The Land Bank of the Philippines (LBP) could lose P2 billion in mortgaged properties from bankrupt Paper Industries Corporation of the Philippines (PICOP) whose prospects for revival are stymied by an ongoing impasse over its assets.
Francisco Buencamino, the court-appointed receiver of PICOP, told Trade Secretary Alfredo Pascual in a letter dated March 6, the impasse could result in a loss of investor confidence in any Philippine industry.
Buencamino was referring to the fate of third- party investors interested in helping the restoration of PICOP and have contributed in installing a new pulp and paper mill valued at P480 million. The mill was levied and was converted to scrap metals which Buencamino said were illegally obtained by PICOP’s labor union.
PICOP, once the biggest pulp and paper mill in Asia that employed 20,000 but now under Securities and Exchange Commission receivership, is bound to surrender its assets to Land Bank which foreclosed the properties due to loan non-payment.
Buencamino said amid a stay order from the Makati Regional Trial Court (RTC) which stops PICOP from disposing of its assets, labor claimants have “illegally” executed a levy with auction on PICOP’s properties.
Buencamino said that is not only in violation of the Makati RTC Branch 149’s stay order aimed at preserving PICOP’s assets. It also causes undue losses to Land Bank, PICOP’s biggest creditor.
