DBP denies granting P5.6-B behest loans

MANILA, Philippines - The Development Bank of the Philippines (DBP) has denied the claim of Speaker Pantaleon Alvarez that its previous board granted three private companies P5.6 billion in “behest” loans.

In a letter to The STAR, DBP assistant vice president for corporate affairs Marianne Garcia said the state bank “strictly follows and observes stringent credit policies and guidelines to ensure that loan transactions are aboveboard and compliant with relevant regulatory requirements.”

“May we assure the public that no behest loans were granted,” she said.

Garcia hinted, though, that the Commission on Audit (COA) had flagged the loans Alvarez questioned.

She said the loans were no longer part of the COA audit observations for 2016.

During a hearing of the House committee on banks last May 16, Alvarez said the previous DBP board bent bank rules and granted P5.6 billion in loans to three companies “belonging to one group, which is also into mass housing.”

He said P4.2 billion was lent for power projects, including one in Northern Luzon, while P1.5 billion was given “to refinance the previous loans.”

He said the COA noted “numerous deviations from credit policies” to accommodate the borrowers.

Alvarez did not name the borrowers, nor were they identified in the COA report on DBP transactions for 2015.

“I was alarmed by the report of the COA. The loans involved a huge sum of taxpayers’ money. Let us see if the money is still safe and fully secured. Let us see if the borrowers are paying for their loans,” he said.

Alvarez asked the committee on banks chaired by Eastern Samar Rep. Ben Evardone to dig deeper into the behest loans.

Former senator Alberto Romulo and bank president Cecil Borromeo promised to give the committee all pertinent documents related to the questionable loans.