State-owned Land Bank of the Philippines has the financial capacity to extend funding to farmers, as President Duterte has directed, without sacrificing its plan to have majority stake in Philippine Dealing System Holdings Corp.
“Landbank has sufficient resources for both,” Finance Sec. Carlos Dominguez III said.
On Monday, the President noted that Landbank has entered into “so many commercial transactions” and has overlooked its mandate to finance farmers’ needs.
He, thus, urged Congress to “abolish” the said government financial institution if the latter failed to submit to him by end-July a “viable plan for the farmers”.
He pointed out that the funds that would be collected if Landbank would be abolished can instead be given to Congressmen for their development funds.
Dominguez, in turn, said he is “in regular contact with the executives of Land Bank and have been assured that they are making every effort to finance projects in the agriculture sector”.
“The size of the resources of the Bank as the main depository of government accounts makes it necessary for them to deploy their funds to commercial and industrial projects as well as agriculture projects.”
As of end-March this year, the bank recorded a net income of P4.75 billion, 12 percent higher than the P4.26 billion same period last year and also higher than the P4.16 billion target for the first three months this year.
Landbank president and chief executive officer Cecilia C. Borromeo, who was appointed by Duterte to the position last February to serve the remaining term of former Landbank president and CEO Alex V. Buenaventura until June 30 this year, earlier attributed the hike in the bank’s net income to the big jump of the bank’s loans, by 69 percent year-on-year to P867.32 billion, and investments in financial assets by 43 percent to P6.36 billion.
Total assets in the first quarter this year rose 16 percent year-on-year to P1.89 trillion, deposits went up by 17 percent P1.68 trillion, and total capital rose 26 percent to P136.47 billion.
The Finance chief said Landbank is “also working closely with the Department of Agrarian Reform to hasten the distribution of individual land titles to the beneficiaries as a means of improving their bankability”.
“For your information, the bank also performs critical functions such as distributing funds to Pantawid Pamilya and Pantawid Pasada beneficiaries,” he said.
Relatively, Dominguez said the plan to gain majority share in the Philippine Dealing System Holdings Corp. is still on track, but he did not elaborate further.
Earlier, Buenaventura said the bank’s Board of Directors, on Feb. 27, 2018, gave the go signal to purchase 66.67 percent in PDSHC to further support the government’s bid to deepen the domestic capital market and ensure financial inclusion around the country.
To date, Landbank’s stakes in PDSHC is through the Bankers Association of the Philippines, the third largest shareholder with 829,000 shares or about 13.26 percent of the total.
Landbank has offered to buy the shares of some PDSHC stakeholders such as the Singapore Exchange Ltd, which is the second largest shareholder with stakes accounting for 20 percent of the total.
However, it has yet to get replies from its offers.
Meanwhile, Dominguez said there is no problem on the proposed hike in non-uniformed state workers’ salaries, which Duterte mentioned in this fourth SONA Monday.
“The funds for the salary adjustments are in place,” he added but did not elaborate.