Landbank subscription to tier 2 issues of rural banks hits P786 million

MANILA, Philippines - The Land Bank of the Philippines said that its subscription to the unsecured subordinated tier 2 issuances of its accredited rural banks has already reached P785.5 million to date.

The bank has released P15 million to the Bukidnon Bank Inc. and P20 million to the RBT Bank Inc. of Misamis Oriental under its Unsecured Subordinated Debt Facility (USDF).

Landbank’s subscriptions to lower tier 2 capital issuance of its partner rural banks are aimed at beefing up the capital base of the rural banks. 

Landbank president and chief executive officer Gilda Pico said that since the bank launched the debt facility in 2007, it has already extended support to a total of 13 banks and has approved a total of P1.1 billion for 19 banks.

The USDF facility supports Landbank-accredited rural banks, thrift banks and cooperative banks to help them comply with the stricter requirements of enhanced Basel 1, improve their capital base and expand their agri- and other countryside lending operations.

Due to the good response of rural banks to the program, Landbank has recently increased its fund allocation to facility from P1 billion to P1.8 billion to be able to extend support to more of its partner banks and countryside financial institutions.

Landbank said it is working closely with rural banks, thrift banks and cooperative banks in improving the rural economic landscape. To date, more than 400 countryside financial institutions are accredited by Landbank as conduits of its financial assistance to the country’s small farmers and fisherfolk, micro, small and medium entrepreneurs, and other key sectors in countryside development.

“We hope that the success of this program will redound to greater benefits for the communities and clients that our partner banks and financial institutions to serve and ultimately help promote greater productivity and enhanced economy in the countryside,” Pico said.