CODE-NGO on PEACe Bonds

We would like to clarify a number of points in your editorial entitled “Closure” last Oct. 27, and also in your news reports on the PEACe Bonds yesterday, Oct. 29, and today, Oct. 30.

First, contrary to what was stated in your editorial, Secretary Dinky Soliman never headed the Peace Equity Access for Community Empowerment Foundation or the Peace and Equity Foundation (PEF). Instead, she used to be the chairperson of the Caucus of Development NGO Networks (CODE-NGO), but had resigned in January 2001 when she became Secretary of Social Welfare and Development - long before the PEACe Bonds were bidded out in October 2001. Sec. Ging Deles was never a member, much less an official, of PEF or CODE-NGO.

Also, the PEF did not receive P1 billion in soft loans and grants from CODE-NGO. Instead, PEF received P 1.3 billion as a donation from CODE-NGO. This fund comes from the earnings of CODE-NGO from the sale of the PEACe Bonds in the secondary and private capital market - not from government funds. PEF has been managing this endowment fund and using its earnings to support various anti-poverty projects including potable water projects and social enterprises. PEF’s reports show that, from the earnings of its endowment, it has already provided in the past 9 years P 1 billion to support projects all over the country that have helped more than 1 million poor Filipinos. It has done this while building up its endowment fund from P1.3 billion in 2001 to P 1.6 billion now.

In your news report today entitled “Palace confident Dinky, others will hurdle CA”, it was stated that “Apparently responding to criticism that taxpayers would be paying P25 billion in accumulated interests, Macasaet said the debt papers carry a ‘compounded’ annual interest rate of 12.75 percent”. I would like to clarify that I was merely stating a fact that has been known since the time the PEACe Bonds were auctioned in 2001. The bonds are zero coupon bonds for which the government, instead of making semi-annual payments, will make a one-time payment of the principal and the accumulated interest after 10 years. There is nothing secret or surprising about this that I had to “apparently respond” to.

We would also like to take this opportunity to clarify statements by Cong. Danilo Suarez which was quoted in this report and in the report yesterday entitled “Soliman faces rough sailing before Commission on Appointments”. First, it is not true that “P800 million of the P1.4 billion went to the non-government organization Soliman worked for” and that “it is not clear who pocketed the remaining P600 million”. As we have stated above and in many other occasions including the Senate and House of Representatives’ investigations into the bonds in 2002 or more than 8 years ago, P1.3 billion has been donated to PEF as an endowment fund while P148 million was retained by CODE-NGO as its own endowment fund to support its member NGOs.

It is also incorrect that “the P1.4 billion was deducted from the amount that the government received, which means that only P8.6 billion was remitted to the treasury”. The full P10.1 billion was received by the Treasury in October 2001. It should be easy enough to verify that. The P1.4 billion which CODE-NGO got as a trading gain did not come from government funds, but from the private capital market.

We share your wish that this issue be brought to a closure. We have stated that while this issue has already been exhaustively investigated in 2002, we are open to an investigation by the Truth Commission or by Congress or any other body. But bringing this issue to a closure requires that we stick to the facts and bring out the truth. Along this line, I hope you will allow this letter to see print in your newspaper soon.