MANILA, Philippines — State-run Land Bank of the Philippines continues to beef up its lending to the onion industry to boost supply in the country.
Under the Landbank Sulong Saka Program, the government-owned financial institution has allocated another P102.9 million for lending to the onion industry.
As of end-September, Landbank has approved P1.1-billion worth of loans to support the production and trading of onion and acquisition of cold storage equipment.
Onion is a high-value crop that can be financed designed to provide credit assistance to various qualified stakeholders for agribusiness projects that support high-value crops production, processing and marketing.
Under the program, small farmers could borrow up to 90 percent of the total project cost for a production loan, while a maximum of 80 percent could be borrowed by small and medium enterprises (SMEs), cooperatives, farmers’ associations and organizations, large agribusiness enterprises and corporations, non-government organizations (NGOs), and countryside financial institutions (CFIs).
Landbank said eligible borrowers could also avail of up to 80 percent of the project cost for the acquisition of fixed assets, and up to 85 percent of the market price of the commodity for commodity loans.
In Nueva Ecija, about 20,000 onion farmers enjoy bountiful harvests and improved earnings through the cold storage facility financed by Landbank.
The storage facility owned and managed by the Argo Cold Storage of Argo International Forwarders Inc. could accommodate up to 450,000 bags of onions.
Farmers from Nueva Ecija and neighboring provinces benefit the most from Argo Cold Storage’s services, which help prolong the shelf life of onion produce and reduces post-harvest losses due to insect infestation.
“When I went to Nueva Ecija way back in 2012, I noticed that many onion farmers there were forced to sell their produce to middlemen or traders at a lower price, to avoid the crops from rotting. Now, farmers can increase their onion production and ensure that their produce are in safe custody through our cold storage services,” Argo Cold Storage and AIFI chairman Efren Patron Zoleta Jr. said.
Landbank has been supporting Argo Cold Storage and AIFI expand its operations since 2017, aimed at helping onion farmers from Nueva Ecija to sell their produce at a competitive market price and thereby generate higher income.
The Argo Cold Storage and AIFI also have an existing loan or credit line with Landbank to finance its additional working capital requirements.
On top of helping onion farmers, Argo Cold Storage and AIFI contribute to local job generation by employing more than 120 regular workers, porters and sorters, to facilitate the end-to-end operations of the cold storage facility.
“Landbank is doing its share in boosting the local onion supply by providing accessible credit assistance to onion producers in the country. We will continue to service the requirements of agriculture players towards a food-secure and resilient Philippines,” Landbank president and CEO Cecilia Borromeo said.
Apart from farmers, local government units could likewise avail of financial support under the Sulong Saka Program, provided that the loan amount will not exceed their net borrowing capacity, as certified by the Bureau of Local Government Finance (BLGF).
Loans for working capital and permanent working capital are payable up to one year and three years, respectively, while loans for fixed assets and construction of facilities are payable based on project cash flow but not more than its economic useful life.
The interest is based on market rate, while loans for smallholder farmers bear a concessional fixed rate of five percent per annum.