State-run Land Bank of the Philippines has rejected allegations of irregular activity following reports of unusually large cash withdrawals by contractors of the Department of Public Works and Highways (DPWH) involved in flood control projects.
In a statement, LandBank said ‘all transactions 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 accounts of DPWH contractors originated from the Department of Budget and Management (DBM), released pursuant to the General Appropriations Act as passed by Congress and disbursed by the DPWH,’ the bank said.
‘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,’ it added.
The lender explained that under DBM Circular 2018-14 and Bureau of the Treasury Circular 3-2018, government contractors are required to open and maintain deposit accounts with banks such as LandBank to facilitate the release of payments for public projects.
The bank said it has fully observed Know Your Client protocols, risk management procedures and documentation requirements in opening these accounts.
LandBank also underscored its strict adherence to the Anti-Money Laundering Act, noting that all cash withdrawals exceeding P500,000 are automatically reported to the Anti-Money Laundering Council.
‘Any transaction deemed ‘suspicious’ at the time of execution is immediately flagged to AMLC via a suspicious transaction report,’ the bank said.
‘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,’ it added.
The bank maintained that its primary role is to execute banking transactions in accordance with regulations, not to assume investigatory functions.
While distancing itself from the controversy, LandBank assured the public that it remains committed to ‘the highest standards of integrity, regulatory compliance and public trust’ and is ready to cooperate with any inquiry.
The controversy stems from a Senate Blue Ribbon committee investigation that flagged massive cash withdrawals by DPWH contractors for flood control projects.
Investigators are looking into whether the transactions are linked to alleged anomalies involving public funds.