MANILA, Philippines – State-owned Land Bank of the Philippines expects to increase its loans coursed through rural banks to provide more people in the countryside greater access to funds.
Landbank president and CEO Gilda Pico said “we would be jacking up our loans to rural banks”.
Declining to specify as to how much the increase would be, Pico noted that as of April 2013, Landbank’s loan portfolio to rural banks amounted to P7 billion.
At the same time, Pico has vowed to look into complaints that some banks, including Landbank, tend to unfairly compete with rural banks in capturing local government units (LGUs) accounts.
“We will discuss this with concerned rural banks. Landbank has always been a partner of rural banks in serving the countryside,” she said.
“We have been giving the RBs loans through the years. We have to resolve this issue because rural banks are our partners,” Pico added.
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It was learned that some LGUs normally request the government financial institutions (GFIs) and some commercial banks to offer a so-called consolidated loan package which also carries lower interest rates than that of rural banks.
Included in the consolidated loan package of GFIs, it was noted, are salary loans to government employees which apparently are also being eyed by the RBs.
During an open forum at the 60th Annual Convention of the Rural Bankers Association of the Philippines (RBAP), Bangko Sentral ng Pilipinas (BSP) deputy governor Nestor Espenilla said they would also look into this matter.
“As I understand, the government has an external discussion with GFIs in what areas they should complement with the private sector players. We will discuss this again with the GFIs and the RBs. The BSP would be happy to be a venue to resolve this issue,” he said.