An appeal to stop the LBP P350 million loan of Sorsogon


Letter to the Editor:

The people of Sorsogon would like to commend 3rd District Bulacan Congressman Joselito Mendoza for his noble initiative in authoring House Resolution No. 1196 – “RESOLUTION DIRECTING THE COMMITTEE ON LOCAL GOVERNMENT AND/OR THE COMMITTEE ON BANKS AND FINANCIAL INTERMEDIARIES TO CONDUCT AN INVESTIGATION, IN AID OF LEGISLATION, ON THE PREVAILING LOAN AGREEMENTS AND CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS (LGUs) AND COMMERCIAL BANKS AND GOVERNMENT AND PRIVATE FINANCIAL INSTITUTIONS.” It is not only timely but long overdue due to possible abuses committed by some Local Government Units.

In this regard, may I respectfully request that Congress to please include our province in your congressional inquiry due to prevailing circumstances. First situation, the people of Sorsogon was fairly amused and amazed on the unusual haste on the abrupt and immediate scheduling of a joint committee hearing held by the Sorsogon Sangguniang Panlalawigan Committee on Budget and Appropriations and the Committee on Rules, Privileges and Amendments last Wednesday June 22, 2011 at 10:00 am those main purpose was to tackle a letter dated June 17, 2011 of Gov. Raul R. Lee requesting for an authority to negotiate and enter into a loan agreement with the Land Bank of the Philippines in the amount of P350.0 million, and a passage of a resolution approving the projects to be financed by said loan in accordance with the approved Local Development Plan and Public Investment Program or approved Annual Procurement Program of the Province.

Question is, why the urgency? Aren’t we the people of Sorsogon should first rejoice and feel happy with the unofficial news of some the local media outlets, that the P350.0 million loan with the PNB was denied, yet this was only somewhat confirmed by the public declaration of SPM Bernard Hao, Chair of the Committee on Budget and Appropriations during one of the session of the Sangguniang Panlalawigan last June 21, 2011.

Nobody in Sorsogon has been officially informed of any matter whatsoever whether it has really been rejected or not? I even requested our very own SP Secretariat and our Records Officer only to be told that they have yet to receive any official or unofficial communication from the PNB rejecting the loan of Sorsogon, neither have they received any formal letter request of Gov. Raul R. Lee cancelling his earlier request with PNB.

Is it not only proper that if there was any rejection or any news at all from the Philippine National Bank, the
Sangguniang Panlalawigan Members should be properly be informed if there was any receipt of any official communication from the Philippine National Bank of such rejection.

Now back to the Committee Hearing. What is now the rush in granting a new authority to Gov. Raul R. Lee? Will
there be loss of precious life, liberty or property whatsoever if this measure was not immediately passed or
tackled? If I remember it clearly, the same thing happened when we, SP Members was rushed by the good governor to
approve an authority to negotiate and transact with the Philippine National Bank for a loan of P350M, just almost
a month ago. And now, here we are again with another urgent/immediate request of Gov. Raul R. Lee for the passage of another resolution for an authority to negotiate and transact another loan also in the amount of P350M with the Land Bank of the Philippines?

With this happening, can we blame the many Sorsoganons will again start talking that majority SP members are blind and might even be compared to obedient dogs in outright granting yet another authority to the governor to negotiate and enter into an agreement with LBP with almost the same amount of P350.0 million without first seriously discussing or tackling the issue on what the hell happened to our previous loan application with PNB. Or even what the hell happened to the P260.0 million loan of former Gov. Sally A. Lee last 2009 only.

Now indeed if there was any rejection, standard procedure, norms and decency dictate that the good governor should first justify in writing to this august chamber his sudden change of heart, what is the reason for the immediate transfer of the gargantuan P350.0 million loan from PNB to LBP. Why? We all know that Gov. Raul R. Lee is not yet senile considering he sent a letter dated May 17, 2011 to Vice Gov. Antonio H. Escudero favorably endorsing the PNB Loan Agreement for review and ratification of this August body.

Remember, this representation and the other Sangguniang Panlalawigan members were never made to understand the kind of review and the level and extent of study conducted by some good members of the Sangguniang Panlalawigan and Provincial Government Financial Managers in the previous proposal made favoring PNB. This august chamber should be one of the few remaining standing fortresses in our branch of the government who took an oath to defend our Constitution, our democracy, our province, and our people, but what is actually happening is really very saddening.

