LAND BANK of the Philippines (LANDBANK) assured that its handling of government transactions and accounts related to anomalous state-run flood control projects were within Philippine banking laws.
“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 state-run lender said in a statement on Monday.
The government is currently investigating alleged corruption in state flood-control and infrastructure projects, with some lawmakers and Public Works officials being accused of receiving payoffs and using the national budget to make insertions to fund these kickbacks.
Under Department of Budget and Management Circular No. 2018-4 and Bureau of the Treasury (BTr) Circular No. 3-2018, all government contract creditors, suppliers, or payees, including contractors, are required to open and maintain deposit accounts with state-run banks, such as LANDBANK.
“The bank has fully observed ‘Know Your Client’ (KYC) protocols, risk management procedures, and documentation requirements for the opening of their LANDBANK accounts,” the bank said.
As mandated by the Anti-Money Laundering Act (AMLA), all cash withdrawals exceeding P500,000 are automatically reported to the Anti-Money Laundering Council (AMLC) through a Covered Transaction Report (CTR), and any transaction deemed “suspicious” at the time of execution is immediately flagged to AMLC via a Suspicious Transaction Report (STR).
LANDBANK said that the funds deposited by DPWH contractors originated from the DBM and were released in line with the General Appropriations Act (GAA) 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,” LANDBANK said.
LANDBANK added that it has properly established and recorded the legitimacy of the source of funds, including the government releases through DPWH, the lawful purpose of the payments, and the KYC account opening documentation of the contractors.
“There was, therefore, no basis under the law to withhold the release of funds.”
The bank reiterated it had no authority to investigate funds outside of its legal mandate but is ready to fully cooperate with the proper authorities and investigating bodies. — Aaron Michael C. Sy
