DA, LandBank form P15-B lending program
The Department of Agriculture (DA) and the Land Bank of the Philippines (LandBank) signed on Wednesday an agreement on a new, P15-billion lending program for African swine fever (ASF)-hit hog raisers to help them improve their output.
The program, called the Special Window and Interim Support to Nurture Hog Enterprises (Swine) Lending Program, will be available for commercial pig raisers registered as cooperatives or farmers’ associations, small and medium enterprises (SMEs), and large corporations.
“LandBank is supporting the DA by extending financing support to hog enterprises to sustain their operations and pork supply during this difficult time,” LandBank President and Chief Executive Officer Cecilia Borromeo said.
“Through the LandBank Swine Lending Program, we aim to respond to the recovery requirements of our hog industry and contribute to ensuring food security,” she added.
Loans under the program shall be used for swine production. This includes the acquisition or importation of semen or breeding animals; feed-milling operations; the construction, improvement or retrofitting of necessary facilities that are compliant with the biosecurity protocols of the DA, the industry or integrators; acquisition of fixed assets; and as working capital.
Eligible borrowers may avail themselves of a short-term loan line or a term loan for up to 80 percent of their total project cost or financing requirement, with an affordable fixed interest rate of 3 percent annually for three years, subject to yearly repricing thereafter.
The loans shall have a tenor of one year. Term loan for permanent working capital is payable up to five years, while fixed-asset acquisition is payable based on the cash flow or payback period of the project, with grace period on the principal and interest.
Under the agreement, the DA will provide the list of eligible program borrowers and assist them in preparing business plan, enrolling in the Philippine Crop Insurance Corp. and securing the necessary permits.
The department will also train the loan recipients on biosecurity management and breeding or rearing hogs while tapping the services of different organizations in capability building and implementing biosecurity protocols.
For its part, LandBank will accept and evaluate the loan applications of eligible borrowers and facilitate the release of loans. It will also monitor the program’s performance and send monthly reports to the DA.
The program will run until Dec. 31, 2026, in line with the DA’s hog repopulation plan.
Under Republic Act 10000, or the “Agri-Agra Reform Credit Act,” banks are required to allot at least 15 percent of their total loanable funds to farmers and fishermen, and 10 percent to agrarian reform beneficiaries.