Maybe transparency is not in our books. Kung wala, nakakahiya ito!

Before I forget, the people of Sorsogon would like to extend my heartfelt gratitude to the PNB Chair Florencia Tarrela and all the Board of Directors for rejecting the P350.0 million loan application of Sorsogon probably due to issues which in my opinion were properly raised, the same being:

– The pending election protest against Gov. Lee docketed as Comelec Case No. SPA 09-187 (DC) entitled, Jose G. Solis versus Raul R. Lee filed last December 19, 2009 around 11:45 AM which is a Petition for Disqualification and Cancellation of certificate of Candidacy.

– Last April 14, 2011, the Philippine Daily Inquirer published and announced that our Sorsogon Gov. Raul R. Lee was charged with graft by Office of the Ombudsman and filed with the Sandiganbayan for his direct involvement in the very controversial P728.0 million fertilizer fund scam. The case is docketed as Sandiganbayan Case No. 11CRM003 entitled People of the Philippines versus Gov. Raul R. Lee, Raul G. Hernandez and Ofelia D. Velasco for Violation of Sec. 3(e), Republic Act
No. 3019.

– Last May 23, 2011 the Office of the Ombudsman has approved the filing of second graft charges against Gov. Raul Lee and eight others in connection with the alleged anomalous implementation eight years ago of the province’s Distance Learning Center Program (DLCP) that involved a total amount of P22 million pesos in funds sourced from LBP and PNB loans. Despite spending all the money, no DLCP was ever implemented and the circumstances behind it constitute violations of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act, graft investigator Clarisa Tejada said in a 24-page resolution dated last May 12 recommending the filing of the complaints. Acting Ombudsman Orlando Casimiro approved the recommendation last May 23 paving the way for the filing with the Sandiganbayan of the charges that was made to wait for more than five years after the original complaint was filed with the Ombudsman in 2006 by SPM Rebecca Aquino.

This scandalous incident – TWO GRAFT CHARGES by the Ombudsman in less than a year has brought not only put a shadow in the integrity of the governor and doubt in him but gave SHAME and DISHONOR to the people of Sorsogon.

Consider this Cong. Mendoza, Sangguniang Panlalawigan to date has yet to receive any report on the previous P260.0 million loan of former Gov. Sally A. Lee. Don’t you think we need to know what happened to our previous loan, or even analyze whether or not said loan was really needed and its funds properly utilized and used for the purpose for which it was applied for in the first place.

I am sure if Congressional Committee on Local Government and the Committee on Banks and Financial Intermediaries will include our province in the inquiry on possible abuses, we will be one of the top valedictorian LGU borrowers in the Philippines courtesy of our beloved couple Gov. Raul R. Lee and former Gov. Sally A. Lee.

These borrowings have negative economic implications on the contracting LGUs and their constituents, as they remain the liabilities of the LGUs even after the term of the contracting officials. There have been reported increases in the case of LGUs with bad loans and long-term indebtebness, extending beyond the term limits of contracting local officials and eventually inherited by succeeding administrations.

But the most intriguing question now is why was there a rush or urgency to the point of railroading the P350.0 million loan of the province?

I already indicated my strong opposition in any proposed resolution citing issues I raised granting authority to Gov. Raul R. Lee to negotiate and enter into loan agreement with LBP. In the event that the LBP also rejects the P350.0 million loan application of Sorsogon,

do we just apply again to other banks? Isn’t there any procedure on this? Isn’t it a better judgment call to first study the reason for the apparent rejection of PNB if it was the fact at all? Kung sakali umayaw na din po ang LBP ay sa rural bank nalang or kung rejected muli baka sa bumbay nalang umutang si Gov. Lee.

Now, this small potato from Sorsogon had already sent formal communications directly with the top management of the Land Bank of the Philippines appealing to them to emulate the Philippine National Bank in exercising corporate good governance and wise judgement by considering also its action. And in arriving at a decision to follow President Benigno Aquino’s “MATUWID NA

Cong. Mendoza could you please, please, please help us stop or defer the P350.0 million loan application with LBP due to valid issues we raised. In Sorsogon, there are no other political big leaders who have real balls willing to cross lines with our powerful governor.

Mabuhay po kayo!

Very truly yours,

Board Member
2nd District, Sorsogon
July 13, 2011


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