Gov't set to review loan approval policies of GFIs

MANILA, Philippines - The Aquino administration is set to review the loan approval policies of government financial institutions (GFIs) such as the Development Bank of the Philippines (DBP) following the controversy that surrounded the multimillion-peso loan extended by the bank to former Trade Secretary Roberto Ongpin, Finance Secretary Cesar Purisima said yesterday.

“The loan approval policy is being reviewed. This is to make sure that the board is fully involved in the process and that the standards are aligned with the standards set by the Bangko Sentral ng Pilipinas (BSP),” he said.

He said that the Department of Finance led by Finance Undersecretary Carlo Carag conducted its own investigation but said that the department would leave it to the Office of the Ombudsman to determine if sanctions should be meted out to persons involved.

“The DBP is focused on making sure there’s normalcy in its operation. This was a transaction that happened in the past and a case has been filed in the courts. We will leave it up to the Ombudsman to determine whether those cases are valid to be pursued,” the Finance chief said.

He also said that the investigation the government is conducting is to make sure that policy will improve.

“This is really not just for the sake of investigation. This is also for the sake of improving policy- to make sure that if mistakes were made in the past, they will not be made again so we can adjust approval processes,” he said.

Current officials of DBP are claiming that the P660-million loan extended to Ongpin by the previous bank leadership resulted in “lost opportunity trading gains” to the tune of P412 million, a claim which the former trade chief has denied.

“They (DBP lawyers) should produce documents with regard to the internal audit findings, the show cause letters and the BSP letter. On our side, my lawyers will produce documents regarding the value of my collateral and the net worth of (Deltaventure Resources Inc.) as of 2008 and 2009 based on BIR submissions. Only in this way can it be settled who is telling the truth and who is telling lies,” Ongpin said on Wednesday.

He also said that he complied with the requirements when he secured the loan.

The loans allegedly helped Ongpin aquire Philex Mining Shares which were later sold to businessman Manuel Pangilinan.

A DBP lawyer, Benjamin Pinpin committed suicide on Aug. 2, citing in his suicide letters the loan controversy.