State-owned Land Bank of the Philippines has launched a P15-billion lending program for hog raisers in need of additional capital to sustain or increase production.
The Department of Agriculture (DA) and Landbank signed a memorandum of understanding Wednesday, formally allowing the latter to earmark P15 billion for the government’s Swine (Special Window for Interim Support to Nurture Hog Enterprises) program.
The money would be available for commercial hog raisers registered as cooperatives or farmers’ associations, small and medium enterprises and large enterprises or corporations.
Those engaged in backyard raising are not included, albeit they supply 60 percent of the country’s local pork. This may be due to commercial raisers’ sturdier financial buffer, which gives them the capacity to enforce stricter biosecurity protocols than small-time raisers.
The loans shall be exclusively used to support swine production, which includes the acquisition or importation of semen or breeding animals; for feed milling operations; for the construction, improvement, or retrofitting of facilities to comply with the DA’s biosecurity protocols; for acquisition of fixed assets; and for working capital.
Under the program, short-term loans are due for payment after one year. Loans for capital are payable for up to five years, while loans for fixed-asset acquisitions are payable based on the cash flow or payback period of the project, with a grace period on the principal and interest.
Eligible borrowers may avail themselves of short-term or long-term loans for up to 80 percent of their total financing requirement. A fixed interest rate of 3 percent per annum would be imposed for three years, subject to annual repricing thereafter.
The DA, for its part, would provide Landbank a list of eligible borrowers.
The agency would assist those interested in the preparation of a business plan or those who would want to enrol in the Philippine Crop Insurance Corporation and secure necessary permits.
Loan recipients would also receive training on biosecurity management and hog breeding or rearing.
It would be Landbank’s responsibility to monitor the performance of borrowers and provide monthly reports to the DA.