State-owned Land Bank of the Philippines (Landbank) on Wednesday said it would comply with the directive of President Rodrigo Duterte to submit before end-July 2019 a detailed report on its plans and program for the agriculture sector.
Duterte warned Landbank that he would order the bank’s abolition if management would not be able to prioritize its mandate to help the agriculture sector.
Data showed that in the first half of 2019, Landbank’s total loans reached rose by 14.6 percent to P799.64 billion, from P697.63 billion during the same period last year.
Bulk of these were extended to national government priority programs, including infrastructure projects, amounting to P744.49 billion, higher than year-ago’s P655 billion, or 93 percent of its total lending.
Loans extended to the bank’s priority sectors–the farmers and fisherfolks – reached only P42.31 billion, just 5.8 percent higher than the P39.96 billion in the same period last year. This accounts for 5.29 percent of the total loans it extended during the six-month period.
In a statement, the bank said it “has, and will always remain steadfast in pursuing our mandate of helping our small farmers and fishers, and the agricultural sector at large.”
The bank said it would be “strengthening partnerships with cooperatives, farmer groups and associations as well as collaboration with other key agencies and government units.”
“As a matter of fact, together with the office of the provincial Governor of Cotabato, we have a scheduled roadshow with initially 400 farmers, including those who never had financial access,” it said.
“This will just be the first of many. We look forward to more synergies such as this, to help us fully realize our President’s vision and our mandate,” it added.
In a briefing, Finance Secretary Carlos Dominguez III said Landbank has lots of functions like the main depository of the government and the disbursement bank for the government’s conditional and unconditional cash transfer program.
He said the bank has the largest portion of loans dedicated to the agriculture sector compared to the other financial institutions in the country.
This was confirmed by Landbank president and chief executive officer Cecilia Borromeo, who also said that aside from the farmers and fisherfolk, they also support small and medium enterprises and the various projects of local government units (LGUs), among others.
“We are the only bank who is compliant to the Agri-Agra Law requirement,” she said.
Republic Act (RA) 10,000, otherwise known as An Act Providing for an Agriculture and Agrarian Reform Credit and Financing System Through Banking Institutions, requires banks to allocate 10 percent of their funds for agrarian reform credit (Agra) and 15 percent for other agricultural credit (Agri).
The Bangko Sentral ng Pilipinas (BSP) said rural banks are the most compliant with this law given their proximity to the intended clients.