LOCAL government units (LGUs) into upgrading and improving infrastructure and services but without the funds may now access a viable financing option from a facility coursed through Land Bank of the Philippines (LBP).
This was the good news presented by a team of financial experts from the country’s top LGU partner during the recent LBP roadshow during the recent mayors’ meeting at the Bohol Tropics.
This as the government also dangles parallel microfinance loans in an effort to promote living conditions and spur local economies into productivity.
According to Allan Bisnar of the LBP Bohol Lending Center, now an accessible option for towns, utilities operators and even for private sector groups partnering with towns is World Bank funded Support for Strategic Local Development and Investment Project (S2LDIP).
The facility which boasts of US$100M can give as much as the project requires but not more than the borrowing capacity for LGUS, the center manager said.
S2LDIP can shoulder 90% of the project while the borrower puts up the 10% equity, he added.
At a relatively very low 9% for loans with 1-5 year repayment term or up to 11% for maximum term of 15 years plus 2 years grace period, the S2LDIP can be accessed for a variety of development oriented projects.
Eligible project for the loan facility include computerization projects, telecommunications, roads and bridges rehabilitation or construction, sanitation, drainage and flood control systems, water supply projects, public utilities construction, air and sea ports and harbors, waste management projects, power distribution and heavy equipment procurement.
Basic borrowing requirement includes council resolution authorizing the mayors to negotiate a loan with LBP, approved current year budget, audited financial statement for the last 3 years, list of elected officials and key officers, IRA schedule for the past 2 years, project feasibility study, collateral documents and certification of net borrowing capacity form the Bureau of Local Government and Finance.
For those private operators of public utilities intending to avail of the loan, they would need a letter of intent, contracts, audited financial statement for 3 years, board resolution project details and related documents and list of current officers.
Interested LGUs may come to LBP Bohol Lending Center at the New capitol Complex for details, Bisnar said.
More than this, the government has noted that business released has increased by 30 times more than the P3 billion loan level in 2001.
In her State of the Nation Address, President Gloria Macapagal Arro said “in microfinance, loans have reached P102 billion or 30 times more than the P3 billion we started with in 2001.
Moreover, she cited a record 98-percent repayment rate, which the major micro-finance lenders led by Land Bank has also noted.
The country’s Chief Executive also cited LBP for “quadrupling loans for farmers and fisher-folks.”
Aside from Land Bank, President Arroyo also cited the Peoples’ Credit and Finance Corporation (PCFC) which lent out P8 billion; the National Livelihood Support Fund (NLSF), P3 billion; the Development Bank of the Philippines (DBP), P1 billion; and the DSWD’s Self-Employment Assistance-Kaunlaran (SEA-K) of the Department of Social Welfare and Development (DSWD), P800 million.
The President also thanked the entrepreneurship campaign ‘Go, Negosyo,’ and its creator, Joey Concepcion, “for partnering [with government] to unleash the entrepreneurial spirit…” (rachiu/PIA)
