Landbank president and CEO Cecilia Borromeo.
MANILA – Top management of Land Bank of the Philippines (Landbank) said that Mindanao, being the country’s food basket, will definitely receive greater focus in the bank's bid to increase lending to the agriculture sector.
Landbank President and Chief Executive Officer (CEO) Cecilia Borromeo said loans to the sector is the highest among domestic banks and their borrowers are all over the country.
“But since Mindanao is the biggest agricultural area, then Mindanao will continue to get a very large chunk of our loans to the agri,” she said.
Borromeo explained that banks are not allowed to allocate more than 20 percent of their total loan portfolio to a single industry but noted that since “total loan portfolio is also getting bigger, the 20 percent of something bigger will be bigger”.
President Rodrigo R. Duterte, in his State of the Nation Address (SONA) last week, directed Landbank officials to submit to him by the end of this month an action plan that details how the bank will increase lending to the agriculture sector.
Landbank data show that in the first half of 2019, loans that the state-owned financial institution extended to the priority sector accounted for 93.1 percent of total loans amounting to PHP744.5 billion, which in turn is higher than year-ago’s PHP655 billion.
Specifically, total loans to the mandated sector reached PHP42.31 billion, the bulk of which are extended to small farmers including agrarian reform beneficiaries amounting to PHP42.17 billion, while PHP14 billion was extended to small fishers and their associations.
Loans that support the agriculture and fisheries sector amounted to PHP177.32 billion while loans that support the national government’s priority programs, including infrastructure projects, reached PHP524.86 billion.
Borromeo said they continue to encourage farmers to organize themselves into cooperatives or associations since economies of scale does not favor lending to individual farmers.
“The successes that we have seen is through the cooperatives but we still lend to individuals but in a very supervised manner like the Sikat Saka program,” she said.
The Landbank chief said the President’s directive to increase lending to the agriculture sector will not be a disadvantage to the bank’s finances “because we are the biggest lenders to the agriculture already”.
“So we just need to reach out to more small farmers and their cooperatives, which is what we’ve been trying to do year after year. We just need to intensify it some more,” she added. (PNA)
