Ombudsman orders 13 DBP officials' dismissal

MANILA, Philippines - Thirteen officials of the Development Bank of the Philippines (DBP) have been ordered dismissed by Ombudsman Conchita Carpio-Morales for granting P600 million alleged behest loans to Deltaventures Resources Inc. (DVRI) in 2009.

In a 54-page ruling signed last November 21, Morales said that the 13 DBP officials are administratively liable for grave misconduct and conduct prejudicial to the best interest of the service.

Aside from the dismissal from the service, the 13 officials were also given penalties of cancellation of their eligibility, forfeiture of retirement benefits, perpetual disqualification from holding public office and barring them from taking civil service examinations.

The dismissed DBP officials were former Directors Benedicto Ernesto Bitonio, Jr., Alexander Magno, Renato Velasco and Franklin Velarde; former Senior Executive Vice President and Chief Operating Officer Edgardo Garcia; former senior executive vice president and marketing head of the Branch Banking Sector Jesus Guevarra II; former vice president and Head of Regional Marketing Center-Metro Manila Crescencia Bundoc; BBS Manager for RMC-Western Luzon Arturo Baliton; RMC-WL Chief Accounts Management specialist Nelson Macatlang; RMC-MM Assistant Manager Marissa Cayetano; former AVP Teresita Tolentino; RMC-MM Assistant Manager Rodolfo Cerezo; and RMC-MM Assistant Manager Warren de Guzman.

The ruling said the DBP extended two loan facilities in the amounts of P150 million and P510 million in April 2009 and November 2009, respectively, to Deltaventures.

Morales concluded that the loans were behest as they conform to some of the criteria in determining whether a loan is behest, laid down in Memorandum No. 61 dated Nov. 9, 1992.

The criteria include:

-- It is under-collateralized; the borrower corporation is under-capitalized; direct or indirect endorsement by high government officials like presence of marginal notes; stockholders, officers or agents of the borrower corporation are identified as cronies;

-- Deviation of use of loan proceeds from the purpose intended; use of corporate layering; non-feasibility of the project for which financing is sought; extra-ordinary speed in which the loan release was made.

The Ombudsman said the "respondents deliberately participated in the haphazard and hurried processing and granting DVRI's loans, though obviously aware of doubts regarding the borrower's capacity to repay the loans, and the significant exposure facing the bank in relation thereto. Despite the irregularities surrounding the DBP-DVRI transactions, they insisted that the loans were not objectionable since the bank allegedly made a substantial profit therefrom xxx”.

The Ombudsman also ruled the administrative charges against former DBP President and Vice-Chairman Reynaldo David; former DBP Chairman Patricia Sto. Tomas; former Directors Joseph Donato Pangilinan, Miguel Romero, Floro Oliveros and Ramon Durano; former SEVP and Head of Marketing Sector Armando Samia; former SEVP Rolando Geronimo and former Senior Assistant Vice President Perla Soleta be dismissed since their separation from the service preceded the filing of the complaint.

Morales earlier ordered the filing of charges for violation of Section 3(e) of Republic Act No. 3019, otherwise known as the "Anti-Graft and Corrupt Practices Act", against the said respondents.

The Ombudsman, meanwhile, absolved respondents Josephine Jaurigue, Justice Lady Flores and Benilda Tejada as she found no substantial evidence to support the administrative charges against the three officials.