Landbank allots P5 billion for lending to tourism

MANILA, Philippines — State-run Land Bank of the Philippines is allocating an initial P5 billion to finance projects that will boost tourism recovery in the country.

Landbank is starting a new credit facility through the Tourist Infrastructures and Services Mobilization lending program, as the government continues to further open the economy.

This is also part of efforts to support the government’s drive to revive the local tourism sector impacted by the pandemic.

Landbank has set aside an initial program fund of P5 billion to finance access projects to tourist destinations like airports, sea ports, transport terminals, roads and bridges, communication utility and information technology, water and power utilities.

The program will provide financial assistance to local government units and tourism enterprises accredited with the Department of Tourism to help them re-establish and improve their tourist facilities and services.

Landbank president and CEO Cecilia Borromeo said the bank aims to support goals to restore confidence and enthusiasm for the tourism sector.

“This will help boost economic activity and create livelihood opportunities in tourist areas nationwide,” Borromeo said.

Eligible projects include primary tourism support facilities and infrastructures and services like hotels, resorts, automation and digitalization of tourism services by travel agencies, facilities for meetings and conferences.

It will also cover secondary tourism projects like restaurants, adventure facilities, shopping malls, ambulatory clinics and spa and tertiary hospitals among others.

Based on the program, LGUs may borrow 100 percent of the total project cost requirement, but shall not be more than the LGU’s net borrowing capacity as certified by the Bureau of Local Government Finance.

On the other hand, small and medium enterprises and cooperatives may borrow up to 80 percent of the project cost, and up to 75 percent for large corporations.

Short-term loans for working capital are payable up to one year while term loans for permanent working capital are payable up to five years.

Meanwhile, term loans for capital expenditures are payable based on projected cash flow up to a maximum of 15 years, with a two-year grace period on the principal repayment.

Term loans for the acquisition of tourist transport facilities and units are payable based on cash flow but not to exceed seven years or the economic useful life of the financed facilities, inclusive of a six-month grace period.