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LANDBANK’s largest capital infusion in Duterte watch yields better services, financial inclusion for Filipinos—Dominguez


March 23, 2022

President Duterte’s all-out support for the Land Bank of the Philippines (LANDBANK) through a capital infusion that is the largest compared to the combined amounts that the institution had received under previous administrations has expanded financial inclusion among Filipinos and provided better services to the underserved sectors of the economy, Finance Secretary Carlos Dominguez III has said.

Dominguez said that at the homestretch of the Duterte administration, LANDBANK’s total equity will have grown to P230.4 billion by end-April, which represents a 160-percent increase from its P88.7-billion capital when the President took office in 2016.

This feat has made LANDBANK the second largest universal bank and the bank with the highest paid-in capital in the country, Dominguez said.

The state-run lender’s financial strength under President Duterte has been used to provide low-interest loans to underserved sectors, especially small farmers and fisherfolk; and extend support to broad sections of the economy, such as healthcare, education, power generation and distribution, water, transportation, and housing, said Dominguez who is also LANDBANK chairman.

He said LANDBANK has extended financing support for the construction of over 200 hospitals and the procurement of more than 20,000 patient beds.

“Early in your administration, I asked for your permission to allow the Land Bank of the Philippines to expand its asset base and scope of services. You not only gave your permission but also your total support to enable LANDBANK to achieve these goals. It is your administration, Mr. President, that has infused the largest amount of capital into LANDBANK compared with the combined amounts under all other administrations,” Dominguez said during LANDBANK’S historic turnover of 1.36 billion shares of common stock to the government.

These new shares of stock in the name of the Republic of the Philippines is worth P136.2 billion. President Duterte received the stock certification from LANDBANK on behalf of the government at Malacañan Palace Monday night.

Dominguez said LANDBANK’s capital increase has been prudently managed and used, as the President instructed, to extend more loans to the agriculture sector.

By year-end 2021, LANDBANK’S loan portfolio for the agriculture sector stood at P247.9 billion, an 80-percent increase from the P137.6 billion in 2015, Dominguez said.

To assist the President in realizing his goal of inclusive and sustainable growth, LANDBANK is also the biggest lender to the local government units (LGUs).

“The robust capital infusion reinforced LANDBANK’s financial strength and allowed it to be an effective partner of the government in advancing its development agenda. We have used that strength to better serve the Filipino people,” Dominguez said.

LANDBANK’S total equity of P88.7 billion in 2015 steadily rose when President Duterte took office, from P152.49 billion in 2019 to P177.64 billion in 2020, and to P207.68 billion in 2021.

“On behalf of the men and women of LANDBANK, I would like to thank you, Mr. President, for the strongest support any President has provided for this institution,” Dominguez said.

Dominguez said LANDBANK’s support to other sectors of the economy “will help revive our enterprises and stimulate domestic economic activity.”

On top of fulfilling its role as a policy bank, Dominguez said LANDBANK also took the lead in modernizing the banking sector by being instrumental in the establishment of the Overseas Filipino Bank (OFBank), officially the first branchless digital-only bank in the country that now serves overseas Filipinos in 116 countries.

“Through your fulfilled promise to our workers abroad, they can now open bank accounts anywhere in the world, conveniently send money to their families, and save as well to grow their hard-earned incomes. They don’t have to go to a branch, they only have to use their cellphone or computer,” Dominguez said.

Dominguez also cited LANDBANK’S successful merger with the financially ailing United Coconut Planters Bank (UCPB) that took effect last March 1.

“I am pleased to report, Mr. President, that it has successfully implemented this merger with no major glitches or problems. Through the merger, we have reduced the risk of around 87 billion pesos in potential losses for the Philippine Deposit Insurance Corp. (PDIC) by putting the financially weak UCPB under the financially strong LANDBANK,” Dominguez said.

He commended outgoing LANDBANK President-CEO Cecilia Borromeo; Executive Vice Presidents Liduvino Geron, Carel Halog, Julio Climaco, Alan Bornas; and Senior Vice President Benjamin Bongolan for their almost three years of hard work and participation in making the LANDBANK-UCPB merger deal happen.

Dominguez said that as the distribution arm of the government’s social protection programs, LANDBANK’S cash transfers of P45.5 billion in 2015 to a total of 4.4 million beneficiaries grew to P133.6 billion in 2021 that benefited 10 million recipients nationwide.

“LANDBANK’s role in this effort served us well during the pandemic. The Bank will be instrumental in cushioning the impact of the Russia-Ukraine conflict for the most vulnerable sectors of the economy, because the amount you approved of 500 pesos per vulnerable family per month for 6 months will be coursed through LANDBANK. They will be the one to distribute the money through the bank accounts,” Dominguez said.

In helping achieve President Duterte’s goal of financial inclusion, LANDBANK provided bank accounts for 7.2 million previously unbanked national ID registrants, and will provide 6.3 million more bank accounts for unbanked Filipinos.

