LANDBANK seeks approval of new charter by Q1 2025

LAND BANK of the Philippines (LANDBANK) is hoping senators will approve early next year a bill amending its charter to raise its capitalization to P1 trillion, which would boost its capacity to lend to its priority sectors, its president said.

“We’re really hoping that we could get it [approved] by the first quarter of 2025… to be able to really raise our capital, whether that be via debt or via equity and raising longer-term funding, which will allow us to meaningfully participate in long-gestation economic projects,” LANDBANK President Lynette V. Ortiz told BusinessWorld on the sidelines of a Senate Banks, Financial Institutions and Currencies committee hearing.

“One of the main components of this new charter is our ability to raise bonds and our ability to raise equity,” Ms. Ortiz said. “Those things take time. There’s due diligence and scoping of the market… so if we could get it (approved) by the first quarter of 2025, that would be great.”

Senator Mark A. Villar, who chairs the committee, wrapped up discussions on Senate Bill No. 2760, which provides for a new charter for LANDBANK, referring the measure to a technical working group. A counterpart bill is pending at the committee level at the House of Representatives.

The bill proposes to raise the state-run lender’s authorized capital stock to P1 trillion from the current P200 billion, with the government owning 70% of its outstanding capital stock at all times.

It said that P200 billion or 20% of LANDBANK’s capital stock will be subscribed to by the National Government, while P163.79 million or at least 81.89% of the total subscription to be paid up by the state.

The Senate bill also grants the bank the authority to issue shares of stocks to private individuals and entities, with the aim to expand its investor base.

Under the proposed new charter, the bank will also be allowed to issue bonds up to an aggregate amount not exceeding 10 times its paid-in capital and surplus.

LANDBANK “shall provide banking services with a social mission of spurring countryside development by granting loans to finance the agricultural projects and national government’s developmental projects,” the bill said.

“Our main provenance has always been agriculture, but right now our focus is really the entire value chain,” Ms. Ortiz said, adding that they also support other sectors, particularly projects related to infrastructure and clean energy.

As of August, LANDBANK has lent about P727.87 billion to agriculture, fisheries and rural development projects, Ms. Ortiz said during the hearing.

Last week, the Senate approved on third final reading a measure that will replace the Development Bank of the Philippines’ current charter, raising its capital stock to P300 billion from P35 billion and also allowing it to conduct an initial public offering. — John Victor D. Ordoñez