Landbank nears target lending volume to agriculture sector

MANILA, Philippines — The Land Bank of the Philippines has achieved roughly 93 percent of its target volume of loans for the agriculture sector as of end-October, made up mostly of financing for the purchase of post-harvest facilities and infrastructure.

In a report to the Department of Finance, Landbank said it issued P233.6 billion worth of loans to farmers and fishermen in 10 months, nearly hitting its P251.5 billion target.

The lion’s share of P94.01 billion was directed for the improvement and construction of farm infrastructure and post-harvest facilities.

Close to 60 percent of the outstanding loans at P150.16 billion was distributed to small, medium and large agricultural firms. On the other hand, the remaining P83.44 billion went to local governments and state-owned corporations (P50.52 billion) and farmers and fishermen (P32.92 billion).

Landbank said bulk of loans obtained by farmers and fishermen at P31.58 billion was acquired through cooperatives, farmers’ association, rural banks and other credit mechanisms. The other P1.34 billion, meanwhile, was secured through direct lending.

Landbank managed to increase its loan issuance by a net of P5.39 billion as of end-October, attributed to the growth in financing releases worth P4.41 billion allocated to small, medium, and large agricultural firms.

Loans supporting agriculture-related activities, including the establishment and improvement of public markets, farm-to-market roads, warehouses, cold storage, irrigation systems, fish ports, among others, picked up during the period.

Landbank has released 100 percent of the P11.04 billion in funds programmed for loans bankrolling the programs of the Department of Agriculture like the Rice Competitiveness Enhancement Fund under the Rice Trade Liberalization Law.

For the credit assistance for the Department of Agrarian Reform, Landbank has issued all of the program worth P65 million to agrarian reform beneficiaries. The portfolio seeks to extend agrarian reform cooperatives with assistance to become eligible organizations and financing service providers.

Landbank has assisted a total of 2.98 million farmers and fishermen. In October, the bank registered an increase of 13,125 beneficiaries, of which 10,189 availed regular loans from the previous month’s 2.97 million recipients.

Last year, Landbank’s loans for agriculture went up nearly one percent to P237.62 billion from P236.31 billion in 2019, as the financial institutions had to expand its lending support to the sector during the pandemic.

Agricultural firms received the largest share at P142.75 billion, local governments and state-run firms came in next at P50.89 billion, while farmers and fishermen acquired P43.98 billion.