A loan agreement worth P999 million between the Kalinga provincial government and the Land Bank of the Philippines was blocked by the regional trial court (RTC).
RTC Branch 25 ordered LandBank to not release any amount from the loan that the provincial government had secured last July, to be used as a stimulus package for the economy.
The order was a result of a case filed by former vice governor James Edduba last Dec. 6 to annul the loan deal. The order will remain in effect until the court tackles the writ of preliminary injunction Edduba also filed.
According to LandBank, the Restoration and Invigoration Package for a Self-sufficient Economy towards Upgrowth for local government units (RISE Up LGUs), under which the loan was approved, was aimed at helping LGUs implement their economic stimulus plan.
Gov. Ferdinand Tubban was authorized to work out the loan deal with LandBank last May, in which he agreed to use 20% of the provincial government’s yearly internal revenue allotment (about P260 million) to pay it back for up to 15 years.
Edduba opposed this since the assignment of the IRA is outside the range of powers of local officials. According to the city’s second-in-command, it would deprive their successors the use of that portion of the IRA.
This 20% was typically used on sectors such as agriculture, health, social welfare and development, salaries for casual and project-based employees, as well as funding for barangay projects. Until such time that the loan is paid back, Edduba pointed out in his complaint, there would be budget cuts in these sectors.
He added that much of the loan would be allocated to projects outside of the Rise Up LGUs’ purpose. Among these is the improvement of three provincial roads (worth P539 million) and the ‘beautification’ of the Bulanao-Laya-Balong Provincial Road (worth P300 million). These funds could instead be used for concreting farm-to-market roads in the upland towns of Kalinga, Edduba said.
However, he denied that the complaint was politically motivated and said that certain groups in the province also were against the loan agreement.