Land Bank of the Philippines on Monday disputed suggestions that its handling of government contractor accounts, particularly those linked to the Department of Public Works and Highways (DPWH) flood control projects, involved any irregular or unlawful activity.
The state-run bank said that all transactions in question were “carried out strictly within the bounds of Philippine banking laws and regulations,” and in full compliance with government mandates and oversight requirements.
The funds deposited in the accounts of DPWH contractors, the bank said, originated from the Department of Budget and Management (DBM). These funds were released under the General Appropriations Act (GAA) passed by Congress and disbursed by the DPWH.
“These funds are legitimate government allocations, not private or unverified sources,” LandBank said.
“LandBank, or any other financial institution, has no legal authority to block or question duly appropriated government disbursements,” it said.
It said to facilitate the fulfillment of government contracts, all creditors, suppliers and payees (i.e. contractors) are “enjoined to open and maintain deposit accounts with banks such as LANDBANK,” pursuant to DBM Circular No. 2018-14 and Bureau of the Treasury (BTr) Circular No. 3-2018.
The bank said it has fully observed ‘Know Your Client’ (KYC) protocols, risk management procedures and documentation requirements for opening the contractor accounts.
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).
Any transaction deemed “suspicious” at the time of execution is immediately flagged to AMLC via a Suspicious Transaction Report (STR).
LandBank said that in this case, the legitimacy of the source of funds—government releases through the DPWH—the lawful purpose of the payments, and the KYC account opening documentation of the contractors were all properly established and recorded.
“There was, therefore, no basis under the law to withhold the release of funds.”
LandBank reiterated that its role is to “faithfully execute banking transactions in accordance with law and regulatory standards, and not to assume investigatory functions outside its legal mandate.”
The bank said it remains committed to the highest standards of integrity, regulatory compliance and public trust. It said it stands ready to fully cooperate with the proper authorities and investigating bodies.
LandBank also affirmed that the matter “does not diminish its ongoing work” of carrying out its mandate, which is “empowering the agricultural sector, supporting farmers and fishers, and advancing the goals of the farming community.”
