Japan-funded project opens credit line for MSMEs

A JAPAN-FUNDED 15 billion yen “agribusiness promotion program” will help private sector enterprises set up shop in Mindanao, which is seen as the new frontier for agribusiness, manufacturing, power, and other industries in a bid to shed its image as a high-risk investment destination.

The Mindanao Development Authority (MinDA) said the fund will kickstart a program called Harnessing Agribusiness Opportunities through Robust and Vibrant Entrepreneurship Supportive of Peaceful Transformation (Harvest) in the so-called Bangsamoro areas, director for investment promotion and public affairs Romeo Montenegro said via text message.

He said the Harvest project would be implemented through the Land Bank of the Philippines.

On Thursday, Japanese Press Secretary Yasuhisa Kawamura said in a briefing on the sidelines of the Asia-Pacific Economic Cooperation Leaders’ Meeting that Japan committed 15 billion yen for an “agribusiness promotion program” as part of efforts to promote peace in Mindanao through increased economic activities.

Documents from the National Economic and Development Authority (Neda) said the Harvest project was undergoing review by the Neda-Investment Coordination Committee (Neda-ICC) Secretariat for possible implementation in 2016.

The ICC evaluates the fiscal, monetary and balance of payments implications of major national projects and recommends to the President the timetable of their implementation on a regular basis. It also advises the President on matters related to domestic and foreign borrowing.

In a separate report, Landbank said the Harvest project would be implemented until June 2021. The project would create a lending window for agribusiness and agribusiness-related investors in the Bangsamoro territory and neighboring areas.

Landbank, as the project proponent, submitted its proposal on July 14, 2015.

It said Harvest would provide “a line of credit at a concessional rate and terms” to eligible borrowers, including micro, small, and medium enterprises (MSMEs) as well as cooperatives and large private corporations.

The lending facility would assist private sector enterprises to help implement their expansion and modernization plans, to undertake new sub-projects, and to finance production and operating expenses as well as capital investment requirements, according to the NEDA report.

“These enterprises would thus be able to alleviate the operational and financial requirements arising from the high risks associated with operating in the Bangsamoro areas (such as, but not limited to security, peace and order situation, inadequate infrastructure for connectivity and power, long gestation nature of agribusiness operations, etc.),” Neda said.