Behest loans and swindling

BACKBENCHER
Rod Kapunan
11/19-20/2011



The Senate would be wasting time figuring out whether the P600-million loan provided to former Trade Secretary Roberto Ongpin for his Delta Ventures Resources, Inc. was a “behest loan”. It would not even matter if it turns out to be one, for in the words of my relative columnist, Manong Emil Jurado, Congress has yet to enact a law that would define what constitutes a “behest loan” to make the officials of the Development Bank of the Philippines and Ongpin liable. What matters is that the loans were paid upon maturity, and earned P1.4 billion as a result.

It would have been different if the loan was not paid, or even if paid, only the principal was returned. That now would tally to what DBP chairman Jose “Pepo” Nunez, Jr. claims as lost business opportunities for the bank. Any bank, for that matter, would open its window to any borrower because earning interest it its business.

The media could be right in speculating that the alleged anomaly to accommodate Ongpin boils down to the possibility the Lopezes are still licking their wounds for the loss of their crown jewel corporation to Manuel Pangilinan of PLDT and to Ramon Ang of San Miguel Corp. Maybe they are blaming Ongpin for maneuvering the coalition reached by the country’s two behemoth corporations which saw them boarded out of the Meralco board. But the Lopezes could have prevented that if they had enough capital to muster in buying those shares of stocks to prevent that bigger group from wresting control of Meralco from them.

Hence, the counter revelation made by DBP’s former president Reynaldo David, while not exactly about behest loans, is telling of the continuing shortchanging of the government by debtor private corporations. This could not happen had the borrowers not enjoyed the pontifical blessings of the notoriously corrupt Arroyo government. It is an open secret that Mrs. Arroyo virtually made DBP and all government financial institutions her piggy bank to accommodate cronies willing to play the role of political jesters all for that ambition of wanting to remain in power.

The fallout in the raging word war between Ongpin and Senator Sergio Osmeña is the claim by David that the Lopez-family owed DBP P1.67 billion, but was written off in the bank’s ledger. Accordingly, P710 million was incurred by Maynilad Water Services, Inc., (which soured in 2003), P591 million by Bayan Telecommunications (which soured in 2001), P207 million incurred by Central CATV, Inc. (which soured in 2001), and P157 million by Benpres Holdings, Inc., and all that happened when Mrs. Arroyo was at the height of her glory after that infamous hijacking of the government.

To make sure the one-way ticket to the blues would appear legal, the minions of Mrs. Arroyo in Congress led by Speaker Jose De Venecia and in the Senate by Franklin Drilon (now a re-educated pro-Noynoy henchman) hastily crafted a law that would allow the disposition of those non performing assets at fire sale prices to anybody willing to resume their business operations. They crafted what they called Special Purpose Asset Vehicle (SPAV) Law of 2002.

But what the public did not know is that the new law would be used by delinquent borrowers as their special vehicle to get away with their loans because that would then allow government banks to write off their obligations. As one lawyer recalled, under the US Bankruptcy Reform Act, whether under Chapter 11 or Chapter 7, any corporation wanting to rid itself of its unpaid loans has to apply for bankruptcy, and when granted all its assets are to be disposed and distributed to its creditors according to procedure. After that, the bankrupt corporation is automatically dissolved and liquidated.

In our case, instead of those non-performing assets disposed as the SPAV Law proposed, it was used by private debtors to erase their obligations with an added premium of being allowed to operate their business without a consuelo de bobo promise to pay once profitability is regained, say even without interest.

Moreover, the brouhaha about loans resurrected an old ghost, one that involves swindling. The Caucus of Development NGO Networks-Poverty Eradication and Alleviation Certificates (Code-NGO-PEACe Bond) deal was a pressurized transaction to consummate fast the swindling of the government by people in the government. The only reason why no investigation has been conducted which saw the original P10 billion loan balloon to P35 billion is of the fact that those who masterminded it were native kangaroos capable of jumping high to the other side of the fence. It is for this reason why many of them are still basking under the wings of this “anti-mahirap” administration, and that the biggest share of the loot was consigned to an NGO operated by members close to the Church and using as conduit Rizal Commercial Banking Corporation owned by one also identified with the hypocritical yellow horde.

Of course, the hustlers would argue that no behest loan was involved much that they did not borrow from the government. On the contrary, they would say, it was the government that borrowed unbelievably from Code-NGO and from its duplicate partner RCBC that, in turn, resold those shares to the eight banks now in hot water for not paying P4.86 billion representing the 20 percent final income tax. Despite the P1.34 billion commission-profit earned by Code-NGO, with the P400 million divided as commission to those who conceived the idea of stripping-to-the-bone the government of its funds, it insist of not paying anything.

There is little doubt the scheme was not given the blessings by the one at the helm. It was coordinated because their pivot men in the government were also acting as private brokers. It was symbiotic for while one has no money, it has the privilege not to pay the tax. On the other hand, the other has the money, but would only be willing to buy if assured of not paying the 20 percent final income tax. Moreover, the one that merely used its saliva, despite the huge commission of P1.34 billion, now insist in getting an added premium of not paying the 30 percent capital gains tax.

So, comparing all these anomalies that happened under that notoriously corrupt administration, it would seem the elite and their confederates in government always manage to get away with their crimes of raking in billions of pesos all for a song. Yet, these hustlers are the same bunch of hypocrites that at the slightest rustle of destabilization would be the first to shout on top of their shrill voices for us to defend their shabby brand of democracy and freedom.

(rodkap@yahoo.com.ph)