Landbank to increase exposure to agri sector

MANILA, Philippines — State-run Land Bank of the Philippines is planning to further increase its exposure to agricultural loans, which is now currently at 22.17 percent and the highest in the banking industry, according to top officials.

In an interview late Tuesday, Landbank president and chief executive officer Cecilia Borromeo said the bank is planning to submit to President Duterte its plan, which would lay out programs and strategies to increase lending to the agriculture sector.

“Yes we will submit the report. We will also include the plan to further increase our exposure,” Borromeo told reporters.

Finance Secretary Carlos Dominguez said the plan would be submitted before the end of the month, as directed by Duterte during his 4th State of the Nation Address (SONA), and possibly presented during the next meeting of the Cabinet.

Dominguez said the DOF and Landbank would also take the time to explain to President Duterte the real status of Landbank’s lending to the agriculture sector.

According to data presented by Borromeo, Landbank’s gross loan portfolio as of June 30 reached P799.64 billion, of which P744.5 billion or 93.1 percent went to priority sectors.

Borromeo said the bank’s total exposure to the agriculture sector amounted to P177.32 billion, accounting to 22.17 percent of its total loan portfolio.

“This is the bank with the largest proportion of loans to the agriculture sector compared to any other bank of similar or smaller size,” Dominguez said.

Borromeo said it is the only bank which is compliant with the Agri-Agra Reform Credit Act.

Aside from the agriculture sector, she said the bank also provides loans to other priority sectors, including micro, small and medium enterprises, communications, transportation, housing, education, health care, environment, utilities, and others.

During his 4th SONA on Monday, Duterte demanded for Landbank to concentrate its efforts in the countryside and to go back to its original mandate of helping farmers and fishermen.

He threatened that Landbank would be “reconfigured” or abolished if it does not follow this directive.

However, Dominguez defended Landbank, saying it still needs to extend commercial loans given the size of its resources.

“The size of the resources of the bank as the main depository of government accounts makes it necessary for them to deploy their funds to commercial and industrial projects, as well as agriculture projects,” Dominguez said.