LANDBANK SAYS P144-M IN FEES WERE JUSTIFIED IN QUEDANCOR LOAN
2008-08-05 11:43:12 -
Loan to Quedancor not a supervised loan says Land Bank president as growing concerns raised over "fees"
By Joann Santiago
MANILA www.balitapinoy.net
The Land Bank of the Philippines (LBP) on Tuesday said it has no knowledge if part of the P3-billion long-term loan it extended to Quedan and Rural Credit Guarantee Corp. (Quedancor) in May 2004 was used in the government's swine distribution project.
In a briefing, LBP president and chief executive officer Gilda Pico said they approved the loan for the general lending program of Quedancor, which normally lends to small farmers and small and medium enterprises (SMEs).
She said they have no hands in the disbursement of the fund.
'We can't say that the loan for the swine program came from Landbank because Quedancor's fund came from various funding institutions,' she stressed.
Pico reiterated their earlier statement that there is no irregularity in the granting of the loan to Quedancor because it was part of the bank's wholesale SME lending, in line with the requirement of the central bank.
Half of the loan was extended to farmers and SMEs while the other half was used to invest in Republic of the Philippines (ROP) bonds to strengthen the working capital, she said.
The loan from LBP is part of the P5-billion loan package that Quedancor got from a loan package conceptualized by ONL Consultants Inc.
The remaining P2 billion came from Equitable-PCI Bank.
Pico said the loan facility that they extended to Quedancor has an interest rate based on current T-bill rates plus 1.75 percent.
Principal amount of the loan will be paid after seven years, she said, and only the interest is being paid by the lending institution.
However, the LBP chief said Quedancor asked for a one-year deferment of its payments this 2008 because of its current financial difficulty.
This difficulty has not yet worried LBP officials, Pico said but stressed that they are currently auditing Quedancor.
LBP Treasury chief Reevie Vergara, during the same briefing, said deferment of the interest payment of Quedancor will not affect the principal amount but only the interest payment, which will be restructured.
LBP came under fire lately after Sen. Jamby Madrigal claimed that then LBP Senior Vice President for Treasury and Investment Banking Group benefited from the P100 million arranger's fee, P14 million in attorney's fee, and P600,000 in notarial fees from the loan granted to Quedancor.
Pico said Nograles only acted in his capacity as Treasury head then when he signed the documents for the P3-billion loan from LBP.
'It was above-board, duly approved by the Bank's approving authorities including the Board of Directors,' she said.
She said that since banks in general require a collateral for long-term loans, they cannot extend one to Quedancor without collateral, thus, Quedancor hired the services of ONL to conceptualize a special loan agreement and the fees were payment for ONL's services as financial advisor.
'Landbank only came in after the Quedancor and ONL agreements were made,' she added.
