Monday, May 12, 2008 LBP offers loans for infra projects
TO realize its vision of assisting local government units (LGUs) in bringing developments to their people, the Land Bank of the Philippines (LBP) is now inviting towns and cities in the province to apply for loans for various infrastructure or even income generating and social service projects.
Vivian Manuel-Cañonero, lending center head of LBP-Negros, said LBP is now committed to help LGUs all throughout the country to fasttrack the implementation of infra projects like farm-to-market roads, among others.
"LBP is also willing to provide LGUs loans for income generating and social services projects such as public markets, port facilities, irrigation, water system facilities and slaughter houses," Cañonero added.
At present, she said LBP is the biggest provider of loans to LGUs with P28.4-billion granted to 647 LGUs all over the country.
In Negros Occidental, a total of P2.6 billion had been released to 17 LGUs, including the province of Negros Occidental, for various projects.
"That's why we are still on a road show now to invite other Negros LGUs to avail of loans from us to implement more projects in their localities," Cañonero stressed.
She cited Republic Act 7160 at the Local Government Code of 1991, which states that "any LGU may avail of credit facilities to finance local infrastructure and other socio-economic development projects in accordance with the approved local development plan and public investment program of the LGU."
Negros Occidental has 32 towns and cities, including Bacolod as the capital city.
Cañonero, however, explained that loan amount to be extended to the qualified LGU shall be up to the net borrowing capacity of the LGU but in no case shall it be lower than P50 million.
Asked of the interest rate, she said: "It will be the prevailing market rates or interest rates offered under the special financing programs."
As to loan requirements for eligible projects, Cañonero said an LGU should prepare feasibility studies and detailed engineering design for a certain project.
It also has to submit a list of infra projects listed in its Development and Investment Plans, purchase equipment that will complement existing or new infra projects and have at least three sub-projects to be considered for funding.
Documentary requirements include the council resolution authorizing the local chief executive to negotiate a loan with LBP; approved budget for the current year; audited financial statement for the past three years; list of elected officials and key officers; list of priority projects to be funded by the loan; schedule of IRA (Internal Revenue Allotment) release for the past two years; copy of Municipal Development Plan and Public Investment Program; Bureau of Local Government Finance (BLGF) certification on net borrowing capacity for current year and other standard documentary requirements of the LBP.
For projects involving construction, she said an LGU needs to have project plans and specification, cost estimates, bill of materials and work program/s schedule duly approved by the local chief executive and the city/municipal district engineer.
Cañonero said availability period of the approved loan will take at least three years, provided that at least, one project is started within the first year of the approval of facility.
As to the repayment term, Cañonero said in the purchase of equipment, it should be five years with two years grace period on principal while for the construction, improvement or rehabilitation, it would be seven years also with two years grace period on principal.
For financing mixture of certain project, she said: "It will be 25 percent LGU equity and 75 percent LBP portion."(Erwin Ambo Delilan)
