Bank loan

Court suspends Kalinga’s 999 million peso bank loan

SEAT OF POWER The provincial government of Kalinga is temporarily prevented by a regional trial court from obtaining its 999 million pesos loan from the Land Bank of the Philippines intended to serve as an economic stimulus fund to revive the local economy stricken by COVID-19. —Provincial Government of Kalinga FACEBOOK PHOTO

TABUK CITY — A Regional Court of First Instance (RTC) in Kalinga Province issued standstill order preventing implementation of nearly one billion peso loan deal between the provincial government and the Bank Philippine land tenure.

In his Dec. 13 order, RTC Branch 25 Judge Jerson Angog ordered Landbank not to release any amount from the 999 million peso loan the provincial government secured earlier in July, which Gov. Ferdinand Tubban wanted. use as a stimulus package for its coronavirus-battered economy.

The order stems from a case that former vice-governor James Edduba filed on December 6, seeking to quash the loan deal.

According to the court, the parties must maintain the status quo, that is to say the condition that prevailed before the filing of the case.

The order will remain in effect until the court rules on the preliminary injunction writ that Edduba also filed and which is due to be heard by the court on January 11 next year.

In his complaint, Edduba called for the urgency of hearing the complaint after the tender process was held for the various projects under the loan agreement on December 2.

During a July forum here, Landbank said the loan, which would be given in cash, was part of a loan program called the Restoration and Revitalization Package for an Economy Self-Sufficient Toward Growth for Local Government Units (Rise up LGU).

Launched in July 2020, Rise up LGUs aimed to support LGUs in the implementation of their economic recovery plan to revive the local economy hit by COVID-19.

Authorized negotiation

Government documents revealed that Tubban was authorized to negotiate the loan with Landbank on May 11.

To secure the loan, the provincial government agreed to use 20 percent of its annual internal income allocation (IRA) – on average 260 million pesos – to pay off the loan for up to 15 years.

Edduba, who filed the case as a “taxpayer,” said the divestiture of the IRA is “ultra vires”, or beyond the powers of local authorities as it will deprive their successors of the use of this part of the IRA. .

He also said that the 20% IRA to be used as a loan payment was traditionally allocated to sectoral services such as agriculture, health, social protection and development, the salary of casual and project workers, and the financing of barangay projects, among others.

“This means there will be budget cuts to serve these sectors until the loans are paid off,” the former official said in his complaint.

Infra projects

Edduba said the bulk of the loan would go to projects outside the LGU Rise up target, such as the 539 million pesos to partially finance the improvement of three provincial roads.

He cited, for example, the streetscape project of the Bulanao-Laya-Balong provincial road worth 300 million pesos, which aimed to “beautify” an already cemented and developed road.

According to Edduba, this amount could have been allocated to concreting the roads from the farm to the market in the undeveloped areas of the mountain towns of Kalinga, which are classified as provincial roads.

He said infrastructure projects, even of this magnitude, could be carried out without taking out loans as had been done previously during the tenure of former governor Jocel Baac.

In a Dec. 16 statement, Edduba denied that the complaint was politically motivated, saying the loan deal also faced opposition from various groups in the province.

Edduba lost to Tubban by 10 votes in the 2019 election and will challenge the incumbent for the same position in the May 2022 election.

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