MANILA – Land Bank of the Philippines (Landbank) is looking for ways to bring down the interest rate of its RISE UP local government units (LGUs) lending program with the help of local executives.
RISE UP stands for Restoration and Invigoration package for a Self-sufficient Economy towards UPgrowth for LGUs.
During the LagingHandaPH briefing Thursday, Landbank President and Chief Executive Officer Cecilia Borromeo said they are coordinating with the Union of Local Authorities of the Philippines (ULAP) to source additional funds for the program.
“Landbank will endeavor to look for funds that we can blend with our internally-generated funds so that we can give the loans probably even at 3.5 percent,” she said.
Landbank has allocated PHP10 billion for the RISE UP LGU lending program, which has an interest rate of 4.5 percent.
Borromeo said they decided to make the interest rate the same for all LGUs without looking at their credit ratings to allow the local executives to immediately implement programs that will boost their local economy.
Among the projects that can be financed by this loan program include the purchase of agricultural produce, construction of market infrastructure, and acquisition of agricultural equipment and vehicles to be used for mobile palengke (market).
“This is a very good time, even for smaller LGUs, to embark on their projects to really rev up their own local economies,” Borromeo said, citing the low interest rate environment in the domestic economy.
Quirino Governor Dakila Cua, who is the concurrent ULAP president, said they are asking the national government for funding aid from measures, such as the proposed Bayanihan 2.
“These days, we are talking about a whole-of-nation approach to defeat Covid (coronavirus disease 2019) and what better example than to enable a local government-led local government stimulus empowered by the funds of Landbank of the Philippines and if possible subsidized by the national government through the Bayanihan to Heal as One Part 2,” he said.
Cua said LGUs are in a different position compared to the national government because local executives can micromanage the needs of their constituents.
He, however, said the issue here is the capacity of the LGUs to finance their programs and projects.
“I think this bridge financing from Landbank will greatly help us,” Cua said, adding he is hopeful that interest rates will be lowered and payment terms will be more flexible. (PNA)
