COA turns down DBP request to write off P24-M from study loan program

The Commission on Audit (COA) has denied the petition of state-run Development Bank of the Philippines (DBP) to “write off” uncollected loans amounting to more than P24 million from the government’s Study Now, Pay Later Program (SNPLP) in 1990.

 

In a three-page decision released over the weekend, the audit body said the DBP could “exert more efforts” in order to collect the SNPLP loans totaling P24,781,996.62, excluding interest, from its borrowers.

 

The COA even recommended publishing the names of the delinquent borrowers in the newspapers to track their whereabouts.

 

“No earnest efforts were exerted in locating those without available addresses on record, such as publishing their names in newspapers of general circulation,” according to the decision signed by Commissioners Heidi Mendoza and Jose Fabia.

 

Apart from the P24.7 million of unsettled loan payments, there is still a discrepancy of P616,962 in the DBP account, the commission noted. The amount was earlier identified by bank as partial payments by some of the SNPLP borrowers, but it was treated as “fresh funds” rather than loan collections.

 

“Moreover, further reconciliation of the balances and verifications of records should be made to account for the unreconciled amount,” the COA said.

 

The DBP is among the five government financial institutions (GFI) tasked by the Department of Education Culture and Sports (now the Department of Education or DepEd) in 1990 to implement the SNPLP. The others were the Philippine National Bank (PNB), Land Bank of the Philippines, Social Security System (SSS) and Government Service Insurance System (GSIS).

 

The DBP was specifically tapped as the program's fund manager.

Audit ratings

 

In a petition, DBP vice president and trust officer Roda Celis asked COA to write off the P24 million SNLP loans receivables from the DBP account saying the receivables can be considered “dormant” due to the difficulty of collecting from the borrowers.

 

Celis pointed out that the keeping the SNLP loan receivables under the DBP account has been a significant issue affecting the bank’s audit ratings over the past years.

 

Despite three demand letters sent to each of the SNLP delinquent borrowers, many of them have already moved out from the addresses provided in their loan agreements without informing the bank, Celis noted.

 

A borrower is considered “delinquent” if he or she fails to pay back the loan grants five years after falling due.

 

The COA said “more drastic steps” should be undertaken to compel the delinquent borrowers to pay back the government.

 

In an earlier audit report of the Commission on Higher Education, the COA has recommended that the names of the delinquent borrowers be submitted to the National Bureau of Investigation to bar them from securing clearances for employment and from travelling abroad until the study loan grant has been settled.

 

Under the SNPLP, students from poor families with an annual income of P300,000 or below are qualified to take out study loan for tertiary education provided that they are below 30 years old and of good moral character. – Elizabeth Marcelo/VS, GMA News