Land Bank official says PhP800-M loan not yet released to Samar gov’t

CATBALOGAN CITY, Samar, Dec. 10 (PNA) -– The provincial government here has yet to submit some requirements prior to the tranche-by-tranche disbursement of PHP800 million loan, an official of the Land Bank of the Philippines (LBP) said.

Although the state-owned bank approved the application on Oct. 12, 2015, the Samar provincial government has to present all pre-disbursement requirement set by the bank and the Monetary Board of the Bangko Sentral ng Pilpinas.

“The first tranche will be released upon completion of necessary requirements. The local government is still complying pre-release requirements. It is no longer within our control,” said Samar Land Bank Lending Center head Buenaventura Leyva.

The pace of loan disbursement heavily relies on the speed of implementation of the project listed on the local government’s spending plan, according to Leyva.

The official said that Samar provincial government is qualified to secure loan per bank’s assessment and scrutiny of the Bureau of Local Government Finance.

The PHP800 million loan request is not even half of the provincial government’s PHP2.4 billion borrowing capacity

“We are not exposing a certain amount if it is not within the borrowing capacity of local government,” Leyva added. “Our appraisal department will also monitor the utilization of the loan.”

The Land Bank official responded to media queries after some groups in the province have been staging protest, opposing the bank loan for fear that it will be used for political gains.

Board Member Lee M. Zosa, chairman of the Committee on Laws, said the loan will not be used for political campaign of incumbent officials led by Governor Sharee Ann Tan, although the financial aid would likely be released during election season.

“We have started seeking loan in 2013, but we’re not able to agree with interest rate terms of the Development Bank of the Philippines. When it failed, the provincial government started talking with Land Bank early this year,” Zosa explained.

The loan will be used to finance the construction of provincial hospital, put up 10 percent counterpart to the nearly PHP1 billion World Bank-funded road projects, and several farm-to-market road constructions.

The local government will use its Internal Revenue Allotment to pay the loan for 15 years and 5 percent fixed interest rate to pay the loan.

“Only 20 percent of the IRA intended for infrastructure will be assigned as payment to Land Bank. There is no danger that budget of the province will be disturbed,” Zosa added.

The legislator puzzled on why critics are questioning the loan application of the province when in fact, almost all local government units in Samar province have existing bank loans.

“We can assure the public that the governor and other leaders will not steal the money. If there’s corruption, anyone can file complaints at the Office of the Ombudsman,” he told reporters. (PNA)
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