DBP loans to pandemic-hit LGUs hit P36B in H1, set to rise further
Development Bank of the Philippines (DBP) has vowed to lend more funds to provinces, cities and municipalities in coordination with fiscal authorities as part of efforts to help local government units (LGUs) bounce back from the crippling effects of the coronavirus pandemic.
Thus said DBP president and CEO Emmanuel Herbosa who revealed that the state-owned lender had so far underwritten P36 billion worth of loans to 349 LGUs around the country in the first half of 2020—a number that is expected to rise once the bank’s second semester credit operations are tallied.
The new package includes subsidies on interest payments on new loans to the LGUs as well as funding support to affected industries in their constituencies.
“DBP recognizes that LGUs are the fulcrum of inclusive development,” Herbosa said. “We are one with them in formulating responsive actions that would hasten response and recovery efforts despite prevailing challenges.” DBP is the seventh largest bank in the country in terms of assets.
It caters to LGUs as a niche market, providing credit and advisory service to projects that spur the local economy.
Herbosa said the bank was working toward unifying its initiatives under one umbrella loan program that would serve as the platform for the national government’s stimulus package for LGUs. He said that with the anticipated release of stimulus funds under the recently-enacted Bayanihan to Recover As One Act, DBP could offer LGUs loan packages at lower interest and longer payment terms of up to 15 years.
“These types of interventions would greatly benefit lower-tier LGUs, as they scale up social and economic interventions for their constituents and boost their resiliency against future downturns,” Herbosa said. Earlier this year, DBP unveiled its interest rate subsidy program covering loans for LGUs that would be utilized for economic and social development projects that sought to mitigate the pandemic’s adverse effects.
Herbosa said that DBP, along with Land Bank of the Philippines, had allotted P1 billion each under the government’s second stimulus law to provide subsidies on interest payments on new and existing loans of LGUs as they implement their respective COVID-19 response and recovery efforts.
DBP’s efforts are oriented toward four strategic sectors—infrastructure and logistics; micro, small and medium enterprises; social services and community development, and environment.
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