MANILA, Philippines — Local government units (LGUs) struggling to finance programs and projects aimed at recovery post-COVID-19 pandemic may tap the Land Bank of the Philippines’ (Landbank) new P10-billion lending program.
In a statement Wednesday, Landbank said the Restoration and Invigoration package for a Self-sufficient Economy towards UPgrowth for LGUs (RISE UP LGUs) program will be made available to provincial, city, and municipal governments.
Landbank said RISE UP LGUs “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.”
The loan will be slapped with a “lower” fixed interest rate of 4.5 percent per annum during the first year, Landbank said. Moving forward, the interest will be subjected to yearly repricing based on the lender’s prevailing interest rate.
“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,” Landbank said.
“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,” Landbank added.
“For permanent working capital, the Landbank RISE UP LGUs lending program offers a loan tenor of three years. Meanwhile, the 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,” according to Landbank.
“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,” Landbank president and chief executive Cecilia C. Borromeo said.