Landbank goes after vessels

The Land Bank of the Philippines (Landbank) has filed before the Manila Regional Trial Court a civil action seeking to foreclose and take possession of 11 vessels owned by Asian Marine Transport Corp. (AMTC) after the latter’s failure to pay for loans secured by chattel mortgages over the said vessels.

As of May 15, 2025, AMTC’s outstanding obligations with the Landbank, including those owed to the United Coconut Planters Bank (UCPB) now merged with Landbank, amount to P3.674 billion.

The actual market value of the mortgaged vessels is estimated at P1.006 billion, Landbank said.

Cebu-based AMTC, according to its website, is a provider of end-to-end transport and logistics services as well as shipping services for inter-island passengers and cargo and is the largest ship tonnage owner and operator in the Philippines serving 32 ports of call.

In its complaint for admiralty action in rem with prayer for ex parte issuance of warrant of arrest or seizure of vessels, Landbank said that AMTC, which is engaged in roll on/roll off operations with its fleet of RORO and passenger ferry vessels stationed across various ports nationwide, availed itself of a series of loans from both Landbank and UCPB since 2010.

An action in rem is an admiralty action in rem directed against a specific ship itself or its particular cargo or freight to satisfy the claim of the plaintiff out of the res or the thing which in this case are the vessels offered as security for the loan.

These include a P175 million loan from the bank to partially finance the acquisition of two second hand RORO passenger cargo vessels evidenced by a loan agreement and secured by chattel mortgage contract executed over three of these ships.

Over the years, additional loan lines were extended by Landbank to AMTC, including a P280-million term loan also to partially finance the acquisition of a second-hand containerized RORO passenger vessel which is secured by a chattel mortgage over the vessel and other equipment; another P280 million to partially finance the acquisition of a second-hand marine vessel likewise secured by a chattel mortgage over the same vessel; a P138-million loan to refinance one vessel under a previous term loan; a P130-million credit line agreement to augment the capital requirement for the shipping business; a P400-million loan to finance the acquisition of a second-hand marine vessel; another P400-million loan to purchase another second-hand vessel; a P350 -million credit line for the shipping business followed by another P350-million and P525 million loan for the same purpose and a P480 million term loan to buy another second-hand marine vessel.

It was alleged in the complaint that due to the financial difficulty and oversupply of cargo vessels, AMTC was unable to meet the payment of its maturing obligations causing the restructuring of a number of its loans.

AMTC and UCPB also executed a number of loan agreements, including one in 2014 amounting to P400 million for the acquisition of a new RORO vessel secured by a chattel mortgage on the vessel; a P100-million loan also in 2014; a P100-million loan in 2015, a P312-million loan also in 2015 to acquire another RORO vessel, a P188-million loan to finance the rehabilitation/reconstruction of Ouano wharf and a P332-million loan in 2017 for a second-hand RORO cargo ship.

AMTC negotiated with Landbank for the settlement of its obligations via dacion en pago for some of its properties but the talks failed for failure to agree on the terms of the dacion.

On Feb. 17, 2025, Landbank wrote AMTC for a final demand to settle its total outstanding obligation of P3.589 million including those owed to then UCPB and to surrender possession of the mortgaged vessels and tractors to allow the bank to exercise its right to foreclose the mortgage.

Landbank claims that while it is entitled to the lawful possession of the vessels for the purpose of foreclosure, AMTC has refused to surrender possession of the vessels despite the bank’s demand.

AMTC also owes the Development Bank of the Philippines (DBP) around P1.479 billion in loans which the state lender has tagged as past due.

In a letter sent to DBP last September 2024, company president Paul Rodriguez said that they had no current means to pay the amount and had been upfront with the cashflow constraints that temporarily limit their ability to service their obligations with the bank.

Rodriguez added that the company has demonstrated its commitment to help pare down its balance with the bank and that it regrets DBP’s denial of its request for extension and the bank’s termination of negotiations pertaining to AMTC’s request for restructuring or extension of its past due obligations.

AMTC said that despite this, it continues to work with the bank as a sign of good faith to mutually find ways to make payments without crippling or totally stopping its operations.

In the case of Landbank, the company said that it attempted to negotiate with the bank for the settlement of its obligations by offering its properties via dacion as payment but the negotiations failed due to both parties’ inability to agree on the terms.

In one letter, AMTC requested a reduced monthly payment of P5 million, extension of payment, and full waiver of penalties. In another letter, it offered its Palawan property as payment and proactive restructuring rather than undertaking litigation or foreclosure but Landbank instead suggested that AMTC offer its mortgaged vessels to the object of the dacion. Again, the parties failed to agree, including on the issue of valuation of the properties being offered by AMTC.

For comments, email at [email protected]