The sugar planters filed the cases to recover what they said was stolen from them during the Marcos regime and to hold Benedicto, the Philippine Sugar Commission and the National Sugar Trading Corp. accountable for their alleged crimes against the sugar industry.
PAPSI is also seeking the postponement of the sale of the remaining government shares in PNB on Aug. 12, claiming that the move is disadvantageous to the government and will have disastrous effects on the sugar crop loans of over 4,000 planters nationwide.
PAPSI, represented by its legal counsel, Danilo Hagad, has written Finance Secretary Margarito Teves asking for his intervention.
Teves, as a member of the BSP Monetary Board, is the planters’ last chance to secure a reasonable and fair settlement, Hagad said.
The crop loans, valued at P3 billion, are held and owned by the BSP through a dacion en pago agreement with the PNB and RPB in 1991 to partially cover and pay the over P20 billion in emergency loan advances of PNB to the then Central Bank.
Under the agreement, the PNB was also assigned as the collecting agent of the crop loans with a 10 percent agreed fee.
Hagad said there appeared to be nothing irregular in the transaction but the subsequent agreement between the same parties in 1997 was highly anomalous and would provide scandalous benefits to the soon-to-be fully privatized PNB.
The 2004 PNB Annual Report noted that the BSP entered into a buy-back arrangement for the sugar loans in 1997, which the planters claimed to be lopsided because the PNB, aside from being a collecting agent, is allowed to re-acquire the loans by merely "re-paying" the BSP the P3 billion payable by 2013 yet.
They added that the PNB will, in effect, source the payment of the agreed sum through the escrow funds consisting of all the collected amounts by 2013, aside from the 10 percent collection fee it has been receiving since 1991.
PAPSI also cried foul because the buy-back agreement was entered into by both parties without prior consultations with the borrowers.
Thus, the group said the agreement was grossly discriminatory because the sugar planters were denied of the opportunity to settle their accounts by paying the BSP the collateral release value of their crop loans.
"All this time the members of PAPSI were offering the government and the banks similar proposals which were never accepted nor entertained but to their utter surprise, the BSP turned around and agreed to a similar arrangement with the PNB," Hagad said.
The BSP is also in a disadvantaged position because the loans are the subject of pending court litigations filed by PAPSI and other parties, Hagad said.
In the event that the planters get favorable court decisions in these cases before the consummation of the 2013 buy-back agreement, the BSP stands to lose at least P3 billion, he said.
The group further argued that the transactions run counter to the primary purpose of Republic Act 7202 or the Sugar Restitution Law of 1991 which commands the government to restitute the losses suffered by sugar producers due to actions taken by government agencies during the Marcos regime.
"It is criminal then that instead of extending succor to these sugar loan borrowers as part of or in conjunction with the policy of restitution, the BSP opted to give undue benefit to the soon-to-be fully privatized PNB at their expense and prejudice," PAPSI said.