Ms. Gilda Pico
President and CEO, Land Bank
President and CEO, Land Bank
the Philippines registered a GDP (Gross Domestic Product) growth
of 7.2%, the highest it has been for 35 years. This is hugely
impressive following the 2008 downturn. How has BSP supported
the financial markets here and helped the economy to flourish?
The BSP has
done a very good job in terms of managing inflation, interest
rates as well as the exchange rate. That meant that businesses
could invest more. Of course, BSP has implemented a very strict
risk management system which improved the operations of banks.
We have implemented Basel II and a risk-based internal audit approach.
The BSP has also been very strict in evaluating the oversight
function of the board and senior management. They have a lot of
initiatives in terms of risk management and corporate governance.
Moreover, the BSP has contributed significantly in strengthening
the banking system and the Philippine economy. Thus, the Philippines
has ably withstood the external global shocks such as the 2008
US financial crisis and the upsurge in crude oil prices.
you think the BSP is supporting new products and new types of
The BSP has
been very supportive of the developmental needs of the country.
BSP's focus on financial inclusion and microfinance is very timely
and will definitely result in expanding credit outreach. In addition,
the BSP has been very responsive in the Public-Private Partnership
or PPP Program of the Philippine Government by allowing higher
loan limits to banks.
It is not just BSP but it is the country as a whole. For example,
8% of total loan portfolio should be for micro and small enterprises
and 2% for medium enterprises. In the case of agri-agra, 15% of
total loan portfolio should be in agri and 10% in agra. These
are the initiatives of the Government to support the agricultural
sector and SMEs. These are being monitored by the BSP and banks
are penalized for non-compliance to these new laws.
do you think need to be implemented in order to develop the consumer
loan base in the country?
small enterprises usually do not have hard collaterals which they
can offer to banks. If we insist on hard collaterals, then micro
and small enterprises will not be able to access credit from banks.
We need to evaluate the project itself, their cash flows and the
ability of the enterprise to pay back the loan. We need to relax
the requirements without sacrificing credit standards and the
viability of the project. We look at what are available like receivables,
purchase orders, etcetera.
is the backbone of the economy here.
sector plays a very crucial role in shaping the country's overall
economic growth and development. It remains as one of the most
economically significant and promising industries in the Philippines
in terms of its vast potentials and opportunities for expansion
This is primarily
why LANDBANK is helping the farmers and fisherfolk sector through
financial and technical assistance. We want to reach as many farmers
and fisherfolk as we can, and we tap rural banks and cooperatives
which serve as conduits in extending the much-needed credit support
to our mandated sector. We are working with about 500 rural banks
and their branches and over a thousand cooperatives in order to
serve farmers and fisherfolk across the country.
is very important when lending to farmers and fishermen. We have
established a group in LANDBANK called the Development Assistance
Center which focuses on the institutional and capability building
of these cooperatives.
of the bank depends on the strength of the conduits. Before we
lend to them, we make sure that they are prepared technically
in terms of bookkeeping and in other areas of managing their business.
thing we require from them is equity. If they do not have a stake
in the business, they can easily abandon the project. So for every
one peso that they put in the cooperative, we give them six pesos
in loans. They use these loans for relending to the small farmers
priority sectors of LANDBANK are the micro small and medium enterprises,
livelihood, agribusiness and agri-infrastructure, renewable energy
developing any more products to target even more farmers?
Yes, we developed
a synergy program called the Food Supply Chain Program, which
is in support of the National Government's thrust of promoting
food security. The objective is to increase farmers' income by
providing financial and technical support along the value-added
chain of a commodity or industry.
this last year where we allocated P50 billion for the program,
particularly to support the financial requirements for crop, livestock
and fishery production, working capital and acquisition of processing
and other fixed assets.
provides financing to all the players along the value chain system
consisting of a full range of activities that are undertaken in
turning a particular product into a form that is sold and consumed.
At the onset,
a cooperative and a processor will establish production, technical
and marketing contracts, where the cooperative thru its farmer
members commits to supply the processor with their produce based
on the latter's product requirement. The processor on the other
hand, commits to buy the produce of the cooperatives at a competitive
price; and may also commit to provide the necessary inputs and
technical assistance if only to ensure product quality and standards.
The processor then makes use of the produce to convert into a
product that will again be an input to another activity.
It is really
a complete chain from farm production to processing to marketing.
Farmers will now be assured that their products will be bought.
The problem in the past was that there was no market for their
produce, so we are now addressing that. In line with that, LANDBANK
is also investing in research. We have linked up with universities
and state colleges in the provinces and the countryside so they
can study and research on how farmers can increase their production
and profitability. We will pilot test their findings and if successful,
the idea will be marketed to the farmers so they can adapt the
technology. We then pilot test their recommendation and if successful,
encourage farmers to adopt these new technologies.
like the Philippines should not have to import rice, so this has
to be developed. Could you tell us more about your partnerships
with universities and individual centers in the provinces?
We have tie-ups
with state universities, local government units and non-government
organizations where we validate viable technologies that contribute
to production efficiencies of farmers.
is to encourage technology adoption among farmers, fisherfolk
and entrepreneurs in order to increase their income. It could
be a new variety of rice or vegetables. If the technology is tested
to be viable, we give it to the farmers so they can adopt and
implement it. In return, their production will increase and the
quality of their produce will improve and thereby, they will be
able to command a higher price. LANDBANK aims to increase the
productivity of the farmer as well as the quality of the produce
so they can sustain their operations.
is ranked as the top 5 commercial bank in the Philippines. Speaking
specifically about your institutional investments, what avenues
do you like to go down besides agriculture obviously?
sectors are not just the small farmers and fisherfolk. We also
support SMEs and we finance local government units for infrastructure
projects. We also support renewable energy and water projects
as well as the requirements of government agencies and corporations
because we are a government bank. For example, if the NFA (National
Food Authority) requires financing for domestic rice procurement,
then we lend to them.
units are crucial in the food supply chain and in the development
of the rural economies. We need infrastructure so that the produce
of the farmers can be brought to the trading center at the least
cost possible. Sometimes it takes them a long time to transport
from the farm to the trading areas, so transport costs are high.
