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13 DBP execs dismissed over behest loan fiasco

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Ombudsman Conchita Carpio Morales. INQUIRER FILE PHOTO

MANILA, Philippines–Ombudsman Conchita Carpio Morales dismissed from service 13 officials from the Development Bank of the Philippines (DBP) for granting P660 million in behest loans to Deltaventures Resources, Inc. (DVRI) in 2009.

In a 54-page review decision signed on November 21 but released Thursday, Morales dismissed former Directors Benedicto Ernesto Bitonio Jr., Alexander Magno, Renato Velasco, and Franklin Velarde; former former Senior Executive Vice President (SEVP) & Chief Operating Officer Edgardo Garcia; former SEVP & Marketing Head of the Brach Banking Sector (BBS) Jesus Guevarra II; former VP & Head of Regional Marketing Center-Metro Manila (RMC-MM)Crescencia Bundoc; BBS Manager for RMC-Western Luzon Arturo Baliton; RMC-WL Chief Accounts Management specialist Nelson Macatlang; RMC-MM Assistant ManagerMarissa Cayetano; former AVP Teresita Tolentino; RMC-MM Assistant Manager Rodolfo Cerezo; and RMC-MM Assistant Manager Warren de Guzman.

Morales said they were administratively liable for “grave misconduct and conduct prejudicial to best interest of the service”. Aside from dismissal, their eligibility has been cancelled.
There are also other accessory penalties included such as forfeiture of their retirement benefits, perpetual disqualification from holding public office and barring them from taking civil service examinations.

Based on the decision, DBP extended two loan facilities worth P150 million and P510 million in April 2009 and November 2009, respectively, to DVRI.

However, Morales said the loans were considered behest. He said this was based on Memorandum No. 61 dated 09 November 1992, which defined behest loans as:

a.     under-collateralized.
b.    The borrower corporation was undercapitalized.
c.     Direct or indirect endorsement by high government officials like presence of marginal notes.
d.    Stockholders, officers or agents of the borrower corporation are identified as cronies.
e.     Deviation of use of loan proceeds from the purpose intended.
f.     Use of corporate layering.
g.    Non-feasibility of the project for which financing is sought.
h.     Extra-ordinary speed in which the loan release was made.

“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 he 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…,” the decision stated.

Meanwhile, Morales said the administrative case against former President & Vice-Chairman Reynaldo David; former DBP Chairman Patricia Sto. Tomas; former Directors Joseph Donato Pangilinan, Miguel Romero , Floro Oliveros , and Ramon Durano; former SEVP & Head of Marketing Sector Armando Samia; former SEVP Rolando Geronimo; and former Senior Assistant Vice President (SAVP) PerlaSoleta should be dismissed since their separation from the service preceded the filing of the complaint.

With regards to the criminal aspect of the case, Morales said they could not find any substantial evidence to support the administrative charges against respondents Josephine Jaurigue, Justice Lady Flores and Benilda Tejada.


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Tags: behest loan , Conchita Carpio-Morales , DBP , graft and corruption , Ombudsman

  • randyaltarejos

    Application of the law is sinking in PH. By the way, what is the liability of Ongpin in this case? Will he be made answerable to criminal charges?

  • http://profile.yahoo.com/VBYEBJUQNNXHY5KTTBRYEDPLFE John

    What happens now to Ongpin and MV Pangilinan? Obviously these two are in cahoots and must be therefore prosecuted..

  • basilionisisa

    Congratulations, Ombudsman Morales! Bless you, Ma’am.

    Can’t believe these DBP people would be so stupid and unmindful of the consequence in the country’s still vulnerable economy, despite them already enjoying high salaries and benefits, not to mention respect and trust.

    Is greed so powerful that they would want to drag the banking sector down, and then the whole country’ financial system and be like Greece? Even their dishonest gains wouldn’t matter much if that happens, do they think of that?

  • http://profile.yahoo.com/SYG36KOOLRY47VA3ICPJJ5CQTQ ADD

    Alex Magno used to be fighting for good governance, kaso nun nakatikim ng milliones kay Arroyo, nawala na. Baka naging ganid pa.

  • http://profile.yahoo.com/VUFRGRCCA5JXOLKEVCJQ3FBW3Y Concerned Citizen

     Thank you Ombudsman.    Your impartiality was the  first sign of hope.  Now you are raising the level of political maturity in GOCCs.   You are a positive influence to everybody.

  • crab2008

    at least may na achieved na ang ombudsman..eh panu si gwen garcia gov ng cebu kelan ba aarestuhin ito? takot cguro ombudsman

  • Joseph Aquino

    Ongpin should also be penalized and if possibible, exiled to Hong Kong or anywhere in Africa. He is a disease.

  • 444mangyan888

    wow…!!!

  • http://profile.yahoo.com/UZF4OTGY4BREFE42RXP7FZJKFY Ding

    Maraming salamat…Ms. Ombudsman!  Good job for the Filipino people.

  • http://www.facebook.com/raul.pasmado Raul Pasmado

    anong nangyari sa borrower?kanino/yung marginalnote.



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