Senate panel starts probe on DBP behest loans

MANILA, Philippines - The Senate Blue Ribbon committee chaired by Sen. Teofisto Guingona III will conduct a hearing today on the alleged large scale financial transactions involving P660 million in supposed behest loans extended by the Development Bank of the Philippines (DBP) during the past Arroyo administration.

The Senate committee wants to know whether there were indeed anomalies to the special privilege allegedly given to the different private companies reportedly connected to businessman and Marcos-era trade minister Roberto Ongpin.

Guingona said the committee seeks to determine possible amendments, not only on banking laws, but especially on the charters of the DBP, Landbank and other government financial institutions.

The committee hearing also aims to determine the involvement of Ongpin, who was then a director of Philex Mining, and also the possibility that former first gentleman Jose Miguel Arroyo had a hand in the loan transactions.

Ongpin is reportedly close to Arroyo.

Although DBP chairman Jose Nuñez and president Francisco del Rosario Jr. filed last August criminal and administrative cases against DBP’s past board of directors led by president Reynaldo David in connection with the alleged P660-million behest loans that the bank granted Ongpin’s Delta Ventures Resources Inc. (DVRI), Guingona said this should not be used as an excuse in appearing before the Senate.

The allegations were that the behest loans were used to finance the latter’s acquisition of Philex Mining shares that were subsequently sold at an astonishingly high price.

The committee will require the appearance of Ongpin, former DBP board members led by David, and several bank officials to shed light on the circumstances surrounding the approval of these highly questionable loan transactions.

Aside from possible violations of banking laws, the Senate committee will also inquire into possible insider trading and violation of the Securities Code.

Guingona said he also wants to look into reports that the half-billion peso loans granted to Ongpin were used to buy DBP’s 50 million shares in Philex Mining Corp. at P12.75 per share and subsequently sold to the group of businessman Manuel Pangilinan at P21.00 per share.

At the time of the sale, Ongpin and David were also both directors of Philex.

In published statements, Ongpin, through his lawyer Alex Poblador, welcomed the Senate investigation, saying this will provide his client an opportunity to prove that the loans were all above board.

Poblador also expressed hope that the probe will not serve as “a venue to smear reputations and grandstand before the media.”

He said the Senate should look into all angles, including the reported coercion employed against some DBP personnel in order to build a behest loan case against Ongpin.

Poblador expressed optimism that the Senate will also look into the circumstances behind the death of DBP lawyer Benjamin Pinpin, whose suicide last Aug. 2 was believed to be due to pressures from the present DBP board to pin down Ongpin and former officials of the bank.

The lawyer added that Ongpin had decried the recent move of the Aquino administration as political persecution, especially after the government ordered the declassification of banking information on the P660-million alleged behest loans.

Poblador said his client believes that all his dealings with the DBP were aboveboard and that he has nothing to hide.

“What bothers my client is the extent to which his prosecutors are going just to continue this fishing expedition against him,” Poblador said.