BAGUIO CITY – – Entrepreneurs, cooperatives, non-government organizations, and other sectors may avail of windows of assistance from the Land Bank of the Philippines (LBP) for rehabilitation assistance, those severely affected by calamities or for a specific localized program.
LBP CARES Department Manager Jesus Alegre Jr. presented the concept and features of the program among entrepreneurs and concerned sectors in a Cordillera Business Forum on Micro, Small and Medium Entrepreneur (MSME) Development and Disaster Resilience spearheaded by the Department of Trade and Industry – Cordillera Region (DTI-CAR).
Tagged as “Calamity Rehabilitation Support or CARES Program,” it is a rehabilitation assistance program available to existing and new customers who have been severely affected by the calamity in areas that were declared under the state of calamity by the Office of the President or the local government unit, or for an umbrella program from where a specific localized program may be created as the circumstances calls for, Alegre explained.
CARES serves as the bank’s ready program every time there is a calamity, either natural or man- made. It supports government’s continuing effort to restore economic and social activities and accessibility in affected areas. Likewise it assists both the local government and private sector in their respective rehabilitation efforts, he added.
The program consists of two features, rehabilitation through loan restructuring and rehabilitation credit program for SMEs, LGUs, coops, NGOs, credit facilities such as rural banks, and home buyers.
In the rehab through loan restructuring, it may be used for additional or new financing as working capital and/or other expenses to rehab or restore damaged facilities or structures. It may also be a rehab of loan take-out from other financial institutions which covers up to the outstanding balance of the principal.
The repayment varies for short term or term loans, meaning loans for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.
For short term loans, this may be repaid up to five years inclusive of maximum one-year grace period on both principal and interest payment. The total amount of one year deferred payment on interest shall be non-interest bearing, and shall be amortized monthly for three years, starting at the end of the first month after the one-year grace period on interest payment.
For term loans, the repayment can be extended for additional five years over the remaining term of the loan at the time of calamity with a maximum grace period of three years on principal repayment and a maximum grace period of one year on interest payment.
The interest rate depends on the LBP’s rate at the time of availment which may be paid monthly, quarterly, semi-annual or annual based on the cash flow of the project available within two years from the date the area was declared under a state of calamity.
As to the credit program for SMEs, the loan may be used for repair of existing facilities, purchase or acquisition of a new one or augment working capital requirement. Interest rate depends on LBP’s lending rate at the time of availment.
Repayment if for repair of existing facilities, acquisition of new facilities or for take-out loan is up to 10 years with maximum grace period of one year on both principal and interest payment. But for working capital, repayment will be up to 10 years with a maximum grace period of one year on both principal and interest payment.
This could be availed within two years from the date the area was declared under state of calamity. Borrower may opt for monthly, quarterly, semi-annual or annual basis based on cash flow of the project.
For home buyers, the purpose must be for repair of existing housing units or construction or purchase of new ones. Interest rate depends on LBP’s lending rate at the time of availment.
The amount is based on the borrowing capacity of borrower, amount applied for actual need or appraised value of project.
For repair of existing housing units, maximum of 10 years inclusive of six months grace period on principal provided combined age of principal borrower and the loan shall not exceed 65.
For construction or purchase of housing units, maximum of 20 years inclusive of one year grace period on principal provided the combined age of the principal borrower and the loan term shall not exceed 65.
For further details, visit the nearest LBP branches. **JDP/SCA-PIA CAR, Benguet
