DBP releases P38 billion loans to LGUs in H1

MANILA, Philippines — State-run Development Bank of the Philippines (DBP) has issued P38.28 billion in loans to more than 100 local government units (LGUs) nationwide for the delivery of programs that would hasten economic recovery.

The DBP said the financing was extended in the first semester as part of the bank’s Assistance for Economic and Social Development for Local Government Units Financing Program, also known as ASENSO for LGUs.

The DBP awarded loans for socioeconomic programs to 51 local governments in Luzon, 40 in Mindanao and 19 in Visayas.

Most of the financing was used for the completion of projects on agriculture, information technology, health, housing, public infrastructure, sanitation, telecommunications and tourism. It also supported public works on disaster risk reduction and management.

Likewise, the DBP granted interest subsidies worth P330 million to 80 of the LGUs that borrowed through the program. The subsidies were applied to both interest owed by the localities due to their new and existing loans as part of government interventions under the Bayanihan to Recover as One Act.

DBP president and CEO Emmanuel Herbosa said the state-owned bank enforced a first come, first served basis for the program.

Under it, the subsidy ceiling was computed based on the approved loan amount, or P10 million for provinces and cities and P5 million for municipalities.

“We are also helping the LGU sector boost their resiliency against future economic downturns,” Herbosa said.

“DBP recognizes that LGUs are the fulcrum of local economic activity. We shall continue to work with the national government in implementing flexible interventions to support their initiatives to re-establish sustainable and resilient communities despite current challenges,” he said.

According to DBP’s website, the ASENSO for LGUs was crafted to speed up the completion of public infrastructure and delivery of socioeconomic programs consistent with the targets under the Philippine Development Plan. The bank intends to give financing to at least 10 percent of all local governments nationwide.

Up to 100 percent of the project cost can be shouldered by the DBP for as long as it lands within the local government’s debt service ceiling and borrowing capacity.

On the other hand, local governments can pay the loan for up to 15 years for infrastructure and capital expense projects, but just seven years for the purchase of equipment.