PCGG uncovers 130 behest loans worth P50 billion

The Presidential Commission on Good Government (PCGG) has uncovered 130 so-called "behest loans" worth a total of P50 billion.

PCGG Commissioner Nicasio Conti said of 419 questionable loans reviewed by the government watchdog — about P105 billion altogether — 130 were found to be behest loans.

The PCGG will file cases by June, said lawyer Angela Esquivel, chief of the commission’s legal department behest loans division.

Behest loans refer to amounts granted to individuals mainly connected or associated with late dictator Ferdinand Marcos despite their lack of qualifications.

The loans were granted by government financial institutions during the Marcos presidency including the Development Bank of the Philippines, the Philippine National Bank, PhilGuarantee and the National Development Corp.

They are considered "ill-gotten wealth" and are currently the subject of 51 criminal cases pending before the Office of the Ombudsman for preliminary investigation, 20 cases before the Supreme Court (for cases dismissed by the Ombudsman), and eight cases already filed and currently being prosecuted before the Sandiganbayan.

In May 2005, President Arroyo issued an executive order transferring the powers and functions of the defunct Presidential Ad Hoc Fact-Finding Committee, which was also then investigating behest loans, to the PCGG.

In August that year, the PCGG convened a team of lawyers and researchers, headed by lawyer Lester Flores, to investigate and prosecute individuals suspected of obtaining behest loans. The team was placed under Conti’s supervision.

The PCGG sought help from the Bangko Sentral ng Pilipinas, which formed a team of financial and banking experts to assist the PCGG team and serve as expert witnesses in the prosecution of behest loan cases.

The ad hoc committee recommended to the PCGG that 419 suspected behest loans be reviewed.

Of the 419 accounts, 130 were found to be "positively behest loans," meaning they fell within the criteria set by the PCGG.

The PCGG considers loans to be a behest if they were under-collateralized; if the borrower corporation was under-capitalized; if there was direct or indirect endorsement by high government officials such as the presence of marginal notes on loan applications; if stockholders, officer or agents of the borrower corporation were identified as cronies of the Marcos dictatorship; if there was deviation in the use of loan proceeds from the purpose intended; the use of corporate layering; non-feasibility of the project for which financing was being sought; and extraordinary speed in which the loan release was made.

The PCGG is currently evaluating several cases which it intends to file as "test cases" on a theory that behest loans may be considered ill-gotten.

The team is currently making changes in the handling of behest loan cases, including evaluation of loan documents retrieved from government financial institutions, to improve efficiency in prosecution and speed up recovery of money stolen from government coffers during the Marcos dictatorship.

President Corazon Aquino formed the PCGG in 1986 shortly after the outer of Ferdinand Marcos to recover billions of pesos believed stolen by Marcos and his wife, Imelda, and their cronies.

The Marcoses are believed to have stolen up to $10 billion during their 20 years in power. The government filed dozens of criminal cases against the Marcoses and their cronies that are still pending in court to this day.