By Jasper Emmanuel Y. Arcalas and Bianca Cuaresma
THE Philippine Maize Federation Inc. (PhilMaize) has formally written to President Duterte urging him to investigate the Land Bank of the Philippines (LandBank) for extending a loan of $85 million to South Korean shipbuilder Hanjin Heavy Industries and Construction Co.-Philippines (HHIC-Phil).
In its letter, a copy of which was obtained by the BusinessMirror, PhilMaize argued that the government should also scrutinize LandBank’s loan portfolio to determine if it had been faithful to its mandate of prioritizing the agriculture sector.
The letter was also sent to the offices of House Speaker Gloria Macapagal-Arroyo, Senate President Vicente C. Sotto III, Agriculture Secretary Emmanuel F. Piñol and Finance Secretary Carlos G. Dominguez III, who chairs the LandBank board.
“The anomalous approval is an outrageous act, a mortal sin and an act of treason to the farming and fishery sector, which [LandBank]’s mandate emanates,” Navarro said in the letter, which was sent to Duterte and other government officials on January 17.
“We must take a closer look on whether [LandBank] granted in haste and on whether they have even granted 50 percent of its loan portfolio to agriculture their foremost beneficiary,” he added.
Navarro said the concerned government officials have not responded to their letter as of press time.
He said PhilMaize was “confused, frustrated and offended” by LandBank’s decision to extend a loan of $85 million to Hanjin, particularly since the bank has yet to act on his group’s proposal for the rice corn blend project (RCB), which it is undertaking with the government.
“We understand that you, Mr. President, have an outstanding order to any government official, office/agency to act immediately on any letter and/or request within seven days or face dereliction of duty. Until today, since we submitted our proposal for almost one year now, we are not in receipt of any courtesy reply letter from [LandBank], very unfortunate from a bank that has an ISO status,” the letter read.
“The granting of Hanjin’s loan is a total display of misplaced priority misguided by the overwhelming desire for profit over the development of agriculture in the country,” it added.
PhilMaize is seeking to avail itself of at least a loan of P1 billion from LandBank to finance the construction of two corn-processing centers. Part of the amount will be used as the project’s working capital. The proposal was submitted to LandBank President Alex Buenaventura on March 2, 2018.
Navarro said the $85-million loan extended by LandBank to Hanjin is “more than enough” to cover the Department of Agriculture’s target of selling 500,000 metric tons (MT) of RCB products in the market. “The whole target of [Agriculture] Secretary Emmanuel F. Piñol is about 500,000 MT, which would cost $70 million,” he added.
The RCB project is a public-private partnership project that seeks to sell more nutritious products in the market and cut the country’s dependency on rice imports. President Duterte led the launching of the project on December 21, 2017, in Davao City.
“It would end the country’s rice-supply shortfall with the infusion in 2019 of about 500,000 MT of corn grits and 1 million MT in 2020, thus effectively achieving food-staple sufficiency for only the second time in the history of the country,” Piñol said.
LandBank ready for dialogue
Sought for comment, LandBank First Vice President and Head of Corporate Affairs Catherine Villanueva told the BusinessMirror that they have already touched base with the office of Navarro and are waiting for confirmation for a scheduled meeting on the issue.
“LandBank is exerting all efforts to reach out to Mr. Navarro and his office to discuss about the issue. We would also like to extend our apology for any inconvenience,” Villanueva said in a phone interview.
She said they are open to sit down for a dialogue with PhilMaize and try come up with a resolution on the matter.
Just last year, Duterte directed LandBank to provide more loans to the agriculture sector, particularly to farmers needing funding to increase production levels and income.
LandBank is a state-owned universal bank with a primary mandate of promoting financial access to the countryside. As of end-2018, the bank has 395 branches, 44 lending centers and 1969 automated teller machines nationwide.