DBP loans to LGUs affected by the pandemic reached P36B in the first half, and will increase even more

The Development Bank of the Philippines (DBP) has committed to lending more funds to provinces, cities and municipalities in coordination with fiscal authorities as part of efforts to help local government units (LGUs) recover from the effects. devastating events from the coronavirus pandemic.

This was stated by the president and executive director of DBP, Emmanuel Herbosa, who revealed that the state lender had so far signed loans worth 36,000 million pesos to 349 LGUs throughout the country in the first half of 2020, a figure that is expected to increase once the bank’s second half of the loan operations are accounted for.

The new package includes subsidies on the payment of interest on new loans to LGUs, as well as financial support to affected industries in their districts.

“DBP recognizes that LGUs are the linchpin of inclusive development,” Herbosa said. “We are one with them in formulating response actions that would accelerate response and recovery efforts despite prevailing challenges.” DBP is the seventh largest bank in the country in terms of assets.

It serves LGU as a market niche, providing credit and advisory services to projects that stimulate the local economy.

Herbosa said the bank was working to unify its initiatives under a comprehensive loan program that would serve as a platform for the national government’s stimulus package for LGUs. He said that with the early release of stimulus funds under the recently enacted Bayanihan to Recover As One Act, DBP could offer LGU loan packages at lower interest rates and longer repayment terms of up to 15 years.

“These types of interventions would greatly benefit lower-level LGUs, as they expand social and economic interventions for their constituents and increase their resilience in the face of future recessions,” Herbosa said. Earlier this year, DBP unveiled its interest rate subsidy program that covers loans to LGUs that would be used for economic and social development projects seeking to mitigate the adverse effects of the pandemic.

Herbosa said that DBP, along with Land Bank of the Philippines, had allocated P1 billion each under the government’s second stimulus bill to provide subsidies on the payment of interest on new and existing LGU loans as they implement their respective COVID-19 response and recovery efforts.

DBP’s efforts are oriented towards four strategic sectors: infrastructure and logistics; micro, small and medium enterprises; social services and community development and environment.

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