Land Bank downplays COA report

CEBU, Philippines — State-owned Land Bank of the Philippines (LBP) downplayed a recent ‘observation’ made by the Commission on Audit (COA) regarding the bank’s uncollected salary loans amounting to P164 million under its Salary Loan Program in 2018.

In a letter sent to The Freeman, LBP First Vice President for Corporate Affairs Catherine Rowena B. Villanueva said the reported uncollected salary loans of P164 million is only a small fraction or less than 1% of the P26 billion salary loan portfolio of Land Bank.

“Availers of these salary loans are payroll clients, which gives us better leverage on recovery,” Villanueva said.

COA Bared on July 24, 2019 that LBP failed to collect salary loans amounting to P164 million nationwide, of which P7.6 million worth of loans are from Central Visayas.

The Commission claimed that the amount has remained uncollected due to non-compliance with the remedial actions for past due accounts, thus exposing the LBP to possible credit losses.

However, Villanueva refuted these claims stressing that the bank has indeed taken action accordingly.

“We have carried out effective remedial measures on past due salary loans. These remedial measures include the restructuring of loan accounts to align loan repayment schedule with the repayment capacity of the borrower,” Villanueva said.

She added that “in almost all instances, the Bank is also able to collect past due accounts against the payment of benefits that are due to the retiring employee. The filing of small claims from the court also allowed LBP to collect from other salary loan accounts that turned past due.”

Central Luzon posted the highest amount of uncollected salary loans amounting to P28.86 million, followed by Region 13 amounting to P23 million, while Region 5 has P19 million in uncollected loans.

Rounding up the top 10 regions with the highest amount of uncollected salary loans that fell due are: Region 12 (P16.7 million), Region 2 (P13.3 million), Region 9 (P13.2 million),

Cordillera Administrative Region (P10.7 million), Region 11 (P9.9 million), Region 7 (P7.6 million, and Region 4B (P7.1 million).

LBP’s salary loan program is made available to all regular and permanent employees of the national government, Government Owned or Controlled Corporations (GOCCs), and Local Government Agencies.

It consists of the Livelihood Loan System and the LBP Mobile Loan Saver program.

Also qualified under the program are elective officials and co-terminus employees as well as regular and permanent employees of private entities with existing LBP ATM Payroll Account in the servicing branch where proceeds of the loan will be credited and loan payments debited. (FREEMAN)