The Land Bank of the Philippines (LANDBANK) recently announced that it will be directing its efforts to provide agriculture-related loans in the country’s largest agricultural producer. BusinessWorld reported that the bank plans to implement a 20% boost in its Agri lending by 2020.
As Mindanao is considered the biggest area in terms of agrarian activities, it is likely to receive a huge chunk of the loan funds, said Cecilia C. Borromeo, president, and CEO of LANDBANK.
In the past, the organization has recorded a growth of 15% every year. However, Borromeo noted that LANDBANK aims to achieve a 20% increase in Agri lending through “intensified efforts” by the target year.
This move seems to be in response to Philippine President Rodrigo Duterte’s warning against the bank. In his State of the Nation Address, Duterte pressured LANDBANK to fulfil its mandate to provide financial assistance to agriculture-related initiatives. Accusing the financial institution of being “mired with so many commercial transactions,” Duterte threatened to abolish the bank.
LANDBANK is a financial organization owned by the Philippine government. It is created to aid the needs of farmers and fishermen. In its defense, the organization clarified that it is the one that complies with the Republic Act 10000 or the Agri-Agra Reform Credit Act (Agri-Agra Law).
The Agri-Agra Law requires banks to set aside a portion of their loan fund for agricultural assistance. Banks are required to allot 10% and 15% of the funds for individuals affected by agrarian reform and farmers/fishermen, respectively.
To move toward this goal, the institution offers several agriculture loan programs such as the Agricultural and Fisheries Financing Program, Agricultural Credit Support Project and DA Sikat SAKA Program.
Borromeo added that the bank is the “biggest lender to the agricultural sector.”