She said RCBC officials knew about the Poverty Eradication and Alleviation Certificates (PEACE) bonds as early as April last year or six months before the actual auction.
Meanwhile, Sen. John Osmeña, chairman of the Senate finance committee, asked President Arroyo yesterday to order National Treasurer Sergio Edeza to immediately return from abroad to shed light on the allegedly irregular issuance of PEACE bonds to RCBC.
Describing as "one big zarzuela" the bidding for bonds last Oct. 16, Oreta said RCBC officials had agreed on an 11 percent interest on the sale in the secondary market of the monetary instruments.
"How come RCBC Capital already knew about the plan to come up with this zero-coupon concept as early as April and had committed to sell them in the secondary market at 11 percent six months before the actual auction?" she asked.
"This aspect should be explored further by the Senate finance committee during the succeeding hearings on the PEACE bonds controversy to determine whether CODE-NGO and RCBC had acted in accordance with acceptable trading practices in purchasing and then selling its zero coupons for a cool P1.4 billion profit without having to invest a single centavo in this scheme," she said.
Oreta said she had gathered, based on testimonies by CODE-NGO and RCBC officials during the Senate hearing, that since CODE-NGO neither had the money nor license to participate in the treasury bureau’s auction of government bonds, the NGO worked out last year an agreement with RCBC – a duly accredited Government Securities Eligible Dealers – to underwrite or bid for the PEACE bonds.
"The bond float, which CODE-NGO chairwoman Maria Socorro Camacho-Reyes had described before the Senate committee as a ‘win-win’ formula for the government and the NGO umbrella group, had the hallmarks of a ‘done deal’ because RCBC Capital vice president Val Bagatsing had admitted during the hearing that they pegged an 11 percent interest rate on the PEACE bonds as early as April, or six months before the actual (treasury bureau) bidding and the eventual sale of the certificates in the secondary market," she said.
Oreta said the Senate finance committee learned that as soon as CODE-NGO –through RCBC –won the Oct. 16 bidding with an offer of 12.75 percent, the "civil society" umbrella group turned around and made RCBC capital –an investment arm of the bank –sell the PEACE bonds in the secondary market for a lower interest rate of 11 percent and earned an easy, investment-free profit of P1.4 billion.
"The admission by CODE-NGO officials during the hearing that they themselves had designed the concept involving these controversial PEACE bonds and presented their idea to the (treasury bureau) is highly questionable because this indicates that it was not the (treasury bureau) but the bidder, in this case CODE-NGO, through its agent-bank or underwriter RCBC, that made the rules covering this bond float," she said.