Enhanced Environmental and Social Safeguards Relative to Credit Delivery

(Administrative Order No. 26, series of 2018)

LANDBANK strictly pursues continuous improvement in its processes towards the promotion of environmental protection and sustainable development by incorporating environmental best practices to effectively manage its agrarian and banking services and operations.

In line with this advocacy as embodied in the Bank’s Corporate Environmental Policy, the Bank issued Credit Policy Issuance (CPI) No. 2009-002 on March 3, 2018. As the enhanced version of CPI No. 2004-002, this aims to further improve and expand the Bank’s environmental due diligence system which included not only an environmental risks assessment but also climate change vulnerability and social risks assessments on all LANDBANK-financed projects. The policy enhancement covers identification, assessment, mitigation, monitoring of environmental, climate change and social risks, as well as aspects, impacts, and economic, environmental and social benefits of projects financed by the Bank.

The Program’s primary objectives are:

  • To identify, monitor and mitigate credit risks arising from the adverse environmental and social impacts of financed projects by the Bank;
  • To determine and document economic, environmental and social benefits of projects financed by the Bank;
  • To ensure that the Bank’s mission of promoting environmental and social safeguards for sustainable development is achieved, and
  • To make LANDBANK an Equator Principle aligned institution.

During the year, 1,095 Bank employees successfully completed the online technical training on Administrative Order (AO) No. 026 through the LANDBANK’s e-learning Access Portal (LEAP).

Since program implementation from 2004 to December 2019, a total of 4,728 project and account assessments were conducted by the Environmental Program and Management Department, of which 461 were accomplished using the enhanced Environmental Social Due Diligence tool or AO No. 026.

Agricultural Competitiveness Enhancement Fund (ACEF) Lending Program

Through Republic Act No. 10848 or the Agricultural Competitiveness Enhancement Fund (ACEF) Extension Law, LANDBANK is mandated to manage the credit component of the ACEF. The ACEF is a special purpose fund which consists of all duties collected from the importation of agricultural products under the Minimum Access Volume (MAV) mechanism pursuant to the Agricultural Tariffication Act (R.A. No. 8178). 

In coordination with the Department of Agriculture, LANDBANK shall extend credit, with minimal requirements and interest rates, to individual farmers and fishers, agri-cooperatives, associations, and micro and small enterprises to improve their productivity and income.

The ACEF allows LANDBANK to move closer to achieving its mission of financial inclusion. As of December 31, 2019, the Bank’s cumulative loan releases reached P1.04 Billion with outstanding loans amounting to P969.85 Million. These loans financed various projects of 6,912 borrowers comprised of 6,801 small farmers and fishers, 74 micro and small enterprises, and 37 agri-cooperatives and associations.  


Sikat Saka Program (SSP)

Implemented in partnership with the Department of Agriculture since 2012, the Sikat Saka Program provides direct credit to small palay and corn farmers who are not yet members of LANDBANK-assisted cooperatives.

The Program supports the government’s campaign to boost the agriculture sector’s capacity to provide food security for the country which aligns with the Bank’s thrust to help small farmers increase their productivity and income. 

The Program also delivers integrated support services to the Program beneficiaries in terms of market support from the National Food Authority, free irrigation services from the National Irrigation Administration, full crop insurance premium subsidy from the Philippine Crop Insurance Corporation, and training/seminars on credit worthiness and financial literacy which are being facilitated by the Agricultural Training Institute. These interventions helped ensure efficient credit delivery to the target beneficiaries and enhanced the Program’s sustainability.

Since 2012, cumulative loan releases have reached P10.1 Billion. As of year-end 2019, the Bank has released a total of P1.9 Billion to 17,925 small rice and corn farmers with outstanding balance amounting to P1.2 Billion.

Agrarian Production Credit Program (APCP)

Launched in October 2012, the Agrarian Production Credit Program (APCP) is a program tie-up among the DA, DAR, DENR and LANDBANK which provides credit assistance and other support services to agrarian reform beneficiaries (ARBs) and their household members, through their respective organizations, to improve their income and productivity.

The APCP aims to facilitate credit access for the ARBs and support the implementation of Republic Act No. 9700, otherwise known as the Comprehensive Agrarian Reform Program Extension with Reforms (CARPER) Law. It is designed as flexible credit facility for agrarian reform beneficiary organizations (ARBOs) that are not yet qualified to borrow under the regular lending window of the Bank, and as transitory credit window which intends to direct the ARBOs to the regular lending window of the Bank and other formal financial institutions within the prescribed period.

