Land Bank of the Philippines said Friday it approved P1.1 billion in loans to support the production and trading of onion and the acquisition of cold storage equipment, with additional loans worth P102.9 million in the pipeline as of Sept. 30.
“LandBank is doing its share in boosting the local onion supply by providing accessible credit assistance to onion producers in the country. We will continue to service the requirements of agriculture players towards a food-secure and resilient Philippines,” said LandBank president and chief executive Cecilia Borromeo.
Onion is a high-value crop that can be financed under LandBank’s Sulong Saka Program, designed to provide credit assistance to various qualified stakeholders for agribusiness projects that support high-value crop production, processing, and marketing.
Under the program, small farmers may borrow up to 90 percent of the total project cost for a production loan, while a maximum of 80 percent may be borrowed by small and medium enterprises, cooperatives, farmers’ associations and organizations, large agribusiness enterprises and corporations, non-government organizations and countryside financial institutions.
Eligible borrowers may also avail of up to 80 [percent of the project cost for acquiring fixed assets and up to 85 percent of the commodity’s market price for commodity loans.
Local government units may also avail of financial support under the Sulong Saka Program, provided that the loan amount will not exceed their net borrowing capacity, as certified by the Bureau of Local Government Finance.
Loans for working and permanent working capital are payable up to one year and three years, respectively, while loans for fixed assets and construction of facilities are payable based on project cash flow but not more than its economically advantageous life.
The interest is based on the market rate, while loans for smallholder farmers should bear a concessional fixed-rate of 5 percent per annum.
Meanwhile, some 20,000 onion farmers enjoy bountiful harvests and improved earnings through the cold storage facility financed by LandBank.
The storage facility is owned and managed by Argo Cold Storage, a subsidiary of Argo International Forwarders Inc. and can accommodate up to 450,000 bags of onions.
Farmers from Nueva Ecija and neighboring provinces benefit the most from Argo Cold Storage’s services, which help prolong the shelf life of onion produce and reduce post-harvest losses due to insect infestation.
“Now, farmers can increase their onion production and ensure that their products are in safe custody through our cold storage services,” said Argo Cold Storage and AIFI chairman Efren Patron Zoleta Jr.
LandBank has been supporting Argo Cold Storage and AIFI to expand its operations since 2017, aimed at helping onion farmers from Nueva Ecija to sell their produce at a competitive market price and generate higher income.
The Argo Cold Storage and AIFI also have an existing loan or credit line with the bank to finance additional working capital requirements.
Argo Cold Storage and AIFI also contribute to local job generation by employing more than 120 regular workers, porters and sorters to facilitate the end-to-end operations of the cold storage facility.