DAR chief lauds debt moratorium of LandBank

Agrarian Reform Secretary John R. Castriciones lauded the Land Bank of the Philippines (LandBank), where he sits as director, for the bank’s initiatives to cushion the impact of the coronavirus disease 2019 (Covid-19) on small farmers, particularly those who receive parcels of land under the Comprehensive Agrarian Reform Program.

Castriciones, in particular, lauded fellow director and LandBank President and CEO Cecilia C. Borromeo, “as she works to comply with the statutory mandate of the Bayanihan Act and the various instructions of the President on the requisite social amelioration measures under the national health emergency.”

As the nation confronts the challenges wrought by the Covid-19 virus, the LandBank’s Board of Directors passed a resolution on March 31 imposing a 1-year moratorium on the amortization payment of agrarian reform beneficiaries (ARBs).

The Landbank resolution was passed to assist the ARBs as they face economic difficulties brought about by the implementation of the enhanced community quarantine.

Under the Comprehensive Agrarian Reform Law (CARL), agricultural lands are distributed to qualified tenants, farmworkers, and tillers. Landowners are paid the just compensation of their lands. ARBs pay to the LandBank their awarded lands for thirty years with interest at six percent per annum. The recent LandBank resolution suspends the obligation of the ARBs to pay the amortization for one year.

The LandBank Board also approved a 30-day grace period for loans with principal and/or interest falling due within the lockdown period without incurring interest on interest, penalties, fees and other charges. It shall not charge or apply interest on interest, fees and charges during the 30-day grace period to future payments and/or amortizations of the individuals, households, micro, small and medium enterprises and corporate borrowers.

The bank has said it will also extend an emergency loan to local government units (LGUs). The LGUs, including those whose IRA are not yet with Landbank, are eligible to borrow, according to the bank.

The eligible purpose is permanent working capital as an additional source of fund for the provision of goods and services.

The amount that an LGU may borrow will be based on the actual request of the LGU provided the total loan exposure (including the proposed emergency loan) will not exceed the net borrowing capacity of the LGU per Bureau of Local Government Finance.

Loans under this program shall have an affordable interest rate of 5-percent per annum, fixed for the term of the loan. The loan shall be payable up to a maximum of five years and shall be further based on the LGU’s cash flow with a maximum of a 1-year grace period on principal payment.

Source: https://businessmirror.com.ph/2020/04/06/dar-chief-lauds-debt-moratorium-of-landbank/