State-owned Land Bank of the Philippines said Tuesday it posted P713.8 billion in outstanding loans for agriculture and rural development as of June 30, 2023.
The P713.8 billion represents 69 percent of the bank’s total loan portfolio of P1.04 trillion, which is close to three times the 25-percent requirement for local banks to allocate financing for agriculture, fisheries and rural development under Republic Act No. 11901 or “The Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022.”
Under the new law, AFRD financing is defined as loans and investments to finance activities that shall enhance productivity and increase income of an agricultural and fisheries household, thereby promoting productivity and competitiveness in the agricultural sector, as well as sustainable development of rural communities.
“LandBank remains steadfast in fulfilling its primary development mandate to advance the country’s agricultural sector. With a holistic approach covering all players in the value chain, we will continue to extend accessible and responsive financing to ramp-up agriculture modernization and productivity, paving the way for more resilient local communities,” said bank president and chief executive Lynette Ortiz.
The bank’s computation follows the new AFRD law and its implementing rules and regulations issued by the Bangko Sentral ng Pilipinas.
It said of the P713.8 billion in outstanding loans, the bank dedicated P107.8 billion to agriculture and fisheries production, which includes funding for the processing of fisheries and agri-based products and farm inputs.
To help fast-track agri modernization, the bank channeled P70.4 billion for the digitalization and automation of farming, fishery and agri-business activities and processes, including related financial and management information systems.
LandBank also provided P78.5 million for agri-tourism projects, which involve attracting visitors and tourists to farm areas for production, educational and recreational purposes.
A significant portion of the AFRD loans totaling P244.1 billion ramped-up public rural infrastructure development, covering highways, streets, bridges, transport systems, irrigation, public markets, slaughterhouses, warehouses, solid waste management, flood control, drainage, and other essential infrastructure and development projects.
It said another P167 billion supported sustainable projects that provide lasting benefit for both clients and society while reducing pressures on the environment. This also covers green finance which funds climate change mitigation and adaptation projects, among others.
The rest of LandBank’s AFRD financing supported farm and fishery entrepreneurial activities; agricultural mechanization; agricultural and fishery commodities; essential facilities, equipment and machineries; capacity-building activities; and projects that promote the health and wellness of farmers, fishers and Agrarian Reform Beneficiaries including members of their households.
