LBP on P265.5 Mt Province gov’t loans

Behind the Scenes

ALFRED P. DIZON

BONTOC, Mountain Province – The provincial government is set to receive a total of P2656.5 million as loan from the Land Bank of the Philippines despite controversies on the issue.         Victoria M. Zambrano, LDP department manager of La Union Ilocos Lending Center furnished the Northern Philippine times a copy of its letter to Mountain Province provincial board member Francisco B. Balisong who earlier questioned release of the funds and projects wherein the money would be used.

Hereunder is the unedited letter:

Sir:

This refers to your letter dated August 25, 2012 and April 17, 2012 and received by this Office on November 6, 2012 and May 7, 2012, respectively, and both addressed to our LBP President requesting that release of funds for the P37.500 M loan intended for the road improvements within the Municipality of Besao,Mountain Province be held in abeyance.

At the onset, we wish to inform you that Land Bank acted on the request of the Provincial Government of mountain province to obtain a Term Loan amounting to P37.5 M to finance the Tagungtungao-Besao Farm to Market Road by virtue of the SangguniangPanlalawigan Resolution No. 2011-105 which was approved on May 2, 2011 and attested to by all the members of the SP.

The said Resolution clearly speaks of the Farm to Market Road as a priority project of the LGU and for which reason the loan application has undergone the usual credit review, evaluation and approval process vis-à-vis the credit parameters of the Bank. It was approved in accordance with the policy of the Bank and subsequently a Loan Agreement was entered into between the LGU and LBP.

To hold the release of the unavailed portion of the approved loan even without the request of the LGU may not be proper at this point for it may jeopardize the delivery of services to the intended beneficiaries if project financing is to be withheld.

To our opinion, the withdrawal of your signature in the SP Resolution is a matter that should be resolved before the Sangguniang Panlalawigan because as far as the Bank is concerned, the same cannot be used to prelude us from complying to its obligations under the agreement.

LBP approved the loan of P37.5 Million with an agreement with the LGU of the following terms and conditions:

The initial release of P5.625 M is subject to LGU’s compliance to the pre-release and documentary requirements. Succeeding releases shall be based on progress billings as certified by the Project/Provincial Engineer as approved by the Local Chief Executive and validated by LBP Appraiser. Final release shall be upo9n 100% project completion.

The LGU was required an equity or counterpart contribution to the project. This means that the LGU may already infuse its equity contribution even prior to the initial release of the loan.

While initially the project was proposed and approved in February 2011 to have equity contribution from CHARM, the amendment calling for the non-inclusion of the said counterpart was approved i8n November 2011 with a justification that the process of securing the documentary requirements from DA RFU-CAR/International Fund for Agricultural Development will delay the prompt submission of the documentary requirements for the approved loan.

With regard to the proposed P228 Million loan which you stated to have been covered by the Resolution No. 2011-245 dated 19 September 2011, the same resolution was certified as true and correct and attested to by all the SP members that the projects so identified   are priority projects of the LGU.

Like the P37.5 Million Loan, the said application for the projects has been subjected to the usual credit evaluation and approval process. With regard to your request to hold the release of the loan and the withdrawal of your signature to the Resolution, our position as stated in the forgoing will apply to these concerns.

Thank you and we hope we have addressed your concerns.

Very Truly yours,

Victoria M. Zambrano

Department Manager

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Gov. Leonard Mayaenearlier said the P228 million loan from the Land Bank of the Philippines mostly allotted for road construction should begin Jan. 2013 after bidding.

Mayaen told NPT writer Gina Dizon in an interview that P168 million of the P228 million loan has already been approved by Land Bank pending requirements from specific road projects to be submitted for approval of the remaining amount of the loan.

The LGU of Mountain Province entered into a loan agreement with Land Bank September 2011 through a memorandum of an agreement endorsed by the SangguniangPanlalawigan allowing Mayaen to enter into a loan agreement with the Land-Bank in the amount of P228 million.

Bulk of the 228 million peso loan was meant for upgrading the province’s road systems linking adjacent provinces and within municipality routes.

Mayaen said P20 million from the P228 million loans is allotted per municipality for the improvement of respective provincial roads. Mountain province has an estimated 500 kilometers of provincial roads with the same span of national road networks found in Barlig, Sagada, Sabangan, Bontoc, and Bauko.

Concreting and rehabilitation of slope protection walls and drainage systems in the Province’s road networks are meant for construction to be done in provincial roads, he said.

Mountain province’s erosion-prone slopes and rugged systems, he added, hampered smooth and safe transportation. Mountain Province is linked to bustling market outlets in Santiago, Isabela on the east, Ilocos Sur westward and south towards Benguet and Baguio City.

Release of the loaned amount would be done per project accomplishment after validation from the Provincial Engineering Office and engineers of the Land Bank, Mayaen said.

The rest of the loan amount is projected to be used for the improvement of the provincial gymnasium, Capitol building and the Bontoc General Hospital.