MANILA, Philippines — Bohol Governor Arthur Yap on Friday asked the Landbank of the Philippines and the Development Bank of the Philippines (DBP) to allow zero-interest loans for local government units (LGUs) which would be downloaded to micro, small, and medium enterprises (MSMEs) in their localities.
During a joint Senate hearing of the committees on finance and economic affairs, Yap said LGUs will not profit from these loans and that funds will be allocated to MSMEs as it is anyway.
“Kaya ang hinihingi ko, Sir, if I may be so bold, kung pwede nga i-zero ‘yan (That’s why I am asking, If I may be so bold if it’s possible to have it at zero interest),” he said, speaking to Senator Sonny Angara who is chairman of the Senate finance committee.
“Baka po pwedeng i-zero na lang kung ganun to give them confidence tapos hilahin or konting fees na lang, kahit na 0.5 o 1 percent, something like that (Maybe they can give us zero interest to give them confidence and then there will be a few fees, maybe at 0.5 or 1 percent, something like that),” Yap also said.
The governor noted that other economies are already providing negative interest rates to allow MSMEs to operate amid the coronavirus pandemic, which has held back several industries worldwide.
For her part, Landbank President Cecilia Borromeo said Landbank would “look for ways” on how it could provide the zero-interest loans for LGUs.
“The interest rate, of course, you know that the interest rate also is a function of our cause of funds so if the LGUs can give us also their deposit at zero interest, then we can give you probably not zero but probably 0.5 or 1.5 percent on your loan and so that you can lend this to your constituents. We will try to look for ways to give you that zero percent interest loan to the LGUs,” she said in the hearing.
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