By Madelaine B. Miraflor

Batangas Veggie Oil Corporation has secured P2 billion in loans from LandBank of the Philippines (LandBank) to help build a vegetable oil refining manufacturing complex.

In a statement, the company said it is planning to construct vegetable oil refining and enzymatic interesterification plant complex, which will be partially funded by the firm’s loan agreement with the state-run bank. The complex will comprise a complete line of refinery equipment capable of refining 300 tons of both coconut oil and palm oil a day.

These include a votator for shortening and margarine products, and the most recent technology in fats and oils modification – the Enzymatic Interesterification (EIE).

The EIE is capable of producing functional fat products with less saturated fat and with essentially no trans-fatty acids which are in-demand amid the country’s growing health-conscious market.

The project will be complemented by storage, distribution, and logistics support facilities which will be built at a 1,200 square meters leased area along the shorelines of San Pascual, Batangas.

The deal came more than a month since Agriculture Secretary Emmanuel Piñol criticized

LandBank for failing to provide loans to farmers, pointing out that the bank asks for too much requirements from farmers who can only provide basic information.

“It’s so difficult to borrow from Landbank that farmers would rather go to five-six lenders,” Piñol earlier said.

He said that LandBank asks at least 18 requirements from farmers before it processes a loan.

This, while the farmers can “only answer two questions: what their name is and where they live.”

For his part, Norman William Kraft, director for Administrative, Finance, and Information Systems Management of Agriculture Credit Policy Council (ACPC), said that in general, agriculture sector has been “the least favorite sector of the Philippine banks”.

Under the Agri-Agra Reform Act, banks are mandated to lend 25 percent of their funds to the agriculture sector — 15 percent of which should go to agriculture-related projects, while the 10 percent must go to agrarian reform beneficiaries.

Exactly nine years since the law took effect, the banking sector still fails to comply, with loans disbursed to agriculture sector only at 13 percent and 1 percent for agrarian reform.