Small rice farmers now have an alternative market for their produce as state-owned Land Bank of the Philippines (Landbank) announced it has approved a total of P4.3 billion in loans to allow local government units to purchase palay from local farmers.
Under the Bank’s “PALAY ng Lalawigan” (Palay alay sa Magsasaka ng Lalawigan)” Lending Program, Landbank said it has so far approved loans to six LGUs.
The program, officially launched in October 2019, is open to municipal, city, and provincial governments of palay-producing provinces. Aside from loans for palay procurement, eligible LGUs may also use the fund to acquire farm machineries and postharvest facilities and finance other rice-related activities.
As of Sept. 23, Landbank has approved loans for the Provincial Government of Nueva Ecija, City Government of Cabanatuan in Nueva Ecija, Provincial Government of Isabela, Municipal Government of Alicia in Isabela, Provincial Government of Tarlac, and Provincial Government of Camarines Sur.
“We are encouraging our LGUs to avail of the Landbank PALAY ng Lalawigan Lending Program to bankroll their direct engagement in the local rice industry value chain. It will be a big help to our local farmers whose incomes may have been affected, in one way or another, by the fluctuating farm-gate prices of palay,” said Landbank President and Chief Executive Officer Cecilia C. Borromeo.
The fund facility is Landbank’s answer to the government’s call to prop up the livelihood of rice farmers heavily affected by the seasonality of palay planting. Rather than sell to unscrupulous rice traders who offer very low prices, farmers can now sell their produce to the LGUs.
The loanable amount of qualified LGUs under the lending program shall be based on the requirement of the project but not more than the net borrowing capacity of the LGU per Bureau of Local Government Finance computation or certification.
Short-term loan line and permanent working capital under the program bear a fixed interest rate of two percent per annum until Dec. 31, 2022. Term loan, on the other hand, carries an interest rate of four percent per annum until the same period, and subject to re-pricing afterward.
For more information about the Landbank PALAY ng Lalawigan Lending Program, interested LGUs may contact the nearest open Landbank lending center or branch nationwide. – Press release