LandBank defies DU30 directive

LandBank should go back to land. Why are you mired in so many commercial transactions?

State-owned Land Bank of the Philippines (LandBank) may have violated a direct order from President Rodrigo Duterte to refocus on agricultural lending after baring a credit program for businesses in putting up their own sewage treatment plants.

Mr. Duterte wanted LandBank to increase its loans to farmers who direly needed financing but it has offered a new program for business firms instead.

The recently announced loan package came after Mr. Duterte threatened to abolish the institution for giving priority to commercial banking instead of focusing on its mandate of farm financing.

As of August 2019, commercial loans of the bank amounted to P524.86 billion and only a third of that amount, P177.32 billion, went to loans that support the agriculture and fisheries sector.

“LandBank should go back to land. Why are you mired in so many commercial transactions?” the President said in his State of the Nation Address (SoNA) last July.

“It should go back to the purpose for which it was created and that is to help the farmers,” he added.

Landbank recently offered a credit scheme for companies to set up water treatment facilities, which is a function of concessionaires Maynilad Water Services Inc. and Manila Water Co. Inc.

The President told the Daily Tribune in a pre-State of the National Address (SoNA) interview that the two water firms were duping the public for collecting sewage fees in monthly bills but have not built treatment facilities.

According to LandBank, local government units, any business registered with the Securities and Exchange Commission and cooperatives may apply for the loan to procure materials for sewage treatment, sanitary landfills and other pollution-reducing systems.

Businesses can also borrow money to purchase garbage trucks and equipment for clean energy through the scheme.

Business that are qualified for the loan include those which have an office or establishment located in an area where wastewater goes directly to bodies of water that contribute to the pollution of Manila Bay and companies included in the government’s list of Manila Bay polluters.

The borrowers should also have the capacity to repay loans based on its cash flow and should prove that it has “been operating profitably in the last three years.”

In his SoNA, Mr. Duterte noted that the government financial institution is called Landbank, but “you are now the number one commercial bank in the Philippines.”

He warned the bank to show him a reasonable plan for agricultural financing or be “reconfigured.”

“I am asking now Congress… if there is no viable plan for the farmer and it is all just commercial transactions, I might as well abolish it and give the money to the congressmen for their development funds,” he added.

“What the heck is happening to you? You are supposed to finance agricultural enterprises and endeavors which is not happening,” according to the President.

The President said that Landbank should be active in the promotion of farm cooperatives and lending programs.

“Help in the setting up of cooperatives if there is none, help them in forming one,” he added.

“See if you can offer financing to revive the coconut industry, maybe you can use money from the coconut levy,” Mr. Duterte added.

“That is sacred money… LandBank should go back to land? Why are you mired in so many commercial transactions? Bumalik kayo (Return) where you were created for. And that is to help the farmer,” he said.

Similarly, in the pre-SoNA interview, Mr. Duterte said he wanted to return LandBank to its role for which it was created during the term of former President Ferdinand Marcos.

LandBank was formed on 8 August 1963 as part of the Agricultural Land Reform Code. It was mandated to help with the purchase of agricultural estates for division and resale to small landholders and the purchase of land by agricultural lessee.

“With enough money, and if it’s really intended to be used for the benefit of the farmers in the agricultural sector, then that money can be put to good use, but it has to be supervised strictly,” the President mused.

“It started good, the program was good, but along the way, it fails either due to corruption or simply, the money is gone. And that goes for all,” he noted.

He also indicated the risks that go with relying on cooperatives for the financing programs.

“This is not a new experience. There are cooperatives in which the president, the idiot, just runs away and steals all the money,” he said.

“There is not enough protection given to farmers and that is why I said that I’d like the government to handle the lending to farmers through the Landbank, since I know there is enough good people there to do the job,” Mr. Duterte added.