land bank of the philippines: role in the development of the oil palm industry 9 th national palm...
TRANSCRIPT
Land Bank of the Philippines:ROLE IN THE DEVELOPMENT OF THE OIL PALM INDUSTRY
9th National Palm Oil CongressKCC Convention CenterGeneral Santos CityAugust 19 – 20, 2015
Topic Outline
• LBP’s Historical Credit Intervention on Palm Oil Industry
• Status of LBP’s Credit Intervention• LBP Financing Program for Oil Palm
• Development of New Plantation• Rehabilitation program • Processing and Marketing
• Business and Financing Models
Expansion to Palawan
1996 Establishment of an Oil Mill PlantTrento, Agusan Sur
1998Financed first coop for oil palm productionBunawan, Agusan Sur
2001Financed coops in Davao Norte
2004Expansion to Bohol
2007
Historical Background of LBP’s Credit Intervention
LBP Financing for Oil Palm Production As of June 30, 2015
BY SECTOR
TYPE OF BORROWERS
NO. OF BORROWERS
TOTAL LOAN RELEASES
OUTSTANDING BALANCE
SMEs 9 47,773,179 41,395,468COOPs 30 512,499,613 478,227,303CORP 6 803,328,558 647,497,541CFI 3 12,211,280 12,211,280Total 48 1,371,812,630 1,179,331,5912
Island Group Loans Outstanding,
Php Billion
% to Total
Luzon 0.1238 10.49Visayas 0.6475 54.90Mindanao 0.4081 34.60Total 1.1793
LBP Financing for Oil Palm Production As of June 30, 2015
BY ISLAND GROUP
BASIC LENDING PARAMETER
Eligible Borrowers
•Cooperatives•Small and Medium Enterprises•Non-Government Organizations•Large Agribusiness Enterprises•Local Government Units
Eligible Projects •Development and maintenance of oil palm plantation
•Trading/Marketing•Acquisition of Fixed Assets
FINANCING PROGRAM FOR OIL PALM
BASIC LENDING PARAMETERLoanable Amount Generally, maximum of 80% of Total Project Cost
which shall be based on the following:a.Actual need and market condition of the borrowerb.LBP agricultural commodity modulesc.Data available with other government agenciesd.Specific requirement stipulated in the PTMA
Interest Rate Prevailing market benchmark rate + applicable spread
Term of the Loan Production - up to 10 years, inclusive of a grace period of up to 5 years.
Working Capital – 1 yearFixed Asset – depends on cash flow projections, but not more than the economic useful life of the asset
FINANCING PROGRAM FOR OIL PALM
BASIC LENDING PARAMETERAmount of Financing Per Hectare
P160,000.00 plus insurance premium for 5 years amounting to P17,679.00
For partially damaged plantation, new loans to be granted shall depend on the extent of damage.
Term 12 years, inclusive of up to 5 years grace period on principal and interest.
Principal and interest for the 1st 5 years shall be amortized over the remaining term of the loan
LBP-AGRI REHAB PROGRAM FOR OIL PALM
A. New Loan Structure
BASIC LENDING PARAMETER (NEW LOAN)Term (cont’d) For partially damaged plantation
12 years, inclusive of 3 years grace period on principal and interest or based on projects cash flow projections of the borrower, whichever is shorter.
B. Existing Account
Existing oil palm production loans will be restructured following the same terms and conditions of the of the loan under the rehab program, or based on cash flow projections.
LBP-AGRI REHAB PROGRAM FOR OIL PALM
Articles of Incorporation and certificate of Filing with SEC DTI Registration and current year Business Permit Certified List of Stockholders, Board of Directors and Key Officers
together with subscribed and paid-up capital Bio-data of Key Officers Customer Information Sheet BIR-stamped/filed Audited Financial Statement for the last three
(3) years together with the Income Tax Return Latest Interim Financial Statement Regular documentary requirements pertaining to offered
collaterals Business Plan (if start-up)
CORPORATIONS
DOCUMENTARY REQUIREMENTS
Photocopy of Registration with Articles of Cooperation/Incorporation and By-Laws
Bio-data of Officers and Board of Directors Board Resolution authorizing the Coop/NGO to borrow and
designating the authorized signatories Audited Financial Statement for the last three ( 3) years Feasibility Study
COOPS/NGOs
DOCUMENTARY REQUIREMENTS
Sanggunian Resolution Authorizing the Local Chief Executive (LCE) to borrow funds,
negotiate, sign documents and enter into a loan with LANDBANK
Approving the projects to be financed in accordance with the Approved Local Development Plan and Public Investment Program or Approved Annual Procurement Program, as the case may be
COA-Audited Financial Statement for the past three (3) years Approved Budget for the current year List of Elected Officials and Key Officers Schedule of LGU’s IRA for the past two (2) years Feasibility Study BLGF Certification on the Net Borrowing Capacity (NBC) for current
year Monetary Board Opinion issued by the Bangko Sentral ng Pilipinas (BSP)
DOCUMENTARY REQUIREMENTS
LGUs
Nucleus estate -oil palm plantation-oil mill
Smallholders Farm
Smallholders Co-op
• Plantation development - cost transferred to the coop thru bank loan - management transferred to coop
at the time the palm begins to yield fruits)
BANK
• Technical training & knowledge transfer
• Capacity buildingPMA
NUCLEUS ESTATE AND SMALLHOLDERS SCHEMEIndonesian Business Model
Members
• Land• Labor
Loan
• Services• Fees
Smallholders Farm
SmallholdersOil Mill Company
Sales Contract (12-14 Years)
Loans; Sales Proceeds, net of 30%
loan amortization
FFBs (starting on the 4th year)
Seedlings TA;
CONTRACT FARMING(COSTA RICA MODEL)
Farm management,under the supervision of the Mill
LBP OIL PALM PRODUCTION, PROCESSING AND MARKETING CHAIN FINANCING
(Commodity and Funds Flow)
Co-op Consolidator /
Conduits
Oil Palm Growers
Oil Mill(Palm Oil
Milling Co.
Oil Refinery(Palm Oil
Milling /Refining Co.)
Market(local/international)
- Refined oil- Other processed products
Fresh Fruit Bunches
Crude palm oil
Fresh Fruit Bunches
Funds Flow(loans/repayment)
LEGEND
Commodity Flow
RepaymentWorking Capital/Production loan
Fixed assetLoan/WorkingCapital
Repayment
•Sales (Net of Loan Repayment)•TA
Repayment/SalesRelending
Fixed asset loan/Working capital
Sales
Sales
Repayment
FEATURES:•Farm Management by Company•Set up Debt Service Reserve Account•Hierarchy of payment (from net sales proceeds):•Maintenance of DSRA•Loan amortization to LANDBANK•Coop share (5-7% net of FFB sales proceeds)•Loan amortization to Anchor Firm•Payment of management fee of Anchor Firm
LAND BANK OF THE PHILIPPINESLANDBANK Plaza, 1598 M. H. del Pilar corner Dr. J. Quintos Streets, Malate, Manila 1004 Philippine
www.landbank.com