MPLT earlier approved in principle the $1.5 million loan to CHC payable in 18 months at 5 percent interest.
MPLT Board Chairman Alvaro A. Santos told Variety, “Apparently, the corporation recalculated its capital needs and came up with the $10 million line of credit proposal. The Emergency Health Record project is still on the table and will be actively pursued for implementation in 2012 by the corporation.”
Asked to comment on House Bill 17-258 filed by its author Rep. Ramon S. Basa, Covenant-Saipan, Santos acknowledged that CHC needs $10 million line of credit.
Basa’s bill proposes the immediate transfer of $10 million to CHC and in return, MPLT will waive its constitutional requirement to transfer interest income into the general fund from 2014 to 2020.
In the last fiscal year, despite a highly volatile stock market, MPLT was able to transfer $2 million to the general fund after deducting all administrative costs.
Transferring a sum of money apart from what it is mandated by law to do would require legislation.
“In my last meeting with the corporation officials, it was agreed that legislation is needed to authorize the commitment of the MPLT annual distribution to the central government for the payment of this line of credit and accompanying assessed interest,” Santos said.
For Santos, Basa’s bill essentially addresses that requirement.
Asked by Variety if this bill would have any conflict with Senate President Paul Manglona’s S.L.I. 17-14 which proposes to transfer “all interest, dividends, and other gains” of MPLT to the Retirement Fund, Santos explained, “The Senate legislative initiative that relates to the transfer of distributable income from MPLT to the Retirement Fund is not a statutory measure but an initiative to amend an existing constitutional mandate.
So, this legislative initiative has to go through a process of approval in the Legislature requiring three-fourths support from each house and a concurrence by the governor then placed in the election ballot for approval or disapproval by the public or the electorate in a regular or special election.”
For Santos, “House Bill 17-258 is statutory.”
As MPLT is being eyed as funding source for several local projects, Variety asked if MPLT has resolved to put cap on diversified local investments, Santos said, “Yes, MPLT is going to establish a cap on diversified local investments and the trustees will take up this issue on its January 20 meeting.”
In an earlier interview, Santos had confirmed to this paper that the healthcare corp. was having difficulty jumpstarting the corporation’s operation effectively with seed money of only $5 million that comes in monthly increments of $400,000.
He also said earlier that CHC believes that major reforms are being instituted and cost cutting measures and savings or revenue generating efforts will not have immediate results but given time will produce positive financials.
This year, MPLT considered several other proposals for loans and investments aside from CHC’s proposals.
The MPLT board earlier approved in principle a $500,000 loan to Arctic Circle Air which the latter later decided to abandon in lieu of a $200,000 investment from MPLT.
This was subsequently disapproved by the board.
Then there’s the $10 million line of credit to the Commonwealth Development Authority as it seeks approval for its State Small Business Credit Initiative program application for $13 million grant.
Initially, MPLT was also looking at a $5 million loan proposal from CHC on top of its $1.5 loan proposal for its emergency health record project.
MPLT in the last two board meetings had been mulling revising its investment policy statement in view of the proposals.
The board continues to do due diligence in reviewing the proposals and has yet to decide on whether the revision of the investment policy will be considered.
