-billion credit program to provide financial assistance to local government units (LGUs) and tourism enterprises to boost tourist facilities and services.
Under the Tourist Infrastructures and Services Mobilization (TOURISM) Lending Program, LGUs can borrow 100% of the total project cost requirement, provided it is not more than its net borrowing capacity.
Small and medium enterprises (SMEs) and cooperatives can also borrow up to 80% of their project cost, while large corporations can borrow up to 75%.
The Department of Trade and Industry (DTI) defines small enterprises as those with total assets worth P500,001 to P5 million; medium from over P5 million to P20 million; and large from over P20 million.
Qualified projects under the credit program include primary tourism support facilities, infrastructure, and services such as hotels, resorts, automation, and digitalization of tourism services.
Short-term loans for working capital will be payable up to a year, while term loans for permanent working capital are payable up to five years.
Term loans for capital expenditures are payable based on the projected cash flow up to a maximum of 15 years with a two-year grace period on the principal repayment.
Meanwhile, team loans for the acquisition of tourist transport facilities and units are payable based on cash flow but should not exceed seven years, or the economic useful life of the facilities inclusive of a six-month grace period.
“LandBank is committed to supporting the national government’s efforts to restore confidence and enthusiasm for the tourism sector that will help boost economic activity, and create livelihood opportunities in tourist areas nationwide,” LandBank President and CEO Cecilia Borromeo said in an emailed statement.
LandBank last month opened a P333.3-million credit facility for farmers to boost their working capital and increase production.
The bank is mandated to promote countryside development while remaining financially viable. It implements the comprehensive agrarian reform program (CARP), provides assistance to small farmers and fisherfolk, and serves as an official depository of government funds.
It was the second-biggest bank in the Philippines in terms of assets as of September 2022 with P2.761 trillion. — DVM, GMA Integrated News