Land Bank sheds light on Bulacan loan issue

MALOLOS, Bulacan – The Land Bank of Philippines (LBP) has finally shed light on the alleged misuse of the Special Education Fund (SEF) of this province as collateral in acquiring a P215-million loan intended for the construction of school buildings.

In a memorandum to the assistant vice president for Area IV-A, a copy of which was faxed to The STAR, Noel Marquez, legal officer of Land Bank, said that the SEF of the local government unit can be used as security for loans applied for at the LBP if the conditions set by the law are complied with.

This was in reaction to Sen. Aquilino Pimentel’s statement expressing concern over the use of the SEF as loan collateral.

The memorandum said that the SEF may be used as loan collateral provided that "the purpose of the loan shall be for the construction of public school buildings and/or those enumerated in Section 272 of the Local Government Code." It added "the project to be financed and the use of the SEF as collateral must be approved by the Local School Board (LSB) concerned as provided for in Section 272 of the Local Government Code.

The one page document said that "the use of the SEF as collateral must be included in the LGU budget, there must be proper appropriations for the purpose, the local treasurer must be duly authorized to disburse the amount, and all these must be approved by the LSB."

Marquez said in the memorandum that once the SEF is already available for disbursement, it must be deposited to the LBP pursuant to the deed of assignment executed or to be executed pursuant to the use of the SEF as collateral.

Meanwhile, in a phone interview yesterday, Bulacan Governor Josefina Dela Cruz clarified that lawyer Alberto Agra is not connected with the Land Bank, but is the legal counsel of the league of provinces where she is secretary-general and a legal consultant of the provincial government. She said that the legal opinion of Agra was not connected with that of Land Bank but of the provincial government.