LAND BANK of the Philippines (LANDBANK) said Mindanao will receive the biggest chunk of the bank’s loans, with the region having the biggest agricultural area in the country.
“Since Mindanao is the biggest agricultural area, then of course Mindanao will continue to get a very large of our loans to agri,” LANDBANK President and CEO Cecilia C. Borromeo told reporters at the sidelines of a central bank event on Friday.
Ms. Borromeo said the bank is looking to increase its loan to the agriculture sector by 20% by 2020 through “intensified efforts.”
“Historically, our agri loan portfolio has been growing by more than 15% year-on-year. Probably with the intensified efforts we might reach 20% growth. Not this year (but) probably in 2020,” she added.
In his State of the Nation Address last month, President Rodrigo R. Duterte threatened to abolish the LANDBANK for supposedly neglecting its mandate to finance agricultural projects and endeavors, criticizing the bank for being “mired with so many commercial transactions.”
However, the bank earlier said it is the only bank compliant with the Agri-Agra Law. Republic Act 10000 or the Agri-Agra Reform Credit Act mandates banks to allot at least 10% of their total loanable funds to agrarian reform beneficiaries and 15% for farmers and fisherfolk.
Data provided to reporters showed LANDBANK’s exposure to the agriculture and fisheries sectors amounted to P177.32 billion as of end-June, 22.17% of the lender’s total loan portfolio of P799.64 billion — 16.8% higher than P151.78 billion recorded as of June 2018.
This is on top of the P42.31 billion lent to the “mandated” sector, which includes small farmers including agrarian reform beneficiaries and their associations (P42.17 billion) as well as small fishers and their associations (P140 million).
Meanwhile, Ms. Borromeo said the bank is encouraging small farmers to join cooperatives and associations as it looks to “intensify” its lending to the agricultural sector.
“We are the biggest lender to the agriculture [sector] already. So we just need to reach out to more small farmers and their cooperatives, which is what we’ve been trying to do year after year. We just need to intensify it some more,” she added.
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