In 5 months, LANDBANK hits over 80% of farm loans target

MANILA, Philippines — State-run Land Bank of the Philippines is already close to hitting this year’s target for lending to the farm sector as of May, the Department of Finance reported Friday.

In a statement, the DOF, which oversees the financial performance of state-owned companies, said LANDBANK extended a total of P230.02 billion in loans to the agriculture sector in the first five months of the year. That was equivalent to 81.6% of the bank’s goal of lending P281.75 billion to the industry. 

Month-on-month, credit to the farm sector grew by P73 million in May, bringing the total number of farmers and fishers assisted by LANDBANK to 2,734.572 in the first five months.

Broken down, P230.02 billion, or close to two-thirds of total loan releases, went to small, medium and large agri enterprises.

The remaining amount of P84.17 billion went to small farmers and fisherfolk, and the agri-aqua related projects of local government units and state-run corporations. Specifically, small farmers and fishers borrowed a total of P1.24 billion through direct lending, and another P33.55 billion through conduits such as cooperatives and farmers’ associations, among other credit mechanisms.

LANDBANK is currently in the process of merging with another state-controlled lender, United Coconut Planters Bank, as President Rodrigo Duterte seeks to “significantly strengthen the capability to deliver financial services to the coconut industry and the entire agricultural sector.”

But debt watcher Fitch Ratings flagged the “immediate” negative impact of the merger on LANDBANK’s balance sheet and credit profile, saying the transaction could prove to be costly and would burden LANDBANK with more soured debts. — Ian Nicolas Cigaral