Republic of the Philippines

House of Representative:
Quezon City, Metro Manila

‘TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No__2418

Introduced by Hon. Felimon M. Espares

AN ACT
CONDONING THE PENALTIES ON THE LOANS SECURED BY THE NETWORK
CONSOLIDATED COOPERATIVE BANK, FORMERLY THE COOPERATIVE
BANK OF LEYTE, INC., FROM THE AGRICULTURAL CREDIT POLICY
COUNCIL IN THE YEAR 1997

EXPLANATORY NOTE

This bill seeks to condone the penalties imposed on the loans secured by the
Network Consolidated Cooperative Bank (NCCB) from the Agricultural Credit Policy
Council (ACPC) in the year 1997.

The NCCB was the first and largest consolidation of six (6) cooperative banks,
including the Cooperative Bank of Leyte, Inc. (CBLI), under the Strengthening
Program for Cooperative Banks of the Bangko Sentral ng Pilipinas. It was organized
to establish a national cooperative bank with a more solid capital position, stronger
management and a wider network to deepen its reach into the countryside and serve
as a preferred banking window of choice for the network of cooperatives that provides
necessary financial services to hundreds of cooperative organizations.

In 1997, the CBLI secured two (2) loans from ACPC under the expanded
Cooperative Bank Assistance Program, each loan amounting to One million pesos
(P1,000,000.00). CBLI failed to pay the loans on time thus, they incurred interests and
penalties. Upon the consolidation of the banks, NCCB assumed the loans and liabilities
of CBLI, including the ACPC loan. The NCCB then requested the ACPC that it be
allowed to pay only the principal and interests of the loans and asked for the
condonation of the penalties amounting to Three million six hundred three thousand
three hundred eighty-six pesos and ninety-nine centavos (P3,603,386.99) since it has
not yet recovered from its losses. The ACPC allowed the condonation of the penalties
subject to the payment of the principal and interests, which was accomplished by the
NCCB in 2017. Thereafter, the NCCB applied for the condonation of the penalties to
extinguish its remaining obligation on the two loans.


Considering the payments made on the principals and interests of the loans, the
ACPC recommended the approval of the request for condonation which the
Commission on Audit (COA), in the exercise of its power to compromise or release any
liability to the government, approved the same in its Decision No. 2022-300 dated 24
January 2022. Thereafter, the COA endorsed the request for condonation to the Office
of the President through the Executive Secretary. In a memorandum dated 07 June
2023, the Office of the President recommended the approval of the condonation of
penalties on the principal loans of NCCB, subject to the full payment of the principal
and interests of the remaining loans and endorsed the request to Congress. This is
pursuant to Section 36 of Presidential Decree 1445 and Section 20 (1), Chapter 4,
Subtitle B, Title 1, Book V of the Administrative Code of 1987 which requires the
approval of Congress, through the recommendation of the COA and the Office of the
President, for the compromise or release of any liability to the government exceeding
‘One hundred thousand pesos (P100,000.00).

The condonation of the penalties will allow NCCB to continue its mission of
developing communities through the delivery of innovative, accessible, and highly
competitive banking products and services. Further, it will also give a chance to NCCB
to pursue its objective of being a financially safe and sound consolidated cooperative
bank.

In view of the foregoing, the approval of this bill is earnestly sought.

—

FELT! M. ESPARES


Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

Nineteenth Congress
Second Regular Session

2418

HOUSE BILL NO.

Introduced by Hon. Felimon M. Espares
COOP-NATCCO PARTY LIST

AN ACT
CONDONING THE PENALTIES ON THE LOANS SECURED BY THE NETWORK
CONSOLIDATED COOPERATIVE BANK, FORMERLY THE COOPERATIVE
BANK OF LEYTE, INC., FROM THE AGRICULTURAL CREDIT POLICY
COUNCIL IN THE YEAR 1997

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Pursuant to Section 20 (1), Chapter 4, Subtitle B, Title 1, Book V
of Executive Order No. 292, otherwise known as the Administrative Code of 1987, the
unpaid penalties in the total amount of Three million six hundred three thousand three
hundred eighty-six pesos and ninety-nine centavos (P3,603,386.99) that accrued on
the two loans secured by Network Consolidated Cooperative Bank, formerly the
Cooperative Bank of Leyte, Inc., from the Agricultural Credit Policy Council in 1997,
with a principal amount of P1,000,000.00 each, are hereby condoned.

SEC. 2. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,