Landbank says transactions on flood control projects 'above board'

The Land Bank of the Philippines (Landbank) on Monday denied irregularity on transactions related to flood control projects of the Department of Public Works and Highways (DPWH), saying these were “above board” and in line with banking regulations.

In a statement, Lanbank said funds deposited in the account of government contractors originated from the Department of Budget and Management (DBM), and were released in line with the General Appropriations Act as passed by Congress and disbursed by the DPWH.

“The Bank affirms that all transactions in question were carried out strictly within the bounds of Philippine banking laws and regulations, under full compliance with government mandates and oversight requirements,” the statement read.

“These funds are legitimate government allocations, not private or unverified sources. Landbank, or any other financial institution, has no legal authority to block or question duly appropriated government disbursements,” it added.

Just last Thursday, senators questioned the state-led lender for allowing a contractor to withdraw nearly half a billion pesos in cash within just two days, raising concerns over possible lapses in banking safeguards and fund monitoring for a government flood control project.

According to Landbank, it fully observed 'know your client' or KYC protocols, risk management procedures, and document requirements for the opening of the accounts, and that they could not stop the withdrawals.

“In this case, the legitimacy of the source of funds — government releases through DPWH, the lawful purpose of the payments, and the KYC account opening document of the contractors — have all been properly established and recorded. There was, therefore, no basis under the law to withhold the release of funds,” it said.

“Landbank reiterates that its role is to faithfully execute banking transactions in accordance with law and regulatory standards, and not to assume investigatory functions outside its legal mandate,” it added.

Both chambers of Congress are now looking into alleged anomalies in flood control projects, as President Ferdinand “Bongbong” Marcos Jr. earlier bared that 20% of the total P545-billion budget for such projects went to only 15 contractors, which he described as a “disturbing assessment.”

Marcos has also vowed to ensure that those involved in anomalous projects would be held accountable, triggering both chambers of Congress to launch their own probes into the issue.

The government has also formed the Independent Commission for Infrastructure, which will conduct its own investigation on the irregularities in infrastructure projects, and ensure accountability in the use of public funds.

The commission is chaired by former Supreme Court Justice Andres Bernal Reyes Jr., and counts as members for Public Works and Highways Secretary Rogelio “Babes” Singson, and SGV and Co. country managing partner Rossana Fajardo. 

The commission's adviser, Baguio Mayor Benjamin Magalong, has resigned Friday last week. — RSJ, GMA Integrated News