Senate to investigate DBP 'behest loans'

MANILA, Philippines -  The Senate will be conducting its own investigation into the alleged P660-million behest loans granted by the Development Bank of the Philippines (DBP) during the Arroyo administration, senators said yesterday.

Sen. Sergio Osmeña III, chairman of the committee on banks, financial institutions and currencies, and Blue Ribbon chairman Sen. Teofisto “TG” Guingona III have agreed to conduct a joint investigation into the DBP’s questionable loan transactions with former trade minister Roberto Ongpin and former board members and officials of the state-owned DBP.

Osmeña and Guingona said they would pursue the investigation separate from the pending complaint already filed before the Office of the Ombudsman.

“We will still investigate. This is in aid of legislation. This is not for criminal prosecution, but in aid of legislation. We need to look at possible amendments, not only of banking laws, but most especially on the charter of DBP, Land Bank (and other government financial institutions),” Osmeña said.

He said the Senate would still look into the issue although a complaint for graft and violation of banking laws against Ongpin and other former DBP officials.

“As far as I know, TG (Guingona) and I will call hearings sometime after all supporting documents we’ve asked them are submitted to us,” Osmeña added.

Last Aug. 5, the DBP, through chairman Jose Nuñez and president Francisco del Rosario Jr., filed criminal and administrative cases against its past board led by chairman Patricia Santo Tomas, president Reynaldo David, and Ongpin, in connection with the alleged P660-million behest loans that the bank had granted to an Ongpin company, Delta Ventures Resources Inc. (DVRI), to finance its acquisition of Philex Mining shares.

Also sued for violation of the Anti-Graft and Corrupt Practices Act, Civil Service Laws, the General Banking Law of 2000, the Bangko Sentral ng Pilipinas (BSP) rules and regulations and the DBP’s internal rules were former DBP chief operating officer Edgardo Garcia and former directors Ramon Durano IV, Alexander Magno, Floro Oliveros, Joseph Pangilinan, Miguel Romero, Franklin Velarde and Renato Velasco.

The DBP also named respondents in the case the following DBP officials: Armando Samia, Rolando Geronimo, Perla Soleta, Benedicto Ernesto Bitonio, Jesus Guevara II, Benilda Tejada, Cresenciana Bundoc, Josephine Jaurigue, Ma. Teresita Tolentino, Arturo Baliton, Justice Lady Flores, Marissa Cayetano, Rodolfo Cerezo, Warren de Guzman, and Nelson Macatlang, and DVRI’s executive secretary Josephine Manalo and DVRI stockholder Ma. Lourdes Torres.

Osmeña said they would invite Ongpin, the former DBP board members led by David and several bank officials to the Senate investigation to shed light on the circumstances surrounding the approval of these highly questionable loan transactions.

Aside from possible violations of the banking laws, the Senate committees will also inquire into the possible insider trading and violation of Securities Code because the more than half-a-billion peso loans to Ongpin were used to buy DBP’s P50-million shares at Philex Mining Corp. at P12.75 per share.

Osmeña begged off from discussing other issues surrounding the controversial loan transactions until after getting the pertinent documents from DBP.

While there is already a resolution filed by Sen. Panfilo Lacson seeking a legislative inquiry into the alleged behest loans, Osmeña said they are still awaiting the submission of pertinent bank documents involving the loan transactions.

Lacson filed Senate Resolution 553 calling for an investigation, not only of the alleged behest loans to Ongpin, but also other similar transactions with government banks and institutions during the Arroyo administration.

Lacson cited the purchase of a controlling interest by the government through DBP and the Land Bank of the Philippines in 2009 in the Metro Rail Transit Corp. (MRT) worth $180 million or roughly P7.5 billion.

Lacson noted the involvement of Ongpin, who was also a director of Philex Mining during the time of the questioned transactions, as well as Ongpin’s closeness with former first gentleman Jose Miguel Arroyo.

“The DBP charter contains provisions on confidentiality that control disclosure of information to third persons on financial transactions and, hence, creates a situation that allows the occurrence of these anomalous transactions to happen under a cloak of secrecy which constrains any investigation on these anomalies because it severely limits the right of the public to know and to hold public officials accountable,” Lacson said in his resolution.

Lacson is not discounting the possibility that Arroyo had a hand in the allegedly anomalous loan transactions.