The House Committee on Government Enterprises and Privatization will conduct an inquiry on the report released by the Commission on Audit (COA) in 2010, that the Land Bank of the Philippines was said to have lost almost half a billion pesos in loans to cooperatives and countryside financial institutions.

"The state bank wrote off P471.19 million in loans and that these accounts were classified as uncollectible because of the financial difficulties of the borrowers or the borrowers could not be located," said Rep. Rufus Rodriguez.

Rodriguez filed House Resolution 2129 together with his brother Rep. Maximo Rodriguez, Jr. (Party-list, Abante Mindanao) urging the House committee to look into the matter and determine why Land Bank lost almost half-a-billion pesos.

Rodriguez said state auditors traced the huge increase in uncollectibles to a lax lending policy adopted by the bank in 2009, which no longer required comprehensive surety agreements and other collateral requirements for some borrowers. The amount was an 882-percent increase over the P47.982 million in write-offs in 2009.

"Of the written-off accounts in 2010, 88.08% pertained to cooperatives, while 11.92% pertained to countryside financial institutions," Rodriguez said.

Rodriguez noted the important role of LB in the country's financial system and countryside development, citing that farmers and fisher folk, small and medium enterprises and micro-enterprises, livelihood loans and agribusiness, agri-infrastructure and other agri and environment-related projects, socialized housing, schools and hospitals benefit from its priority projects.

Rodriguez said Land Bank launched a more aggressive lending drive in 2010, reporting over P32 billion in countryside loans channeled through hundreds of farmers and fisher folk cooperatives and countryside financial institutions.

However, Rodriguez said, LBP lost almost half a billion pesos in loans in 2010 due to its laxity in granting loans.

Rodriguez said COA recommended that Land Bank revisit its policy on the granting of loans to cooperatives and countryside financial institutions, particularly on collateral offered by the borrower and that it should also not simply write-off the accounts but try to collect them using all available legal means.*