The DAR and DENR mobilize and capacitate the ARBOs and their members to help make them credit-eligible and creditworthy borrowers.

Since the Program started in 2012, cumulative loan releases have amounted to P8.2 Billion. As of December 31, 2019, the Bank has released P1.3 Billion in loans for various projects of 885 ARBO-borrowers involving 68,939 ARB-beneficiaries. Total outstanding loans under the Program stood at P1.8 Billion during the year.

LGU Lending Program

The local government units (LGUs) have been one of LANDBANK’s strongest partners for countryside development. The Bank has been a major credit provider of LGUs all over the country. Through the LGU Lending Program, the Bank caters to the financial requirements of LGUs for the development of local infrastructures and various socio-economic development projects consistent with the approved local development plan and public investment program. 

In 2019, a total of 669 LGUs availed of the Program with total loan releases amounting to P87.7 Billion and outstanding balance of P53.0 Billion.

BUILDERS (Bringing Urbanization and Innovation thru LANDBANK’s Diverse Engineering Resource Support) Program

In support of the fast-growing construction industry amid the country’s high growth performance, LANDBANK launched the BUILDERS (Bringing Urbanization and Innovation thru LANDBANK’s Diverse Engineering Resource Support) Program to provide the needed working capital requirements of duly-licensed contractors to ensure the completion of awarded projects and contracts and pursue expansion of their existing business. Eligible projects include, among others, housing, real estate development, mass housing for calamity-stricken regions, construction/renovation of buildings and offices, acquisition of machineries and equipment, and transport infrastructures. 

The Program released a total of P110.0 Billion in loans to 455 contractor-borrowers with outstanding balance of P35.2 Billion as of year-end 2019.

Health-Progressive Lending for Upgraded Services Program (Health-PLUS)

The Health-PLUS (Progressive Lending for Upgraded Services) Program is LANDBANK’s credit program for the health sector to improve public access to quality and updated medical health goods and services.

In 2019, the Program assisted 182 health facilities resulting in better health care services, additional hospital beds, and state-of-the-art equipment and machineries. Total releases stood at P51.9 Billion with outstanding loans amounting to P22.3 Billion.

RE (Renewable Energy) Lending Program

Complementing the government’s thrust to develop and optimize the use of electricity from renewable sources, consistent as well with the Renewable Energy Act of 2018 promoting the development, utilization, and commercialization of renewable energy sources, LANDBANK introduced the RE (Renewable Energy) Lending Program to enhance access to financing for renewable energy projects. The Program caters to projects such as hydropower, ocean, solar, wind, biofuel, biomass, geothermal and other RE projects.

As of December 31, 2019, the Bank released a total of P12.7 Billion to 52 borrowers with outstanding loans of P9.7 Billion.

Metro Manila Wastewater Management Project (MWMP)

In response to the Supreme Court decision on the clean-up of Manila Bay, LANDBANK executed a Loan Agreement with World Bank on May 31, 2012 in the amount of US$275 Million to finance wastewater management projects under the Metro Manila Wastewater Management Project (MWMP). The loan became effective on October 19, 2012 and the original loan closing date of June 30, 2017 was extended to June 30, 2019. The request for second loan extension to June 30, 2020 and replacement of sub-projects was approved by the NEDA on June 18, 2019 followed by the World Bank on June 28, 2019. This was to ensure loan disbursement of the remaining World Bank Fund and achievement of its project development objectives (PDOs) by the Project’s closing date.

The MWMP is a re-lending program for Maynilad Water Services, Inc. (MWSI) and the Manila Water Co., Inc. (MWCI) to support and increase their coverage of wastewater collection and treatment and septage management. The Project aims to contribute towards the improvement of Metro Manila’s environment which will in turn help in reducing health risks of residents in the area as a result of poor water quality in Manila Bay.

The World Bank’s total fund disbursement under the Project reached USD250.52 Million with total outstanding balance amounting to USD243.80 Million in 2019.

Support Package for Environment-Friendly and Efficiently-Driven PUVs (SPEED PUV) Program

As the government went full speed on its PUV Modernization Program, LANDBANK swiftly empowered transport cooperatives and corporations with resources to acquire jeepneys equipped with modern amenities such as WiFi, CCTV camera, GPS monitor and automatic payment system, which together with other features, will provide better safety and convenience to the riding public.

