THE Land Bank of the Philippines (LANDBANK) approved loans totaling P62.32 billion for 194 local government units (LGUs) nationwide under its RISE-UP LGUs (Restoration and Invigoration package for a Self-Sufficient Economy towards UPgrowth for LGUs) Lending Program. Of this amount, P1.89 billion has been released to 32 LGUs as of Feb. 2, 2021.
The RISE UP LGUs Program aims to provide the necessary funding requirements of provincial, city, and municipal LGUs to revive their local economy and recover from the adverse impact of the coronavirus disease 2019 (COVID-19) pandemic.
The Program was launched in July 2020 in partnership with the Union of Local Authorities of the Philippines, with the participation of the Leagues of LGUs, namely the League of Provinces of the Philippines, League of Cities of the Philippines, and League of Municipalities of the Philippines.
Since then, the program has gained wide acceptance by LGUs that the state-run bank has increased its fund allocation from the initial P10 billion to P80 billion to accommodate the rising number of loan applications.
Through the RISE-UP LGUs Lending Program, LANDBANK finances COVID-19 response and recovery interventions, including but not limited to the purchase of agricultural produce, acquisition of equipment, and construction of facilities for linking of products to the market, and other programs and projects of the LGU that provide basic and support services, social welfare, healthcare, and other infrastructure activities.
“LANDBANK recognizes the crucial role of LGUs in the whole-of-nation approach to recover from the economic downturn caused by the pandemic. We are fully committed to finance local development projects toward generating jobs and jumpstarting the local economy,” said LANDBANK President and Chief Executive Officer Cecilia Borromeo.
Interest rate subsidy
The National Government, through Republic Act No. 11494 or the “Bayanihan to Recover as One Act”, is providing P1 billion in Interest Subsidy Fund (ISF) for LGU loans obtained from LANDBANK, which may be availed until Dec. 31, 2022, unless otherwise earlier depleted.
The interest subsidy is subject to a maximum limit of two percent per annum of the approved loan amount or P10 million per province and city, and P5 million per municipality, whichever is lower.
Applying the interest subsidy to the RISE UP LGUs Lending Program, outstanding and succeeding loan releases to LGUs until Dec. 31, 2022 or the depletion of the ISF, whichever comes earlier, will be subject to a fixed interest of four percent per annum inclusive of the two percent per annum subsidy from the National Government. Thereafter, the interest shall remain to apply but without any subsidy from the national government.
LANDBANK is therefore encouraging LGUs to promptly draw on their approved and enrolled loans under the RISE UP LGUs Lending Program and take advantage of the interest subsidy.(LANDBANK)
