CASH-STRAPPED local government units may avail credit financing window of the government-owned Land Bank of the Philippines but only for recovery economic projects.
In a statement, the Department of Finance (DOF) called on LGUs to seriously consider tapping LBP’s P300-billion credit financing offer, which has so far been secure by a small fraction of provinces, cities, and municipalities.
To date, the LBP still has some P180 billion for LGUs to borrow at 10-year terms at an interest rate of 4 to 4.5%.
“I want to point out that the actual borrowings of LGUs are far below their capacity. They have only borrowed less than half. There is a lot of capacity, but there is no utilization of that capacity,” Finance Secretary Carlos Dominguez III was quoted as saying in an emailed statement.
“The national economy, after all, is the sum of all our local economies. LGUs are at the frontline of serving vulnerable communities. You are also catalysts for building a new economy while we do all we can to address this global health emergency,” he added.
The statement came as several local governments are reeling in the effects of typhoon Rolly (international name: Goni), previously classified as a super typhoon.
In the same statement, Dominguez also responded to concerns over the interest rate on the loan program for LGUs under the Bayanihan to Recover as One Act or Bayanihan 2 signed into law by President Rodrigo Duterte in September.