Ex-DBP execs share different 'behest loan' meaning

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Friday, October 7, 2011

MANILA -- Former top officials of the Development Bank of the Philippines (DBP) cited Friday different meaning of what a behest loan means.

In a Senate blue ribbon committee hearing on behest loans extended by DBP to several companies connected to businessman Roberto Ongpin, former DBP president Rey David defined behest loan as defaulted, delinquent or nonperforming loan.

Former DBP director Floro Oliveros defined behest loan as under-collateralized and at behest of somebody who can make the loan possible.

Former DBP director Renato Velasco, on the other hand, defined behest loan as a loan granted at the behest of somebody influential and powerful.

For his part, former DBP director Alex Magno said behest loan is a cluster of loans made on the basis of marginal loans during Martial Law period.

Aurita Villoso, DBP internal audit, said loans were granted to Ongpin's Delta Ventures Resources Inc (DVRI) amounting to P660 million despite losses in operations in 2008.

She said among policies not followed were the submission of corporate papers and approval of credit investigation after the loan release.

In August, the DBP filed criminal and administrative charges against the bank's past board of directors, including its former president David, for granting the loan to Ongpin.

Solicitor General Jose Anselmo Cadiz earlier said the government has a strong case to hold Ongpin and other officials of the DBP criminally liable for the alleged irregular P660 million loan transactions.

Ongpin has denied any irregularities and has sued DBP chairman Jose Nuñez Jr. and president Francisco del Rosario for libel.

Ongpin failed to attend the Senate hearing as he went out of the country on September 23 before the invitation was sent to him.

He will only be back in the country by October 25.

Cadiz said the P660-million loan to DVRI may be considered behest since the borrower is undercapitalized, and the loan was under-collateralized.

He also said that Delta Ventures did not comply with the basic borrowing requirements mandated by banking laws and DBP’s Rules.

“In fact, it is surprising that the DBP’s Board even waived the evaluation of Delta Ventures’ financial capacity to repay the loan, which is a basic precondition to the approval of loans,” he said.

The fact that DVRI was allowed by the previous DBP board to withdraw its collateral even if the P510 million was still unpaid, thereby leaving loan without collateral during the period when the original collateral was withdrawn, the OSG added. (Sunnex)

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