NEA cuts lending rates to electric cooperatives

Business World Online
Posted on November 13, 2014 10:40:00 PM

THE National Electrification Administration (NEA) has reduced its lending rates to electric cooperatives (ECs) as part of its regular review on loan pricing, the agency said in a statement yesterday.

NEA said its rates will be cut to 6% from 8% for two-year repayment periods and to 6.5% from 9% for three to 15-year repayment periods.

“As a policy, NEA periodically reviews its lending rates to determine if revision is warranted,” NEA Administrator Edita S. Bueno said in a statement.

“NEA saw the need to study and review its current lending rate to provide an updated loan pricing that is fair, reasonable and competitive with other financing institutions,” it added.

The NEA board also approved the reduction on the outstanding loans of ECs to 9-10% from 12%.

The reduction, however, will be subject to certain conditions. These are only applicable to advance and current paying ECs and should be supported by a board resolution requesting for the reduction of interest rate.

NEA will also impose a higher penalty rate of 15%.

“The lowering of the lending rate will also reduce ECs’ financing costs which will redound to the benefit of the member-consumers,” Ms. Bueno said.

NEA has so far extended some P30.425-billion loans to 119 ECs across the country to finance rural electrification projects. -- Claire-Ann Marie C. Feliciano source