President Duterte’s all-out support for the Land Bank of the Philippines (LANDBANK) through a capital infusion that is the largest compared to the combined amounts that the institution had received under previous administrations has expanded financial inclusion among Filipinos and provided better services to the underserved sectors of the economy, Finance Secretary Carlos Dominguez III has said.
Dominguez said that at the homestretch of the Duterte administration, LANDBANK’s total equity will have grown to P230.4 billion by end-April, which represents a 160-percent increase from its P88.7-billion capital when the President took office in 2016.
This feat has made LANDBANK the second largest universal bank and the bank with the highest paid-in capital in the country, Dominguez said.
The state-run lender’s financial strength under President Duterte has been used to provide low-interest loans to underserved sectors, especially small farmers and fisherfolk; and extend support to broad sections of the economy, such as healthcare, education, power generation and distribution, water, transportation, and housing, said Dominguez who is also LANDBANK chairman.
He said LANDBANK has extended financing support for the construction of over 200 hospitals and the procurement of more than 20,000 patient beds.
“Early in your administration, I asked for your permission to allow the Land Bank of the Philippines to expand its asset base and scope of services. You not only gave your permission but also your total support to enable LANDBANK to achieve these goals. It is your administration, Mr. President, that has infused the largest amount of capital into LANDBANK compared with the combined amounts under all other administrations,” Dominguez said during LANDBANK’S historic turnover of 1.36 billion shares of common stock to the government.
These new shares of stock in the name of the Republic of the Philippines is worth P136.2 billion. President Duterte received the stock certification from LANDBANK on behalf of the government at Malacañan Palace Monday night.
Dominguez said LANDBANK’s capital increase has been prudently managed and used, as the President instructed, to extend more loans to the agriculture sector.
By year-end 2021, LANDBANK’S loan portfolio for the agriculture sector stood at P247.9 billion, an 80-percent increase from the P137.6 billion in 2015, Dominguez said.
To assist the President in realizing his goal of inclusive and sustainable growth, LANDBANK is also the biggest lender to the local government units (LGUs).
“The robust capital infusion reinforced LANDBANK’s financial strength and allowed it to be an effective partner of the government in advancing its development agenda. We have used that strength to better serve the Filipino people,” Dominguez said.
LANDBANK’S total equity of P88.7 billion in 2015 steadily rose when President Duterte took office, from P152.49 billion in 2019 to P177.64 billion in 2020, and to P207.68 billion in 2021.
“On behalf of the men and women of LANDBANK, I would like to thank you, Mr. President, for the strongest support any President has provided for this institution,” Dominguez said.
Dominguez said LANDBANK’s support to other sectors of the economy “will help revive our enterprises and stimulate domestic economic activity.”
On top of fulfilling its role as a policy bank, Dominguez said LANDBANK also took the lead in modernizing the banking sector by being instrumental in the establishment of the Overseas Filipino Bank (OFBank), officially the first branchless digital-only bank in the country that now serves overseas Filipinos in 116 countries.
“Through your fulfilled promise to our workers abroad, they can now open bank accounts anywhere in the world, conveniently send money to their families, and save as well to grow their hard-earned incomes. They don’t have to go to a branch, they only have to use their cellphone or computer,” Dominguez said.
Dominguez also cited LANDBANK’S successful merger with the financially ailing United Coconut Planters Bank (UCPB) that took effect last March 1.
“I am pleased to report, Mr. President, that it has successfully implemented this merger with no major glitches or problems. Through the merger, we have reduced the risk of around 87 billion pesos in potential losses for the Philippine Deposit Insurance Corp. (PDIC) by putting the financially weak UCPB under the financially strong LANDBANK,” Dominguez said.
He commended outgoing LANDBANK President-CEO Cecilia Borromeo; Executive Vice Presidents Liduvino Geron, Carel Halog, Julio Climaco, Alan Bornas; and Senior Vice President Benjamin Bongolan for their almost three years of hard work and participation in making the LANDBANK-UCPB merger deal happen.
Dominguez said that as the distribution arm of the government’s social protection programs, LANDBANK’S cash transfers of P45.5 billion in 2015 to a total of 4.4 million beneficiaries grew to P133.6 billion in 2021 that benefited 10 million recipients nationwide.
“LANDBANK’s role in this effort served us well during the pandemic. The Bank will be instrumental in cushioning the impact of the Russia-Ukraine conflict for the most vulnerable sectors of the economy, because the amount you approved of 500 pesos per vulnerable family per month for 6 months will be coursed through LANDBANK. They will be the one to distribute the money through the bank accounts,” Dominguez said.
In helping achieve President Duterte’s goal of financial inclusion, LANDBANK provided bank accounts for 7.2 million previously unbanked national ID registrants, and will provide 6.3 million more bank accounts for unbanked Filipinos.
“This is the most effective instrument in building a truly inclusive financial system,” Dominguez said.
“Overall, I am happy to report that LANDBANK continues to be strong, stable and professionally managed,” he added.