LandBank failed to collect P164 million of salary loans due in 2018 —COA report

State-owned Land Bank of the Philippines (LBP) has failed to collect P164 million of loans under its Salary Loan Program in 2018, the Commission on Audit (COA) claimed in a report.

The amount has remained uncollected due to non-compliance with the remedial actions for past due accounts, thus exposing the LBP to possible credit losses, the commission noted in its annual audit report on LandBank.

Region 3 or Central Luzon posted the highest amount of uncollected salary loans that fell due with P28.86 million, followed by Region 13 with P23 million, while Region 5 registered P19 million.

Rounding up the top 10 regions with the highest amount of uncollected salary loans that fell due are:

• Region 12 – P16.7 million
• Region 2 – P13.3 million
• Region 9 – P13.2 million
• Cordillera Administrative Region – P10.7 million
• Region 11 – P9.9 million
• Region 7 – P7.6 million
• Region 4B – P7.1 million

LandBank’s Salary Loan Program consists of the Livelihood Loan System and the LBP Mobile Loan Saver program available to all regular and permanent employees working for the national government, Government Owned or Controlled Corporations (GOCCs), and Local Government Agencies.

Also qualified under the program are elective officials and co-terminus employees as well as regular and permanent employees of private entities with existing LBP ATM Payroll Account in the servicing branch where proceeds of the loan will be credited and loan payments debited.

Sought for comment, Landbank Corporate Affairs head Catherine Rowena Villanueva said the state-owned lender has already responded and taken action regarding the COA's findings.

"The past due amount indicated is a small fraction or less than 1% of the P26-billion salary loan portfolio of the Bank," Villanueva told GMA News Online.

"Avaliers of these salary loans are payroll clients which gives us better leverage on recovery. Aside from this, we also carry out effective remedial measures on past due salary loans," she said.

Such "remedial measures," the Landbank official said, include the restructuring of loan accounts to align loan repayment schedule with the repayment capacity of the borrower.

"In many instances, the Bank is also able to collect past due accounts against  the payment of benefits that are due to the retiring employee. The filing of small  claims from the court also allowed LBP to collect from other salary loan accounts that turned past due," she said.

According to the commission, the bank has issued guidelines to address the issue of “non-collection” by providing options for borrowers such as filing a small claims case for amounts less than P200,000, loan restructuring, settlement of obligations, and writing off accounts with remote chance of recovery after all collection efforts have been exhausted. —VDS/BM, GMA News