MAILBOX: Landbank clarifies subsidies
Dear Editor:
This is to clarify the report on the “subsidies” supposedly given to the Land Bank of the Philippines by the National Government (NG), as stated in your news article entitled Gov’t subsidies to GOCCs hit P53.705B in 2011 which came out in your March 9, 2012 issue. The report stated that: “The top five recipients of government subsidies in 2011 were the National Housing Authority (NHA) with P16.197 billion, the Land Bank of thePhilippines with P7.932 billion.”
We would like to explain that Landbank does not receive any financial assistance or subsidy from the NG for its operations.
The “subsidies” mentioned in your report as received by Landbank in fact pertain to the budget allocation for the Comprehensive Agrarian Reform Program (CARP) landowners compensation. The funds are exclusively utilized for compensation to owners of private agricultural lands covered by the CARP. R.A No. 6657 (CARL) which designated Landbank as the financial intermediary of CARP.
Unutilized funds which are earmarked for payment are placed under the interest-bearing Agrarian Reform Fund (ARF) of the NG which is being managed by the Trust Banking Group of Landbank. In effect, the funds do not enter the books of Landbank but are lodged directly under the ARF books of NG.
The allocation released this year through the Department of Budget and Management (DBM) totals P7.932 Billion and covers the years 2010 and 2011, with the following breakdown:
• P3,966,110,000 for the period of January to December 2010 received on October 2011; and
• P3,966,110,000 for the period January to December 2011 also received in 2011.
The term “subsidies” mentioned in this report is merely an accounting heading used by the DBM to lodge entries of this nature, for budget tracking purposes.
Apart from not receiving government subsidy, Landbank contributes to the government’s coffers. Earlier this year, Landbank remitted P5 billion in cash dividends to the National Government from its 2011 net income. The amount remitted forms part of Landbank’s support to the government’s revenue generation efforts and fiscal consolidation program.
We hope this helps straighten out the facts and finds space in your paper.
Thank you.
Very truly yours,
CATHERINE ROWENA B. VILLANUEVA
Vice President, Corporate Affairs Department
Land Bank of the Philippines
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