The additional P27.5-billion equity infused into state-run Land Bank of the Philippines (Landbank) will be injected into existing and upcoming loan programs for small businesses badly hit by the pandemic-induced recession, an official said.
In a telephone interview on Wednesday, Landbank vice president and corporate affairs group head Vivian Cañonero said the Bayanihan to Recover as One Act or Bayanihan 2 Law had set aside the additional capital for lending programs geared toward micro, small and medium enterprises (MSMEs) in a bid to revitalize the economy.
Besides direct MSME loan programs, lending will also be coursed through partners such as local government units (LGUs) and countryside financial institutions or rural banks, she said.
Cañonero said Landbank was working on new MSME loan programs with even lower interest rates, but she declined to provide details pending their approval.
The official said the Bayanihan 2 funding would nonetheless be also injected into ongoing programs such as the P10-billion I-Rescue (interim rehabilitation support to cushion unfavorably affected enterprises by COVID-19) loan program, which slapped only 5 percent a year on borrowings that will cover up to 85 percent of working capital needed by cooperatives, microfinance institutions, and MSMEs.
Also, Landbank’s P10-billion RISE UP LGUs (restoration and invigoration package for a self-sufficient economy toward upgrowth for LGUs) lending program will be augmented by the capitalization support, she added.
Cañonero said based on Landbank’s projections, the fresh P27.5-billion equity could benefit an additional 11,099 MSMEs, which would, in turn, generate livelihoods for 66,594 households.
In all, the additional funding would help about 279,000 individuals resume their businesses or get employed, she said.