Under the Support Package for Environment-Friendly and Efficiently-Driven PUVs (SPEED PUV) Program, LANDBANK allocated the initial loan fund of P3 Billion to assist in the procurement of modern jeepneys.

As of year-end 2019, the Bank’s total loan releases reached P303 Million. This accommodated 10 borrowers with outstanding loan balance of P282 Million.

Carbon Finance Support Facility (CFSF)

The Carbon Finance Support Facility (CFSF) is the Bank’s flagship program for climate change-mitigation. The CFSF is the institutionalized response to the worldwide challenge of reducing the impacts of global warming and climate change through the implementation of methane recovery initiatives and programs eligible under the Clean Development Mechanism (CDM).

Through the CFSF, LANDBANK was able to implement a voluntary coordinated action of introducing and supporting projects with CDM-eligibility potentials which could lead to GHG emission reductions, and at the same time, provide incentives through the generation of additional revenue in the form of carbon credits.

One of the CDM Programs developed and registered by LANDBANK with the United Nations Framework Convention on Climate Change (UNFCCC), with assistance from the World Bank (WB), was the CDM Program of Activity (PoA) 6707 – Landfill gas recovery and combustion with renewable energy generation from sanitary landfill sites.

The Program also involves the monitoring and verification of emission reductions (ERs) generated by the subprojects, with one unit of ER being one ton of carbon dioxide equivalent (CO2-e) of methane sequestered and converted into electricity in a given sub-project. Verification is performed following CDM protocols of the UNFCCC. The verified or certified ERs (CERs) have a potential of being monetized when traded with identified carbon buyers in CERs sales and purchase transactions with the World Bank. For crediting period up to 2020, LANDBANK has a negotiated fixed price with World Bank for landfill CERs generated under this Program.

Under CDM PoA 6707, LANDBANK, as a financial and technical intermediary, undertook a voluntary, coordinated action for the construction of landfill gas (LFG) extraction and flaring and electricity generation systems in sanitary landfill sites within the Philippines. The subprojects involved are the two of the largest sanitary landfill sites in the Philippines, namely:

  • Quezon City Controlled Disposal Facility Biogas Emission Reduction Project of Pangea Green Energy Philippines, Inc. (PGEP); and
  • Landfill Gas Recovery and Combustion with Renewable Energy Generation from Sanitary Landfill Sites of Montalban Methane Power Corporation (MMPC).

These landfill sites have a reported combined waste acceptance rate of up to 10,500 metric tons per day. LANDBANK provided carbon finance and investment finance assistance for the installation of LFG collection systems that capture and combust methane gas through flaring or by generating electricity of less than 15MW. It also acted as the coordinating and managing entity in charge of validation and verification activities.

As of end of December 2019, LANDBANK has delivered a total of 106,160 CERs generated by one of the landfill subprojects under this Program. From an environmental perspective, this is equivalent to approximately 68,800 barrels of crude oil consumption avoided.

Harnessing Agribusiness Opportunities through Robust and Vibrant Entrepreneurship Supportive of Peaceful Transformation (HARVEST) Project

The HARVEST (Harnessing Agribusiness Opportunities through Robust and Vibrant Entrepreneurship Supportive of Peaceful Transformation) Project is a JICA-funded project to provide credit and technical assistance to cooperatives, SMEs, CFIs and large agribusiness enterprises in conflict-affected areas in Mindanao, specifically the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), and other areas with economic or commercial linkage to the region through a value chain concept. The project aims to support Mindanao’s peace-building efforts and economic growth.

The Bank’s cumulative loan releases under the Project stood at P1 Billion benefiting 15 borrowers with P795 Million in outstanding loans as of December 31, 2019. 


Agricultural Guarantee Fund Pool (AGFP)

The Agricultural Guarantee Fund Pool (AGFP) is a credit guarantee program initiated by the Department of Agriculture. The Program consists of a pool of contributions from various participating GOCCs and government financial institutions. In support of the National Government’s agricultural programs, AGFP was set to encourage financial institutions and other credit conduits to lend to small farmers.

The cumulative AGFP guarantee coverage reached P8.4 Billion. Of the total amount, P1.9 Billion was allocated to LANDBANK through which 77,743 farmers benefited and 197,243.05 hectares were covered for the period 2012 to 2019. In 2019, the guarantee coverage was extended to 14,669 farmers amounting to P1.75 Billion covering 39,413.69 hectares.

