Court halts Kalinga’s P 999-million bank loan

SEAT OF POWER The provincial government of Kalinga is temporarily prevented by a regional trial court from getting its P999-million loan from the Land Bank of the Philippines intended as its economic stimulus fund to revive the COVID-19-stricken local economy. —KALINGA PROVINCIAL GOVERNMENT FACEBOOK PHOTO

TABUK CITY—A regional trial court (RTC) in Kalinga province issued a status quo order preventing the implementation of an almost P1-billion loan agreement between the provincial government and the Land Bank of the Philippines.

In his order issued on Dec. 13, Judge Jerson Angog of RTC Branch 25 ordered Landbank not to release any amount from the P999-million loan the provincial government secured earlier this July, which Gov. Ferdinand Tubban wanted to use as a stimulus package for its coronavirus-battered economy.

The order stemmed from a case that former Vice Gov. James Edduba filed on Dec. 6 seeking to annul the loan agreement.

According to the court, the parties must maintain the status quo, which refers to the condition prevailing prior to the filing of the case.

The order will remain until the court acts on the writ of preliminary injunction that Edduba also filed and is set to be heard by the court on Jan. 11 next year.

In his complaint, Edduba requested for urgency to hear the complaint after the bidding process for the different projects under the loan agreement was held on Dec. 2.

In a July forum here, Landbank said the loan, which would be given in cash, was under the lending program called Restoration and Invigoration Package for a Self-sufficient Economy towards Upgrowth for local government units (Rise up LGUs).

Launched in July 2020, Rise up LGUs was meant to support LGUs in implementing their economic stimulus plan to revive the COVID-19-stricken local economy.

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 revenue allotment (IRA)—averaging P260 million—to pay for the loan for up to 15 years.

Edduba, who filed the case as a “taxpayer,” said the assignment of the IRA is “ultra vires,” or beyond the powers of the local officials since it will deprive persons who will succeed them of the use of that part of the IRA.

He also said the 20-percent IRA to be used as loan payment was traditionally allocated for sectoral services such as for agriculture, health, social welfare and development, salary for casual and project employees, and funding for barangay projects, among others.”

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

Infra projects

Edduba claimed that the bulk of the loan would be devoted to projects outside the purpose of Rise up LGUs, such as the P539 million set to partially finance the improvement of three provincial roads.

He cited for instance the Bulanao-Laya-Balong Provincial Road streetscaping project worth P300 million, which was for “beautification” of an already cemented and developed road.

According to Edduba, such amount could have been earmarked for the concreting of farm-to-market roads in undeveloped areas in the upland towns of Kalinga, which are classified as provincial roads.

He said that infrastructure projects even by that magnitude could be done without entering into loans as previously done during the term of former Gov. Jocel Baac.

In a statement on Dec. 16, Edduba denied the complaint was politically motivated, claiming the loan agreement was also being opposed by various groups in the province.

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