Manila Standard Today: DBP bares more exceptional cases of anomaly

September 28, 2011

by Rey E. Requejo, Manila Standard Today

President Aquino has ordered the Development Bank of the Philippines to declassify for purposes of investigation all information not only on the alleged behest loans granted in 2009 to Delta Ventures Resources Inc. owned by businessman Roberto V. Ongpin, but also on three more “exceptional cases of anomalous transactions” involving more than P17 billion in people’s money.

In line with the President’s transparency policy and anti-corruption drive, the Palace said ordered declassified were the details of individual accounts or specific banking transactions of the DBP on Global Air Services, Inc./Metrorail Transit Corp., sale of the shares of the Manila Electric Co., and investments in Lehman Brothers Holdings, Inc.

The DBP charter says only the President can declassify information on transactions made by the state bank whose primary mandate is to finance small and medium-size entrepreneurs as well as microfinance institutions to support the poverty alleviation program.

Mr. Aquino’s order was contained in a September 13, 2011 letter sent to DBP President and Chief Executive Officer Francisco F. Del Rosario Jr. by Executive Secretary Paquito N. Ochoa Jr. who signed the document “by authority of the President.”

Malacanang directed the DBP to make the disclosure of the information relative to the four alleged anomalous transactions “to the Office of the Solicitor General and other government agencies/bodies specifically clothed with power and authority to investigate and make inquiry under existing laws and jurisprudence.”

When sought for comment on the Palace’s decision, Solicitor General Jose Anselmo Cadiz said: “This is certainly a welcome development because the availability of the pertinent documents will beef up the case against those responsible for these questionable transactions, not only the P660 million behest loans awarded to Mr. Ongpin. It will make easier for the OSG and other investigating bodies to prosecute those who participated in these irregular transactions because we can lay all the facts on the table.”

“This clears the way for the true and transparent, but strong prosecution of these cases, without worrying that the documents will not be available. The declassification of information on the details of these anomalous DBP transactions will be a big boost to President Aquino’s zero-tolerance against graft and corruption,” Cadiz stressed.

Mr. Aquino’s declassification order came after DBP chairman Jose A. Nunez and Del Rosario filed criminal and administrative cases before the Office of the Ombudsman against Ongpin and several incumbent and former bank officials led by former president Reynaldo G. David, former chairman of the DBP board Patricia A. Sto. Tomas, and senior executive vice-president and chief operating officer Edgardo F. Garcia, in connection with the P660 million behest loans.

Cadiz, the lead counsel in the DBP case against Ongpin and company– had sought the preventive suspension of those charged administratively.

The complaint before the Ombudsman stated that the past board of directors of the DBP extended two “behest” loans of P150 million and P510 million to Ongpin’s DVRI despite its having only P625,000 in paid-up capital and despite its latest financial statements, which indicated that it suffered a loss of P98.76 million and retained earnings of negative P2.35 million.

Also covered by Aquino’s declassification order is a $90-million (roughly P3.87 billion at P43-$) DBP loan to Global Air Services, Inc., a foreign company, in 2008 for the purpose of acquiring the “economic” interest in the Metrorail Transit Corp. GASI also obtained another $90 million or roughly P3.87 billion loan from the Land Bank of the Philippines, also a government financial institution.

The DBP’s internal audit showed that “there was no borrower or loan applicant at the time the bank approved the loan on Dec. 3, 2008, and that Global emerged as borrower only at the time the loan was released on Dec. 23, 2008.”

The audit report said that Global had only $2 as paid-up capital in 2005 and has no financial capability when the $180 million loans were granted by DBP and LBP because, at the time, GASI had a net loss of $403,509 versus an asset of $5,364 and liability of $408,871.

One of those who signed as authorized representative of Global was a certain Josephine Manalo who was allegedly with the staff of Ongpin, the report said.

In the case of Lehman Brothers, former DBP president Reynaldo David had admitted during a 2009 Senate hearing conducted by Senator Edgardo Angara that the state-owned bank had $60 million (or roughly P2.58 billion) in exposures to the now bankrupt foreign investment firm.

Reports on the installment sale of Meralco shares stated that Global 5000 Investments, Inc. acquired the voting rights of the Social Security System, Land Bank of the Philippines, and DBP.

The transaction was done in 2008 and reportedly involved P10 billion.

But the same reports stated that while there had been no full payment yet on the transaction, the SSS, LBP, and DBP had allowed Global to control the Meralco shares to the detriment of the government financial institutions.


*Copyright Manila Standard Today 2005-2009


3 Responses to “Manila Standard Today: DBP bares more exceptional cases of anomaly”

  1. spike Says:

    Rey david connived with his long time associate Alfonso Cruz of LBP on this loan to Global

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