We finance local governments so they can build farm to market
roads and rural infrastructure.
cannot do this alone; it needs the support of the other units
and local governments.
has adopted an integrated countryside development philosophy.
This synergistic framework is the most effective approach. Adopting
a silo approach towards countryside development has a higher risk
think that the private sector needs to play more of a role? Do
you think that there needs to be more of a synergy?
sector can participate under PPPs (public-private partnerships).
Sometimes the local government units have an arrangement where
the private sector builds the infrastructure and then when it
is completed, they turn it over to the local government. That
can be considered as a partnership between the private and public
OFW Overseas Foreign Workers) remittances were successful with
huge growth compared to other years. What role do you think the
OFWs play in the development of these provinces?
have savings from their jobs abroad and they remit the money to
the Philippines for investment. We offer them investment opportunities
like retail treasury bonds and long term negotiable instruments
which are higher yielding instruments. We provide financing if
they decide to put up a business. We encourage them to start a
business for their families while they are abroad so they will
have a regular source of income when they come back. Before the
leave the Philippines, we conduct pre-departure seminars where
we discuss investment opportunities for their money and business
projects for their families.
like the underlying theme for Land Bank is promoting sustainability
within the country.
Yes. We have
a new program called the OFW Reintegration Program for OFWs who
lost their jobs and had to come back to the Philippines. We will
offer financing depending on the type of project and business
they want to pursue. We will provide them with a list of projects
they can choose from.
Pico you have been the Chief Executive Officer and President of
Land Bank of the Philippines since November 2006 and have been
its Vice Chairman since August 2005. You served as Senior Executive
Vice President of Agrarian and Domestic Banking Sector of Land
Bank of The Philippines. You also served as Executive Vice President
of Operations and Support Sector at the Land Bank of the Philippines,
where you started your banking career in 1981 as Assistant Vice
President. You are a Certified Public Accountant, earning a Bachelor
of Commerce degree from the College of the Holy Spirit and attended
the Masters in Business Administration Program at the University
of the East. With such a focused and illustrious career within
Land Bank, what do you think have been the key achievements that
have defined you and Land Bank for the future?
I was fortunate
indeed to have been assigned to different areas, taking on various
roles which prepared me for the position at the helm. I have worked
with five former presidents of this Bank and I've seen how they
steered the institution. I had the advantage of getting the best
leadership and management style and lessons from my predecessors.
This, along with my extensive hands-on experience in the different
sectors, equipped and prepared me when I was called upon to lead
the Bank. It was a gradual process starting off as assistant vice
president then gradually moving up to senior executive vice president,
then later as acting president until I was appointed as full fledged
president. It also helps that I know the people I work with, having
been with LANDBANK for 30 years and counting.
your vision? What is on the agenda for Land Bank over the next
the vision of LANDBANK is to serve our mandated sectors, and to
play a key role in countryside development.
This is a tall order, a challenge which we are endeavoring to
fulfill. While we continue to remain committed to this noble purpose,
we realize that there is much more to be done. We strike a balance
in generating profits so that our development programs are implemented
Now and in
the years ahead, we will remain focused in our three business
goals namely: pursuit of mandate, institutional viability and
we want to be remembered for having worked hard to ensure that
LANDBANK remains a leading institution in promoting development
in the countryside. Generating profits is of course important,
but foremost in our agenda is to serve the farmers and fisherfolk,
micro, small and medium entrepreneurs, and other key players in
(Corporate Social Responsibility) programs is Land Bank trying
to push forward with right now?
As our head
office is along the Manila Bay, we are very much involved in the
clean up and rehabilitation of the bay. Apart from rolling our
sleeves to clean the surroundings of Manila Bay, we also finance
garbage boats which collect debris from the waters.
Other CSR programs which we undertake include tree planting activities
nationwide where our strong 7,200 employees troop to watersheds,
parks and school grounds to plant trees. We also have scholarship
and donation programs to communities and other charitable groups.
met with Mr. Washington Sycip he told us that the absolute key
to business in his opinion was human resources and understanding
that management is important in terms of knowing your people and
how to get the best out of them. Having been here for 30 years,
it is clear to me that you have gained the respect of people throughout
the business. What has been the key to you management and leadership
style here at Land Bank?
It's a fusion
of strategies or styles, but mainly, the focus of our leadership
at LANDBANK rests on the respect which we give to every member
of the organization, and the respect which we reap in return.
It works both ways - respect people, and they will respect you
back. It's easier for a leader to ask people to do what is right
if that leader has the respect of the people.
example is another key. It's no use telling people to do something
which I am not willing to do myself. We believe that leaders should
set and be the examples themselves.
know your people. I've learned that it's important to spend time
with them and show sincere interest not only in their professional
growth but also in their personal well-being. We're a family here
and as in any family, we try to give as much care and concern
to our members.
message would you like to send to the readers?
one, we'd like to invite them to visit our country not only to
behold the many natural wonders in the Philippines, but also to
explore possible investment options.
On our part
at LANDBANK, we will continue to do our share in promoting economic
growth especially in the countryside where potentials for development
are endless. Ultimately, we would like to see LANDBANK fulfill
its mission and be able to touch and make a difference in the
lives of the people we serve.
you very much.