Land Bank of the Philippines raised its budget for unsecured subordinated debt extended to rural banks (RB) to P1.8 billion from P1 billion.

Land Bank President and CEO Gilda E. Pico, who made the announcement during last Friday’s countryside financial institutions (CFIs) awarding ceremony, said Tier 2 funding is offered to “assist primarily CFIs in improving capital adequacy and to help in expanding agri-lending operations while complying with the stricter requirements of the enhanced Basel I.”

Pico said that for the first seven months this year, Land Bank loan releases to 328 CFIs reached P7.6 billion. These loans benefited 166,000 small farmers, fisherfolk, and entrepreneurs nationwide.

For the month of July alone, subscription for the purchase of unsecured subordinated debt has reached P750.5 million. Since August 2007 when the bank first launched the Tier 2 funding for rural banks, the facility has released almost P1.1 billion.

Land Bank has raised its income forecast for the year to P6.5 billion from P5.5 billion based on the strong first half showing. According to Pico, the original is P5.5 billion. “But since we are already at P3.5 billion by the first semester, then I think we should be able to do P3 billion for the next six months,” she said.