DAR employees threaten not to pay loans to foundation

MANILA, Philippines–Employees of the Department of Agrarian Reform have threatened to stop repaying their outstanding loans to the DAR Employees Foundation Inc. (DARE Foundation) running to about P60 million unless its head fully explains how their loans could have ballooned over the years.

For instance, they said, one employee obtained a P30,000 regular loan from the foundation in May 2005 and this has grown to P110,448 with P80,448 in interest and surcharges.

They said the foundation issued a statement of account but it did not reflect the employee’s payments.

“There are discrepancies in their records. The discrepancies should be corrected and, most important, the surcharges should be based on existing laws,’’ DAR Employees Association president Antonia Pascual said in an interview. She pointed out that 18 percent interest, plus 60-percent surcharge and legal fees were imposed on the loans.

Violeta Bonilla, foundation chair and president, justified the charges and said the employee-members were aware of the terms and conditions of the loans.

“The interest is 1.5 percent a month and 18 percent a year. If after two years they failed to pay, they will have to pay surcharge of 5 percent more. And some loans have been unpaid for five to six years now,’’ Bonilla said by phone.

The loans have accumulated to P60 million from 2005 until now after the DAR stopped payment through payroll deduction. In September, the Court of Appeals ordered the DAR to implement payroll deductions on the foundation’s petition, Bonilla  said.

DAREA press relations officer Gloria Almazan, for her part, claimed that their savings in the retirement, investment and savings equity (RISE) benefit program matured in 2010, but the foundation has yet to release these. She said the savings should be deducted from their outstanding loans.

Bonilla said the savings have not been released because of their failure to submit requirements, but added she had no objection to the proposal to deduct the savings from the loans as long as the members advise the foundation before hand.

Both Pascual and Almazan also questioned the foundation’s claim that they owed P111,759.63, and P139,866.40, respectively. They said they were opposing the motion filed by the foundation with the Quezon City regional trial court for the issuance of a writ of execution against them.

Bonilla said their loans were pegged at the current amounts because the interest, attorney’s fees and costs of the suit had been incorporated.

The association and foundation have a long history of bitter wrangling.

In 1998, Bonilla and fellow DAREA officials, including Pascual and Almazan, formed the foundation to serve as a benefit arm for DAR employees. It had two main programs, the RISE program and the MedCare Plus Plan, which the association officers said they marketed nationwide in the hope that this would be owned by the subscriber-members.

Pascual and Almazan alleged that Bonilla later announced that the foundation was owned by the incorporators, not by the members, triggering a split and the filing of charges and counter-charges.

Bonilla countered that they were there to manage it, and that the employees were members.

Bonilla said she was open to a debate with them before DAR employees to thresh out the issues.