The Land Bank of the Philippines said loans to the entire agriculture value chain may hit P825 billion by the end of 2024, with the growing requirements for public rural infrastructure and sustainable green projects.
This would represent a 9 percent increase than the outstanding loans extended by the state bank of P755.1 billion by the end of 2023.
As of the third quarter of 2023, Landbank extended P614.8 billion loans driven by strategic financing for agriculture and fisheries production, sustainable projects and public rural infrastructure under the Agriculture, Fisheries and Rural Development (AFRD) Financing Enhancement Act of 2022.
In 2022, the bank’s outstanding loans to agriculture stood only at P261.7 billion.
The bank said it is “not accurate” to compare its end-2023 outstanding loans to the figure in 2022 as the firm had introduced a different counting method last year.
“It’s a different computation than our figures on agri loans in previous years,” said Pamela Nuyles, Landbank corporate communications specialist.
In an earlier statement, the bank said it is now following a new computation following the requirement under the AFRD Financing Enhancement Act of 2022.
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.
The bank said the loan exposure of P755.1 billion as of 2023 represents 51 percent of its current total loan portfolio.
“As Landbank’s role in nation-building continues to expand, our commitment to advancing countryside development has remained steadfast. Through accessible financing and support interventions, we are empowering communities and enriching lives, while boosting the national government’s inclusive and sustainable development agenda,” said Lynette Ortiz, the bank’s president and chief executive officer, in a statement.
Of the amount extended as of 2023, P255.2 billion was to be used to finance AFRD- backed rural infrastructure projects, such as public markets, highways and transport systems.
Another P186.3 billion went to sustainable projects designed to mitigate climate
change and promote responsible resource management while P118.1 billion has been allotted for the processing of fisheries and agri-based products and farm inputs.
Efforts toward modernizing farming practices and business processes were dedicated with a P70 billion boost while off-farm and fishery entrepreneurship received P61.6
billion as projects promoting the health and wellness of agri players and beneficiaries were allocated P43.4 billion.
The rest of Landbank’s AFRD financing covers various aspects of the agri value chain, including marketing, processing, distribution, shipping and logistics, storage of agricultural and fishery commodities, construction, acquisition and repair of facilities, agri-tourism and agricultural mechanization, among others.
