October 2, 2023

The Tabuk City Regional Trial Court Branch 25 has ordered a status quo ante order on the P999 million loan agreement between the provincial government of Kalinga and Land Bank of the Philippines.

The court also ordered the LBP not to release any amount from the loan agreement and for the provincial government not to cause the release of any amount received from LBP arising out of the loan agreement, which was availed under the bank’s Restoration and Invigoration for a Self-Sufficient Economy towards Upgrowth for LGUs (RISE UP LGUs).

These recent developments on the huge loan came following concerns raised by some quarters which has to be clarified by the parties, especially when the provincial government agreed to assign 20 percent of its National Tax Allotment  (formerly Internal Revenue Allotment) to pay for the loan for 15 years.

Former Kalinga Vice Gov. James Edduba raised same concern on the loan agreement entered into between parties on July 6. He  claimed the collateralization is not proper.

Edduba said the term of the collateralization of the NTA will be beyond the incumbency of the elected officials who entered into an agreement with LBP, thus the acts of these officials are considered ultra vires and void because it will deprive persons who will succeed them of the use of that part of the NTA.

He added the incumbent officials cannot commit more than what is allowed by law for them to commit, as he stressed the 20 percent NTA to be assigned by the provincial government to LBP would result in an improper and illegal disbursement of public funds.  

On Nov. 19, the projects covered by the loan agreement underwent pre-bidding conference at the Capitol. On Dec. 2, the bidding was conducted.

Because of this, Edduba filed a complaint for annulment of loan agreement in his capacity as a taxpayer with a prayer for the issuance of a temporary restraining order and writ of preliminary injunction.

He said bulk of the money from the loan is devoted to projects not covered by the RISE UP LGUs lending program. 

As an example, he said the projects covered by a term loan amounting to P539M will be used to partially finance the upgrading/improvement of three provincial roads.

One of them is the streetscaping of the Bulanao-Laya-Balong Provincial Road worth P300M, which Edduba claimed is simply for beautification of the stretch of already paved and developed road. 

“This definitely does not fall within the purpose of RISE UP LGUs lending program, whose aim is to stimulate the local economy of each province/city/municipality by providing financial assistance to LGUs in their task of providing basic and support services for local enterprises; encourage LGUs to facilitate the regional and local development in their respective areas by integrating the different players in the agricultural value-chain; and finance other innovative programs of LGUs which can bring back the confidence of their constituents in the local economy,” Edduba said.

He added the amount could have been devoted to the concreting and improvement of farm-to-market roads in areas that are still undeveloped in upper Kalinga.

He said there are several requests and pleas for farm-to-market roads, which are classified as provincial roads, to be improved for easier access and convenience of the locals.

The 20 percent of the province’s NTA are traditionally allocated for sectoral services such as agriculture, health, social welfare, and development; salary for casual and project employees of the provincial government; and funding for barangay projects, among others.

“This implies that there will be no available funds for the services mentioned above if the 20 percent development fund will be reserved as collateral for the payment of the loan,” the former vice governor added. – Harley F. Palangchao