Thursday, August 04, 2005

NR0804:Landbank, NPLs being sold off at loser prices

Mula sa Tanggapan ni Anakpawis Rep. Crispin BeltranNews Release August 4, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
cp number 09213907362

Philippine Govt lost P9.4B in sale of NPLs, kay GMA mapupunta?

Solons smells something fishy in GMA govt’s sale of Land bank non-performing loans and impending privatization of 50% of govt-owned bank

Anakpawis Representative Crispin Beltran today questioned the Macapagal-Arroyo administration’s sale of assets and non-performing loans (NPLs) of semi-owned government-owned Land of the Philippines (LBP), saying he’s filing a resolution calling for investigations on the same, The gross face value of the NPLs was P 13.5 billion (equivalent to $ 241 million). According to records, Land Bank sold it for mere 30% of value, or P 4.05 billion (equivalent to $ 72.3 million). There was a huge loss of P 9.45 billion (equivalent to $ 167.7 million). Land Bank is a semi-government financial institution, and 100% government-owned.

”The lost P 9.45 billion - equiv to $ 167.7 million - is a massive amount, and considering the Land Bank is a a government bank run on taxpayers’ money, the loss also constitutes loss of public funds,” he said. The LBP got only 30% of the original overall worth of the NPLs, selling these NPLs to prestigious and conservative financial institutions namely the Deutsche Bank and JP Morgan Chase Bank. These banks are very financially stable and can well pay higher than the $ 72.3 they spent on the NPLs.

“Someone must take direct resposnibility for this anomalous sale of the Land Bank’s NPLs at loser prices. P9.45 billion is a lot of money! The Macapagal-Arroyo govenrment keeps harping on the act that there’s a huge budget deficit, but here it is selling assets cheap. Even if the NPLs only amount to less than P9.45 B, say it’s P4B, it’s still billions. Former LBP president and current Finance Secretary Gary Teves should be made accountable for this, along with his boss Pres. Gloria Macapagal-Arroyo,” he said. “P9.4B could be used to build public schools and hospitals.”

“It’s also possible, however, that there were under-the-table negotiations and the amount-on-paper is different from the money that was actually negotiated and will go the Phil. Govt as payment. Could it be that the Arroyo govt is going to use the money for it’s much needed overhaul of PGMA’s tattered image and for the projection blitz for Charter Change?”

Beltran said that some finance experts might say that the sale was a master stroke of financial management. NPLs were gotten rid of, and the the NPL financial ratio went down. “But the sale was grossly at the expense of the Land Bank and its real owners, the Filipino people. “

In the meantime, the veteran labor leader expressed incredulity over yesterday’s robbery at the Land Bank branch in Bogo Town, Cebu, where 9.4 million pesos in cash was taken by at least seven men.Bogo police station chief Inspector Arturo Pacifico said three men armed with handguns barged inside the bank at about 7:30 p.m. while the five employees were conducting an inventory of the money deposited by six small banks. It only took 15 minutes for the robbers to stage the robbery but none of the employees activated the bank alarm system, which was connected to the police station. The bank is about a kilometer away from the police station.

“It’s so suspicious that that the Land Bank was robbed in Cebu, which Pres. Arroyo counts as one of her bastions of support. Already there are speculations that the robbery was orchestrated and in line with the plans to privatize the land Bank. Already, the Macapagal-Arroyo govt is fastracking the the sale of at least 49 percent of Land bank to foreign groups, among them the World Bank, Asian Development Bank and the Japan Bank for International Cooperation (JBIC); and the money from the sale will allegdely go to Phase 2 of GMA’s Medium Term Philippines Development Plan,” he said. #


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