Landbank approves P4.3 billion loans for palay purchase

MANILA, Philippines — Small rice farmers will now have an alternative market for their produce as state-run Land Bank of the Philippines approved P4.3 billion in loans which will be used by local government units to directly purchase palay (unhusked rice).

Under the Palay ng Lalawigan lending program, Landbank has so far approved loans to six LGUs, including the provinces of Nueva Ecija, Isabela, Tarlac and Camarines Sur.

The city government of Cabanatuan in Nueva Ecija and municipal government of Alicia in Isabela also availed of the loan.

Implemented in October 2019, the loan program is open to municipal, city and provincial governments of palay-producing provinces.

Aside from loans for palay procurement, eligible LGUs may also use the funds to acquire farm machines and post-harvest facilities, as well as finance other rice-related activities.

“It will be a big help to our local farmers whose incomes may have been affected, in one way or another, by the fluctuating farmgate prices of palay,” Landbank president and CEO Cecilia Borromeo said.

The fund facility is Landbank’s answer to the government’s call to boost the livelihood of rice farmers heavily affected by the seasonality of palay planting.

The loanable amount of qualified LGUs under the program shall be based on the requirement of the project, but shall not be more than the net borrowing capacity of the LGU per Bureau of Local Government Finance certification.

Short-term loan lines and permanent working capital under the program bear a fixed interest rate of two percent per annum until Dec. 31, 2022.

The loan carries an interest rate of four percent per annum until the same period, and is subject to re-pricing afterward.