“This is the most effective instrument in building a truly inclusive financial system,” Dominguez said.

“Overall, I am happy to report that LANDBANK continues to be strong, stable and professionally managed,” he added.

This article was lifted from DOF's website (www.dof.gov.ph)


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LANDBANK: All transactions complied with law, above board, and in accordance with mandated procedures

English Version: LANDBANK strongly refutes any insinuations that its handling of government contractor accounts, particularly those related to the Department of Public Works and Highways' (DPWH) flood control projects, involved any irregular or unlawful activity. 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 funds deposited in the account of DPWH contractors originated from the Department of Budget and Management (DBM), released pursuant to the General Appropriations Act (GAA) as passed by Congress, and disbursed by the DPWH.  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. To facilitate fulfillment of government contracts, all creditors/suppliers/payees (i.e. contractors), are enjoined to open and maintain deposit accounts with banks such as LANDBANK, pursuant to DBM Circular No. 2018-14 and Bureau of the Treasury (BTr) Circular No. 3-2018. The Bank has fully observed “Know Your Client” (KYC) protocols, risk management procedures, and documentation requirements for the opening of their LANDBANK accounts. As mandated by the Anti-Money Laundering Act (AMLA): •  All cash withdrawals exceeding ₱500,000 are automatically reported to the Anti-Money Laundering Council (AMLC) through a Covered Transaction Report (CTR). •  Any transaction deemed “suspicious” at the time of execution is immediately flagged to AMLC via a Suspicious Transaction Report (STR). 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 documentation of the contractors—have all been properly established and recorded. There was, therefore, no basis under the law to withhold the release of funds. 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. The Bank remains committed to the highest standards of integrity, regulatory compliance, and public trust. At the same time, it stands ready to fully cooperate with the proper authorities and investigating bodies to help establish the truth and serve the ends of justice. LANDBANK also affirms that this matter does not diminish its ongoing work of carrying out its mandate—empowering the agricultural sector, supporting farmers and fishers, and advancing the goals of the farming community, which remain at the heart of LANDBANK’s mission of nation-building.   Filipino Version: LANDBANK: Lahat ng transaksyon ay malinaw, legal, at naaayon sa tamang proseso Mariing pinabubulaanan ng LANDBANK ang anumang paratang hinggil sa tiwaling paghawak umano nito ng accounts ng mga kontratista ng gobyerno, kasama na ang para sa mga flood control project ng Department of Public Works and Highways (DPWH). Ang lahat ng transaksyon na isinagawa ng LANDBANK ay naaayon sa batas at regulasyon ng pagbabangko sa Pilipinas, at mahigpit na sumusunod sa mga alituntunin at mandato ng pamahalaan. Nilinaw nito na ang pondong idineposito sa account ng mga kontratista ay galing sa Department of Budget and Management (DBM), na nakapaloob sa General Appropriations Act (GAA), na ipinasa ng Kongreso, at ibinayad ng DPWH. Ito ay malinaw na pondong galing sa gobyerno. Kaya’t wala ring kapangyarihan ang LANDBANK, o anumang bangko, upang pigilan o kuwestiyunin ang mga pondong naitalaga na ng gobyerno. Upang maisagawa ang mga proyekto ng pamahalaan, lahat ng kontratista nito ay obligadong magbukas at magpanatili ng account sa mga bangko, tulad ng LANDBANK, alinsunod sa DBM Circular No. 2018-14 at Bureau of the Treasury (BTr) Circular No. 3-2018. Siniguro ng LANDBANK na nasunod ang lahat ng “Know Your Client” (KYC) requirements at iba pang dokumentong kailangan bago mabuksan ang mga account na ito. Ayon sa mandato ng Anti-Money Laundering Act (AMLA): •    Kung ang cash withdrawal ay higit ₱500,000, awtomatiko itong nirereport sa Anti-Money Laundering Council (AMLC). •    Kapag may kahina-hinalang transaksyon, agad din itong iniuulat sa AMLC. Sa sitwasyong ito, malinaw na ang pondo ay galing sa gobyerno — may tamang gamit, at maayos na mga dokumentong isinumite ng DPWH. Sa makatuwid, walang batayan sa ilalim ng batas para pigilan ang paglabas ng pondo. Muli, nililinaw ng LANDBANK na ang tungkulin nito ay tiyaking tama ang pagproseso ng mga transaksyon nang naaayon sa batas, at labas sa mandato nito ang pag-iimbestiga. Ang LANDBANK ay patuloy na naninindigan sa integridad ng operasyon nito, pagsunod sa mga batas at alituntunin, at pangangalaga sa tiwala ng publiko. Handa rin itong makipagtulungan sa mga awtoridad upang makatulong sa pagpapalabas ng katotohanan at paghahatid ng katarungan para sa taumbayan. 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