Amid the prevalence of African Swine Fever (ASF), state-run lender Land Bank of the Philippines (LANDBANK) has doubled its credit commitment to the local swine industry from P15 billion to P30 billion.
This, according to the bank, will help local pork producers and feed millers to repopulate and stay in operations amid ASF.
The move came after Finance Secretary and LANDBANK Chairman Carlos Dominguez III ordered the state lender to double its support for hog raisers, feed millers, and other industry players dealing with supply shortfalls and retail price spirals of pork products.
“The LANDBANK is taking steps to ease the supply and price pressures with additional funding support for distressed stakeholders, as the steep rise in pork prices is partly responsible for the current elevated inflation that has exacerbated the daily woes of Filipino consumers amid the pandemic,” Dominguez said.
The funds will be available under the LANDBANK SWINE (Special Window and Interim Support to Nurture Hog Enterprises) Lending Program for commercial hog raisers registered as cooperatives or farmers’ associations, small and medium enterprises (SMEs), and large enterprises or corporations.
In March this year, LANDBANK partnered with the Department of Agriculture (DA), launched the SWINE Lending Program to support the local hog industry amid threats from the ASF outbreak and assist hog raisers in sustaining and increasing pork production.
As of April 15, LANDBANK said it was already processing six loan applications under this program. The applications, with a combined requirement of P2.96 billion, came from different areas in the country, namely Tarlac, Cavite, Rizal, Bukidnon, and South Cotabato.
Loans under this program shall be used for swine production, which includes the acquisition or importation of semen or breeding animals; feed milling operations; the construction, improvement, or retrofitting of necessary facilities that are compliant to biosecurity protocols of DA, the industry, or integrators; acquisition of fixed assets; and as working capital.
Eligible borrowers may avail of a short-term loan line or a term loan for up to 80 percent of their total project cost or financing requirement, with an affordable fixed interest rate of 3 percent per annum for three years, subject to annual repricing thereafter.
Under the program, short-term loans have a tenor of one year; term loan for permanent working capital is payable up to five years; and fixed asset acquisition is payable based on the cash flow or payback period of the project, with a grace period on the principal and interest.
The DA, for its part, will provide the list of eligible program borrowers and assist them in the preparation of a business plan, enrollment in the Philippine Crop Insurance Corp. (PCIC), and in securing necessary permits.
The DA will also provide loan recipients trainings on biosecurity management and breeding or rearing of hogs, while engaging the services of different organizations in capability building and implementation of biosecurity protocols.
Dominguez’ recent directive to LANDBANK came after local hog raisers and farmers’ groups expressed concerns against the government’s move to cut tariff on imported pork, which was done in a bid to bring down the cost of the commodity.
Since the start of this year, the price of pork has been on an uptrend. It only went down during the first few weeks of the implementation of price cap under Executive Order (EO) 124, but it eventually trended higher again.
EO 124, which took effect on February 8 and expired on April 8, imposed a price ceiling of P270 per kilogram (/kg) for pork kasim and P300/kg for pork liempo.
As of Tuesday, the prevailing price of pork kasim at select markets in Metro Manila stood at P370/kg, while it is P380/kg for pork liempo, based on DA’s price monitoring report.
To ease the burden of local producers and sellers, the government didn’t extend EO 124, and decided that the price ceiling that has been imposed under this EO will only be applied to imported pork.
At the same time, in hopes to augment pork imports, President Duterte signed EO 128, which reduced import tariff for fresh, chilled or frozen pork both outside and under the minimum access volume (MAV) quota.
National Economic Development Authority (NEDA) Undersecretary Mercedita Sombilla said such a move will bring down local pork prices from the current P400/kg to P224/kg.
But Kilusang Magbubukid ng Pilipinas (KMP) did not buy the estimates, pointing out that pork prices continued to increase even during peaks in pork importation, such as in 2010, 2014, and 2018.