Landbank to open P6-B facility for LGUs’ infra projects

The Land Bank of the Philippines is opening this year two credit facilities for local government units (LGUs) worth P6 billion to fund infrastructure projects of local government units (LGUs).

Landbank president Gilda Pico said the first P1-billion credit facility will be under the bank’s LGU Investment Program (LIP) which it is jointly financing with the Kreditanstalt fur Wiederaufbau (KfW), a multi-lateral agency.

Under the program, LGUs can avail of loans for developmental projects such as construction of farm-to-market roads and bridges, ports, sanitation and flood control system, water supply, public markets and bus terminals.

Other projects qualified for financing include rehabilitation of public facilities like hospitals, schools and parks.

The bigger P5-billion loan which will be available within the year is the World Bank-financed Support for Strategic Local Development Investment (S2LDI).

It is a $100-million financing package aimed at improving the living conditions, public health standards and urban environment of participating LGUs through the provision of upgraded and improved urban infrastructure and services.

Specifically, the S2LDI will address the requirements of LGUs for the construction, upgrading and rehabilitation of basic urban and rural infrastructure facilities in support of the National Government’s Medium Term Philippine Development Plan.

The projects eligible for financing include water supply, power production and distribution, solid waste management facilities including the construction of sanitary landfill and water treatment. Construction of housing projects, slaughterhouses, health clinics and transport centers is also qualified under the program.

Pico said these new financing programs should boost the access to credit of LGUs nationwide.

"The LGUS are development partners and they have a critical role in spurring economic activities in the countryside. Their function of delivering basic services to the public dovetails with our goals to also stir more livelihood activities in the countryside," said Pico.

Last year, the share of loans for agri-infrastructure projects of LGUs increased to P12.4 billion from P11.5 billion, while the share of loans for agri-related projects of government-owned and controlled corporations reached P10.1 billion.