BSP denies violating own charter

The Bangko Sentral ng Pilipinas (BSP) dismissed yesterday as unfounded, charges that it violated its own charter by extending loans totaling P20.1 billion to the national government.

BSP Gov. Rafael Buenaventura said the funds, which were released in two tranches, could not be considered as loans since they were paid as subscription payment or membership contribution to the International Monetary Fund (IMF) in the name of the national government.

Misamis Oriental Rep. Oscar Moreno, who sought a House inquiry into the alleged questionable loan to the national government, has conceded that the law allows the BSP to extend short-term funds to the government to finance expenditures authorized in the annual budget.

Moreno and 16 other opposition congressmen led by Minority Leader Feliciano Belmonte Jr. (Lakas, Quezon City) have filed Resolution 1322 asking the House committee on good government to investigate the alleged violation of the New Central Bank Act as a result of the BSP's release of the P20.1 billion.

The first release, amounting to P6.8 billion, became due in November 1997, but has remained unsettled. The second, amounting to P13.3 billion, was made in February last year for a term of five years.

Both "loans" were reportedly non-interest bearing.

Moreno pointed out that under the new Central Bank law enacted in 1993, the BSP is prohibited from engaging in development banking or financing, as well as from extending long-term loans to the government.

He said the new law has enough safeguards to prevent excesses of the Central Bank which resulted in huge losses that were absorbed by the national government.

The new law abolished the Central Bank and replaced it with the BSP.