State-owned Development Bank of the Philippines (DBP) is collaborating with local chief executives and the Department of Finance in coming up with a package of financial assistance to help local government units (LGUs) bounce back from the crippling effects of the pandemic, a top official said.
DBP President and Chief Executive Officer Emmanuel G. Herbosa said the package includes subsidies on interest payments on new loans to the LGUs as well as funding support to affected industries in their constituencies.
“DBP recognizes that LGUs are the fulcrum of inclusive development,” Herbosa said. “We are one with them in formulating responsive actions that would hasten response and recovery efforts despite prevailing challenges.”
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 bank caters to LGUs as a niche market, providing credit and advisory service to projects that spur the local economy. As of end-June, DBP has disbursed P35.95-Billion in loans to 349 LGUs nationwide.
Herbosa said the bank is working towards unifying its initiatives under one umbrella loan program that would serve as the platform for the National Government’s stimulus package for LGUs.
He said that with the anticipated release of stimulus funds under the recently-enacted Republic Act No. 11494, or the Bayanihan to Recover As One Act, DBP can offer LGUs loan packages at lower interest and longer payment terms of up to 15 years.
“These types of interventions would greatly benefit lower-tier LGUs, as they scale up social and economic interventions for their constituents and boost their resiliency against future downturns,” Herbosa said.