Credit Assistance Program for Program Beneficiaries Development (CAP-PBD)

The Credit Assistance Program for Program Beneficiaries Development (CAP-PBD), which was first implemented in 1996, is a joint program between the Department of Agrarian Reform and LANDBANK in order to provide credit assistance to ARBs and their household members through their respective organizations for their crop production, agri-enterprise and livelihood projects. The Program, covering a 10-year duration, has an approved program fund amounting to P355 Million. As the first DAR-LANDBANK credit assistance support program, the CAP-PBD also extends institutional, enterprise and capacity development activities for the program beneficiaries.

Since the Program’s on-ground implementation from 1996-2006, the CAP-PBD was able to respond to the credit requirements of 156 ARBOs with 210 qualified projects engaged by 8,275 program availers. The total funds availed within the period amounted to P302.5 Million.

The CAP-PBD was extended for another ten-year period, from 2006 to 2016. It was subsequently renamed as CAP-PBD Window III with an approved funding requirement of P233 Million. Given the clamor from more ARBs who are in need of credit support, the CAP-PBD Window III has been renewed for another two years from March 15, 2018 until March 15, 2020 and was renamed as CAP-PBD Window III Program Extension.

As of December 2019, 112 ARBOs have availed of the program with total outstanding loans amounting to P143.7 Million. 


Access of Small Enterprises to Sound Lending Opportunities (ASENSO)

The Access of Small Enterprises to Sound Lending Opportunities or ASENSO is a program jointly implemented by different Government Financial Institutions (GFIs) in support of the National MSME Development Plan. It is designed to simplify and standardize the lending procedures for SMEs among participating GFIs comprising the SME segment of the revitalized MSME Financing Program.

ASENSO took off from where the SME Unified Lending Opportunities for National Growth or SULONG left in 2012, and supports the objectives of the new Micro, Small and Medium Enterprise (MSME) Development Plan. Eligible projects under the program include agri-business, manufacturing, trading and services.

As of December 31, 2019, total loan releases have reached P191.1 Billion. The Program has assisted 50,543 SMEs with total outstanding loans amounting to P89.9 Billion.

LANDBANK CARES (Calamity Assistance and Rehabilitation Support) Program for Islamic City of Marawi and Other LGUs in Lanao del Sur

The LANDBANK CARES (Calamity Assistance and Rehabilitation Support) Program for Islamic Coty of Marawi and Other LGUs in Lanao del Sur is the Bank’s rehabilitation assistance program that provides support to all sectors located in officially declared natural and man-made calamities and disaster areas. It also extends financial assistance to small farmers and fishers affected by the outbreak of diseases on animals and plants. Aside from financial assistance, the Program also aims to provide impactful, tangible and measurable support in terms of improving beneficiary lives and promoting sustainable rebuilding and continuing growth in the area.

The Program was availed by 203 borrowers with outstanding balance of P1.7 Billion, while total loans released stood at P3.7 Billion in 2019.

H2OPE (Water Program for Everyone)

The H2OPE (Water for Everyone) Program is LANDBANK’s unified program for the water and sanitation sector to respond to the current needs for water systems development and distribution, expansion or rehabilitation.  

The HOPE Program aims to capture a sizeable number of qualified players in the water and sanitation industry to supply sustainable 24/7 piped, clean and safe water to at least 85% of the total population of Filipinos. The Program is also available to a wider range of eligible water and sanitation projects, starting from the conceptual water development, new or start-up system, system expansion or development, repair or rehabilitation, acquisition of facilities, machineries or equipment, building of capacity or efficiency, assistance to emergency purposes and watershed or water resources management.

Meanwhile, the Solutions in Terminating Pollution (STP) for Manila Bay is a synergistic program to help restore the cleanliness of the country’s capital harbor and achieve proper sanitation of the surrounding waterways. The Program is in support of the Manila Bay Task Force which was created under Administrative Order No. 16 and mandated to enforce and take charge of the overall rehabilitation and management of Manila Bay.

A total of 32 water districts availed of the Program. Total amount released to these borrowers reached P3.7 Billion with outstanding loans of P2.5 Billion as of year-end 2019.

