Code NGO to shed light anew on Peace Bonds

MANILA, Philippines –  Officers of the Caucus of Development NGO Networks (Code-NGO) are again willing to be put on the hot seat as lawmakers are now reviving calls to investigate the controversial multi-billion peso Peace Bonds transaction.

In a press briefing yesterday, Code NGO executive director Sixto Donato Macasaet said that the group is willing to explain every detail surrounding the issuance of the 10-year Peace Bonds or the so-called Poverty Eradication and Alleviation Certificate.

“We’ve faced committee hearings. We will continue to be there. We’re very much willing to do that,” Macasaet said.

Code-NGO is a network of 12 national and regional development NGO networks with more than 1,600 affiliated organizations nationwide.

The government, through the Bureau of the Treasury (BTr) issued the bonds through an auction in October 2001.

Through its agent Rizal Commercial Banking Corp. (RCBC), Code-NGO purchased the bonds for P10.169 billion. RCBC was able to sell the bonds in the secondary market for P11.995 billion. It then remitted the profit of P1.826 billion to Code-NGO. The group paid its agent and financial advisers a fee from the profit. Excluding the fees, Code-NGO made a profit of P1.486 billion.

Another organization, the Peace and Equity Foundation (PEF) was established by Code-NGO to manage, preserve and manage the endowment fund of P1.318 billion intended for poverty alleviation projects.

Controversies surrounded the Peace Bonds because Code-NGO’s then executive director Marissa Camacho-Reyes who replaced Corazon “Dinky” Soliman as head of the organization, is the sister of then Finance Secretary Jose Isidro Camacho. Critics said the government favored Code-NGO.

The finance secretary and the national treasurer are the ones who conceive and approve bond flotations.

Soliman resigned as head of Code-NGO because she was appointed as secretary of Social Welfare and Development.

Code-NGO executives believe that with Soliman back in government, her critics are now reviving the Peace Bonds issue.

Macasaet said Cagayan Rep. Rufus Rodriguez called for an investigation again on the Peace Bonds transaction last November. The hearings are expected to continue next year.

By next year, the government would have to shell out P35 billion to pay the maturing bonds.

Macasaet claimed that the government had actually saved money because the 12.75 percent interest rate on the bonds was lower than the 16.93 percent prevailing rate of similar notes in the market at the time of the sale of the Peace Bonds.

“This translated to more than P1 billion in savings for the government. The government did not lose tax payments because the bonds were tax exempt to begin with - based on provisions of the Tax Code for long term investments with a maturity of more than five years,” Macasaet said.