Hontiveros seeks loan documents for SEA Games facilities

MANILA, Philippines — The Development Bank of the Philippines is being asked to disclose to the Senate documents relating to an allegedly anomalous P9.5-billion loan for facilities for the 2019 Southeast Asian Games. 

Hontiveros in a speech delivered to the Senate in plenary early in November said there were issues surrounding the multibillion-peso credit arrangement involving the Bases Conversion Development Aauthority and Malaysian developer MTD Capital Berhad, which entered into what she characterized as a suspect Joint Venture Agreement (JVA) for the construction of sports facilities in New Clark City.

She filed Senate Resolution No. 567, which urges the upper chamber to look into the matter amid supposed signs that the project was a "fake joint venture" funded with a "behest loan" — or a loan granted to firms favored by top government officials — disadvantageous to the Filipino people.

In a letter to lawyer Perla Celemente-Caran, DBP's corporate secretary, dated December 1, Hontiveros requested access to all documents and files relating to the loan extended by the bank to MTD Berhad around May 2018, including the following:

• Codified Approving and Signing Authority
• Minutes of the meeting in which the loan was approved, including the notice of agenda thereof, and all pertinent presentations
• Management memorandum issued in connection with the loan to MTD Berhad
• Loan or credit agreement
• Counsel's opinion or Legal Sufficiency issued by DBP's counsel

She also said that a hearing of her resolution by the Senate Blue Ribbon Committee was forthcoming.

'Fake' Joint Venture Agreement 

Last month, Hontiveros said that, under the JVA signed in February 2018, MTD was to "advance" the entire project cost of P8.5 billion, while BCDA was to provide the land on which the facilities would be built. However, she claimed that the MTD actually advanced nothing as the capital it was supposed to provide was funded by a P9.5 billion loan from government-owned Development Bank of the Philippines (DBP) which was approved in March 2018, one month after the JVA was signed in February.

Hontiveros revealed that the same JVA was first flagged by other government agencies, including the Commission on Audit which said that the project should have been been structured as a Build-Transfer arrangement under the Build Operate Transfer (BOT) Law in its 2019 Annual Audit Report.

The senator further quoted COA as saying that the agreement "was prejudicial to the interests of the government because, among others, the project should have gone through the more stringent public bidding requirements.” Given this, Hontiveros surmised that the project was packaged as a joint venture to evade rules on public bidding.

The Office of the Government Corporate Counsel (OGCC), the senator added, initially voiced discontent with the project, stating that it should have been structured as a build-transfer instead of a joint venture.

Former OGCC chief Rudolf Jurado, however, was replaced by Elipidio Vega and after this the OGCC issued a new opinion stating that the JVA was above-board "reportedly after undue pressure from the BCDA."

She reiterated these points in a press conference held Wednesday.

Hontiveros also emphasized that the investigation would in no way tarnish the achievements of Filipino athletes or the "world-class" facilities in Clark.

"Ultimately, it is about accountability. It is about ignoring and seemingly flouting public bidding requirements contained in our law. In the end, the money paid on the loan of a private company from a government bank… actually came from the people's money," she said in Filipino. 

Hontiveros added that she hoped the DBP would grant her request for documents in order to bypass the need to have them subpoenaed. 

BCDA: Everything above board and legal

In a statement posted to its Facebook page on November 11, BCDA maintained that the sports facilities in New Clark City were constructed "in a completely above board and legal manner."

It added that the Asian Development Bank (ADB) advised that a JVA would be the most advantageous arrangement for the government and that this recommendation was also "approved and confirmed" by the OGCC.

"There was no undue advantage accorded to MTD Capital Berhad as its unsolicited proposal underwent a rigorous negotiation process and a Competitive Challenge. The joint venture agreement between BCDA and MTD passed the scrutiny of applicable Philippine laws, rules and regulations," the agency said.

It also boasted that the sports venues were built "in record-time and were the country’s first modern sports facilities constructed since the 1930s."

The BCDA also thanked Sen. Pia Cayetano, who was incensed by Hontiveros' privilege speech, even though she admitted to missing most of it, and offered an impassioned defense of the facilities. Her brother, Rep. Alan Cayetano (Taguig-Pateros) — House speaker at the time — served as chairman of the Philippine Southeast Asian Games Organizing Committee.

The agency similarly thanked Senate President Vicente Sotto III, who told reporters in November that he is reluctant to probe the SEA Games given the country's achievements at those games. He added that a full-scale investigation could be conducted by the Office of the Ombudsman if warranted.

Hontiveros has made clear that the planned investigation does not reflect on country's athletes or their achievements.

BCDA president and CEO Vince Dizon is currently facing graft and corruption charges before the Office of the Ombudsman in connection with the conduct of the 2019 SEA Games.

 — Bella Perez-Rubio