DBP explanation sought on ‘wash sales’
The body monitoring the performance of state-run corporations has sought the explanation of Development Bank of the Philippines (DBP) regarding its “wash sales” transactions last year.
Bea Nadine V. Barte, spokesperson of the Governance Commission for Government-Owned or -Controlled Corporations (GCG), said that they already contacted DBP to comment on the controversial dealings that resulted in P712 million in losses to the state-owned bank.
“If a GOCC is suspected to be erring, we study the issue and make a recommendation to the President on the action that may be taken. Penalization depends on the concerned agency, which has jurisdiction over the GOCC and/or the issue,” she said.
As for the investigation of the “wash sales,” the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) have the jurisdiction to investigate, Barte noted.
Both the BSP and the SEC had said that they were already investigating the matter.
The GCC is mandated to “evaluate the performance and determine the relevance of a GOCC to ascertain whether such GOCC should be reorganized, merged, streamlined, abolished, or privatized.”
The Commission on Audit (COA) earlier uncovered a series of illegal bond-trading activity at DBP made between January and March last year.
Early this week, DBP claimed that the transactions were “legitimate” and had been undertaken to limit losses and protect the bank’s financial condition as global market prices were falling. The bank said it could have lost P10.7 billion and compromised its viability had it not proceeded with the transaction.