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Manila Bulletin devider Business devider DBP offers P1-B loan subsidies to LGUs

DBP offers P1-B loan subsidies to LGUs

Published Dec 10, 2020 02:18 pm

The Development Bank of the Philippines (DBP) is granting P1 billion interest rate subsidies for local government unit (LGU) loans covering pandemic-related projects.

The government, under its Bayanihan 2 fund, allotted P1 billion each to the DBP and the Land Bank of the Philippines to subsidize interest payments on new and existing loans of LGUs in their COVID-19 response and recovery efforts.

With the release of stimulus funds under Bayanihan 2, DBP could offer LGUs longer repayment terms of up to 15 years, at a lower interest of 4 per cent per annum, half of which will be subsidized by the National Government’s stimulus funds until December 31, 2022.

“DBP recognizes that LGUs are the fulcrum of countrywide development," remarked President and Chief Executive Officer Emmanuel G. Herbosa.

DBP President and Chief Executive Officer Emmanuel G. Herbosa

“We are one with them in our action to hasten recovery efforts despite prevailing challenges," he noted.

The grant of the subsidy would be on a “first-come, first-serve basis”.

The interest rate subsidy cap will be computed based on the approved loan amount or a P10-million cap for provincial and city LGUs, and P5-million cap for municipalities.

"DBP shall continue to work with the National Government in coming up with these types of interventions benefiting lower-tier LGUs, boosting their resiliency against economic downturns," Herbosa pledged.

DBP is the seventh largest bank in the country, in terms of assets, and provides credit support to four strategic sectors of the economy – infrastructure and logistics; micro, small and medium enterprises; social services and community development; and the environment.

The four strategic sectors fall under the DBP Assistance for Economic and Social Development (ASENSO) for Local Government Units (LGUs) Financing Program.

This is the bank's banner program supporting LGUs' initiatives on market infrastructure development and improvement, social welfare, health care, and other public infrastructure projects.

It also serves as the main platform to implement the interest subsidy program of the National Government.

Funding for the Interest Subsidy Fund is part of Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan 2) which President Rodrigo R. Duterte signed into law last September.

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dbp covid-19 DBP LOAN SUBSIDIES FOR LGUs
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