HOME (Housing Opportunities Made Easy) Program

The LANDBANK HOME (Housing Opportunities Made Easy) Program is a lending program that caters to both homebuyers and home developers:

  • Easy Home Loan (EHL) Program allows individual home buyers to purchase a residential townhouse, condominium unit, lot, house and lot or construction of residential building on a lot owned by the borrower or to refinance a current and existing home loan from other banks, financing firms or developers’ in-house financing.
  • Developer’s End-buyers Financing Tie-up Program allows clients to buy a home through an accredited developer. It also enables developers to grow their business by supporting their clients’ home acquisition after an accreditation process.
  • Bahay para sa Bagong Bayani (3B) Program is a special lending program for Overseas Filipino Workers (OFW) to help them purchase a townhouse, condominium unit, lot, house and lot or construction/improvement of residential building on a lot owned by the borrower, or to refinance a current and existing home loan from other banks, financing firms or developers’ in-house financing.
  •  Housing Project Developers Financing allows real estate developers to access credit for the development of a purely residential subdivision, condominium buildings and integrated housing communities. It also allows financing for the working capital requirements of the developers. 

Under the Program, the Bank has released a total of P7.5 Billion to 3,795 borrowers with outstanding loans amounting to P5.9 Billion in 2019.

BRIGHTNESS (Bringing Inclusive Growth in every Household Through National Electrification Support Service) Program

Cognizant of the need to improve and expand energy access of barangays to spur socio-economic growth and generate employment in the countryside, LANDBANK makes available financing assistance to qualified electric cooperatives and wholesale power aggregators. This complements RA No. 9316, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA Law), in terms of promoting rural electrification that would ensure quality, reliability, security and affordability of electricity nationwide.

As of year-end 2019, the Bank’s total loan releases under the Program stood at P4.8 Billion. There were 35 borrowers with total outstanding loans amounting to P1.8 Billion.  

Green Climate Fund (GCF) Program

The Green Climate Fund (GCF) is an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and Paris Agreement dedicated to support global efforts to respond to the challenges of climate change. It aims to help developing countries limit or reduce their greenhouse gas (GHG) emissions and adapt to climate change by supporting programs and projects that promote a paradigm shift to low-emission and climate-resilient development, while taking into account the needs of developing countries that are particularly vulnerable to climate change impacts.

On October 20, 2018, LANDBANK was granted accreditation as Direct Access Entity (DAE) of the GCF at the latter’s 21st Meeting of the Board (B.21). With this accreditation, LANDBANK is the country’s first and only DAE to the GCF, and one of 76 DAEs worldwide.

Multi-Hazard Impact-Based Forecasting and Early Warning System (MH-IBF-EWS) for the Philippines

The Bank successfully worked towards the approval of the Philippines’ first GCF project last November 2019. The GCF approved the USD10 Million grant for the project focused on Multi-Hazard Impact-Based Forecasting and Early Warning System (MH-IBF-EWS). Preparations are underway for the signing of the Funded Activity Agreement (FAA) and project implementation with the setting-up/preparation of required conditionalities.

Pipeline Projects

  1. Mini-Grid for Small Islands (Rural/island electrification utilizing renewable energy source for reduced GHG emission)
  2. Climate Resilient Agricultural Production systems using Integrative Landscape Approach for Managing Climatic Risks (PILAR)
  3. Sustainable Transport (Adoption of low-carbon emission transportation systems, i.e., electric jeepneys, e-trikes and electric buses)
  4. Energy Efficiency through Virtual Power Plant (Energy efficiency of buildings by retrofitting and use of EE design, technology and materials)
  5. Cebu Adaptation Project (Increased resilience of Cebu coastal communities and vulnerable islands i.e., Bantayan and Camotes Islands)
  6. Enhancement of Ecosystem Services in the Marikina River Basin of the Philippines
  7. Climate Resilient Health Sector Project

LANDBANK Lending Program for Former Rebels  

The LANDBANK Lending Program for Former Rebels was implemented in 2018 to complement the NG’s Enhanced Comprehensive Local Integration Program (E-CLIP) for former rebels (FRs) by providing credit assistance for their small businesses and agri-enterprise projects in order to reintegrate them back into the economic mainstream.

The E-CLIP is a complete package of assistance provided by the NG to FRs who were members of the Communist Party of the Philippines (CPP), New People’s Army (NPA), National Democratic Front (NDF) and the Militia ng Bayan, as well as their immediate families, who have surfaced and expressed their intention to abandon armed struggle and become productive members of society.

The credit assistance shall be complemented with financial literacy and loan orientation seminars which will ensure that FR-borrowers are equipped with the basic knowledge to manage their finances.

In 2019, there were seven FR-borrowers with total approved line amounting to P0.675 Million.