Laws regulating financial transactions are “so loose” that the Philippines risks discredit among investors unless these are addressed, Sen. Sergio Osmeña warned on Sunday.
Osmeña, chair of the Senate banks, financial institutions and currencies committee, also denied the charge of businessman Roberto Ongpin that the legislative committees looking into his allegedly questionable dealings with the Development Bank of the Philippines (DBP) had already prejudged the case.
“There is no prejudgment,” said Osmeña III in a phone interview with the Inquirer, adding that he expected the Senate inquiry into the propriety of Ongpin’s loans and buy-up of DBP’s Philex Mining shares to be “a really long process.” Ongpin’s deals, he added, were “just one (aspect).”
The two hearings conducted so far despite Ongpin’s absence showed “ang daming butas ng batas (there are so many holes in the law),” especially those concerned with insider trading,” Osmeña said.
“The problem is that the law is so loose. I’ve read them, eh. In the United States, someone who was involved in this kind (of deal) after a three-month trial was recently given an 11-year sentence and fined $10 million,” he noted.
“Here in the Philippines, if we don’t tie up the loose ends, our financial system cannot be credible… We need to tighten the laws to become more credible to investors,” the senator said.
Osmeña did not discuss the specific loopholes in the country’s laws.
Ongpin, a trade minister in the Marcos dictatorship, denied there was anything anomalous in his dealings with DBP, noting that his company’s P660-million loan was fully repaid. He said the DBP also made a good profit when he bought the bank’s Philex shares at P12.75 each. Charges that he had engaged in insider trading when he turned around and sold the Philex shares to businessman Manuel Pangilinan for P21, were criticism based on the “benefit of hindsight,” he said.
A Senate resolution penned by Sen. Panfilo Lacson had directed the Senate banks and blue ribbon committees to investigate the DBP for “alleged anomalous large-scale financial transactions” resulting from “behest loans and similar sweetheart deals…”
Lacson, sought for reaction to Ongpin’s comment about the prejudgement of his case, said: “What some of the senators may have prejudged are the anomalies involved in the loan transactions with DBP” and not Ongpin specifically.
“What’s obvious is the fact that the senators have already formed their individual opinions on the issue,” he added in a text message.