For salary loans, most employees of the Provincial Capitol turn to one cooperative which first rescued court employees from loan sharks in 1970.
However, the favored status of Cebu CFI Community Cooperative Inc. which gets to arrange direct salary deductions from the Capitol payroll is being reexamined.
The Cebu Provincial Board (PB) yesterday discussed the possibility of terminating its exclusive ties with the coop, which is closely identified with the Garcia family, and allowing other coops to come in.
The coop was founded by Ret. Judge Esperanza Garcia, its present chairman. She is the mother of former Gov. Gwendolyn Garcia and wife of former governor and congressman Pablo Garcia.
In yesterday’s PB session, Provincial Attorney Orvi Ortega, was invited to shed light on a 1987 Memorandum of Agreement (MOA) which governs the relationship between the Province of Cebu and the coop.
Ortega was asked by PB Member Peter John Calderon if the Province can revoke the MOA through a resolution of the board.
Ortega said that since MOAs are bilateral in nature, both parties can “reform, rescind and terminate” its terms.
He said the PB “can issue another resolution terminating the MOA” and that the document did not specify any period for its effectivity.
“It is very apparent and clear that there is no specified period in the agreement,” he said.
“Aside from that, it did not specify a period and validity to when the MOA will take effect.”
During the disussion, PB Member Jude Sybico of the 5th district asked whether revocation would allow other coops to enter and enjoy the same accommodation.
“We should not limit the lending authority to CFI only,” said Vice Governor Magpale, the presiding officer.
No resolution was passed and the discussion ended with the matter being officially “noted”.
Asked later whose idea it was to terminate ties with the coop, Magpale, in an interview, said the question came up in one of the PB pre-session caucuses whether the Capitol has the option to revoke its ties with the CFI.
She said the board asked if a bidding process was held before the Province signed a MOA with the cooperative.
The coop has its own building in the Capitol compound.
Following Ortega’s advice, she said the province has the option to accept other credit cooperatives that plan to offer loans and other services to the Capitol’s 1,500 employees.
“The action was noted but I’m sure it will not stop. If any member of the PB wants to act on it, we know now what to do,” she told Cebu Daily News.
Ortega earlier said the MOA could still continue even if other credit cooperatives are allowed to operate.
“It could co-exist with the MOA but if that happens, it would be better if its given to the firm with the best offer,” he said.
Under the present MOA, the Treasurer’s Office in the Capitol prepares a separate payroll for employees who have outstanding loans with CFI. After the payrolls are processed, they are sent to the cooperative two days before payday.
The payrolls, together with a certification that each of the employees have been paid, will then be returned to the Treasurer’s Office and will be reimbursed by the amount advanced by CFI.
Establishment
In 1987 the PB in a resoluion authorized the governor Osmundo Rama to sign a MOA with the CFI to provide better credit facilities to its employees.
It said the entry of the cooperative would put an end to “immoral money-lending activities of the so-called loan sharks in the Capitol who extend loans to provincial employees with exorbitant and unconscionable interest charges.”
The 1987 resolution said that “for want of a better alternative for our provincial employees, in desperate and constant need for money in order to save themselves from a tight situation have oftentimes fallen easy victims to these loans.”
Aside from that, it said CFI has “very low interest charges of 1.14 percent a month compared with loan sharks who charge up to 20 percent a month.
The coop held its 43rd general assembly last March in the Cebu International Convention Center with over 7,000 members. Vice President Jejomar Binay was the guest speaker.
It was established on April 7, 1970 as a response to the needs of Cebu Court of First Instance (now Regional Trial Court) employees for financial assistance. Before the coop, employees had to borrow from moneylenders who charged high interest rates. Esperanza Garcia was a clerk of court at the time and with the assistance of then Executive judge Francisco Tantuico, sought the help of the Scarborough Fathers of Canada to form the credit union among court employees. /Peter L. Romanillos, Correspondent