Finance Secretary Carlos Dominguez III announced that the Land Bank of the Philippines has begun implementing a Japan-funded $40 million (P1.76 billion) project that aims to jumpstart agribusiness investments and raise farmers’ incomes in the Autonomous Region in Muslim Mindanao (ARMM) and other conflict-affected areas in the southern Philippines.
The loan agreement for this program—the Harnessing Agribusiness Through Robust and Vibrant Entrepreneurship Support of Peaceful Transformation (HARVEST)—was signed between the LandBank and the Japan International Cooperation Agency (JICA) last January 12, 2017, and based on documents from JICA, became effective on June 9, 2017.
“The HARVEST program which we signed with (JICA) a few months ago is now ongoing,” Dominguez said at a recent briefing in Malacanang. “The terms (of the loan agreement) are very, very liberal. The interest rates are extremely low so you can almost say they are ‘semi-grants’.”
The HARVEST program is included in the list of projects with an indicative total cost P315 billion that the Philippines has proposed for financing by Japan during the second meeting of the Philippine-Japan high level joint committee on infrastructure development and economic cooperation held recently in Manila.
The loan deal for the HARVEST program was among the agreements signed between Manila and Tokyo during Japan Prime Minister Shinzo Abe’s two-day visit to the Philippines last January.
On top of the proposed loan, JICA intends to provide a technical grant of about $6 million (about P290 million) to support projects of eligible beneficiaries of HARVEST and other initiatives that will help improve farming techniques and raise farmers’ incomes in the ARMM.
The loan offers a very low interest rate of 1.4 percent per annum with a repayment period of 18 years and a seven-year grace period, for a total maturity period of 25 years.
HARVEST, which will be implemented by the Landbank from 2017 to 2022, aims to open a lending window for agribusiness ventures and other related investments in ARMM and other conflict-affected areas in Mindanao.
According to the DOF, loans funded under the HARVEST project will be made available to large agribusiness enterprises, farmers’ organizations or cooperatives, micro, small and medium enterprises (MSMEs) as well as “corporatives” or corporation-managed farms supported by the Landbank in ARMM and other conflict-affected areas.
Projects that are sourcing products or goods from the ARMM and other covered areas as part of a value chain are also qualified to borrow under the HARVEST program.