CODE-NGO, media hold dialogue on PEACe Bonds

 

The Caucus of Development NGO Networks (CODE-NGO) conducted a roundtable discussion Monday with members of the media to clear confusion over the Poverty Eradication and Alleviation Certificates (PEACe Bonds).

The matter of the PEACe Bonds has stirred much publicity and controversy since the recent appointment of former CODE-NGO chair Corazon “Dinky” Soliman as Social Welfare Secretary by Pres. Aquino. It has also generated interest as the bonds are set to mature in October 2011. Throughout the discussion, CODE-NGO and some business reporters lamented that some facts about the transaction are not being properly reported, were twisted or just disregarded.

“We are here, conducting this dialogue because we want to keep the public informed. We want to be transparent and honest regarding the conduct of the PEACe Bonds transaction and how the trading gain from the private capital market, is being managed and used for poverty alleviation” said CODE-NGO executive director Sixto Donato Macasaet.

The net trading gain of P1.4 billion was remitted to CODE-NGO by its agent, RCBC, which bought the PEACe Bonds through a public auction from the government in 2001 and sold them in turn to private investors. The Arroyo administration, on the other hand, received the full net present value of the 10 year bonds at that time, which was P10.17 billion.

The 1.4 billion trading gain, which are in fact private funds, has since been entrusted as an endowment fund to the Peace and Equity Foundation (PEF), which manages and preserves the fund for poverty alleviation projects. The utilization of the fund as well as PEF accomplishments has always been made available to the public through its website, http://www.pef.ph/.

Former PEF treasurer Senen C. Bacani, however, clarified that neither PEF nor CODE-NGO has information on how the money generated from the auction of the PEACe bonds was spent as the P10.17 billion went to the government and not to the CODE-NGO network.

“Critics are barking up the wrong tree. CODE-NGO and PEF can explain how the 1.4 billion, a private fund, is being utilized for projects to assist poverty-stricken Filipinos, especially those in the rural areas. But if you want to know how the P10.17 billion government money was spent, it would be best to ask the people who ran the government at that time.”

Vitaliano Nanagas II, a banking and financial adviser, refuted allegations that the auction of the zero coupon bonds was rigged. The banks involved in the public auction acknowledged that the CODE-NGO offer was lower. The sale was conducted through an auction, wherein the lowest bid wins. CODE-NGO and its agent RCBC had to outbid 14 prominent banks to purchase the PEACe Bonds.

“We were out-bid,” said Nanagas. “I was working for a bank at that time and honestly, mas mababa talaga yung submission ng CODE-NGO.” (RCBC's bid for CODE NGO was truly lower than ours).”

CODE-NGO board members were asked if they were willing to face another Senate investigation into the PEACe Bonds. Macasaet and Bacani said they will continue to appear in inquiries whenever asked, and present documents supporting the legality of the PEACe Bonds. Moreover, regarding the current congressional hearings on the issue, they are hoping for a final report from the House of Representatives to bring closure to the matter, as declared by the Resolution author, Cong. Rufus Rodriguez. The Senate and the House separately investigated the PEACe Bonds in 2002, but neither ever released a committee report.

“We are willing and ready to appear at any hearing to show there is nothing illegal about the PEACe Bonds.”

Bacani ended the forum by assuring reporters that Hector Soliman, spouse of Dinky Soliman, was never involved in the PEACe Bonds transaction. “It is true that Hector was Corporate Secretary of the PEF board, but I assure you he had nothing to do with the PEACE Bonds. He has long worked with NGOs and is known to those in the PEF Board who come from NGOs. We asked him to help out with the SEC registration of PEF and that lasted for only about five months.”

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CODE-NGO: No law broken in PEACe Bonds deal

The Caucus of Development NGO Networks (CODE-NGO) today told members of the House of Representatives that rules were not bent to favor CODE-NGO in the sale of the Poverty Eradication and Alleviation Certificate (PEACe) Bonds.

CODE-NGO executive Sixto Donato Macasaet said in the House of Representatives Committee on Good Government and Public Accountability inquiry on the PEACe Bonds that the controversial transaction “followed all legally mandated and required government procedures.”

Macasaet added that the Arroyo government did not favor CODE-NGO, and even rejected their proposal for a negotiated sale of the bonds – even as negotiated bond sales are legal and have clear and generally accepted rules. The zero-coupon bonds were instead auctioned by The Bureau of Treasury to Government Securities Eligible Dealers (GSED). CODE-NGO and its agent RCBC Capital had to outbid 14 prominent banks to purchase the PEACe Bonds.

The sale of the bonds to CODE-NGO and RCBC raised P10.17 billion for the Arroyo government in 2001. The bonds were then resold by RCBC, for CODE-NGO, to private investors, thus generating the P1.4 billion trading gain that has been used as an endowment fund for poverty alleviation programs.

CODE- NGO also belied allegations that Social Welfare Secretary Corazon (Dinky) Juliano Soliman was involved in the Peace Bonds transaction. Soliman resigned as chair of CODE-NGO in January 2001 when former President Gloria Arroyo appointed her as DSWD secretary, and was hence no longer connected to CODE-NGO when the bonds were issued in October 2001.

Macasaet clarified that Atty. Hector Soliman, spouse of Sec. Dinky Soliman, also had no participation in the PEACe Bonds transaction. He only assisted the founding of the Peace Equity Access for Community Empowerment Foundation (PEF), which managed the endowment funds donated to it by CODE-NGO for poverty alleviation projects. PEF was registered with the SEC on Nov. 27, 2001.

PEF Board Members sought Atty. Soliman’s help in its founding year as “he is known as a lawyer working for the poor, and with NGOs.” Atty. Hector Soliman resigned as PEF corporate secretary on March 1, 2002.

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Code-NGO: Soliman, Deles are not accountable for the PEACe Bonds

Two Aquino cabinet officials being criticized for their alleged connection to the Poverty Eradication and Alleviation Certificates (PEACe Bonds) never participated in the controversial transaction, according to the NGO organization that conceptualized the PEACe Bonds in 2001 at a press conference in Quezon City this morning.

Department of Social Welfare and Development Secretary Corazon “Dinky” Soliman and Office of the Presidential Adviser on Peace Process Secretary Teresita “Ging” Deles have been tagged by several personalities as the prime movers behind the PEACe Bonds deal.

However, the Caucus of Development NGO Networks (CODE-NGO), which received an endowment fund from the sale of the government zero coupon bonds, said the two government officials “were never involved and did not receive any compensation from the sale of the PEACe bonds.”

Code-NGO chairperson Anna Marie Karaos said that Soliman resigned as chair of Code-NGO in January 2001 when she was appointed as DSWD Secretary by former President Gloria Arroyo. She was hence no longer connected to Code-NGO when the idea of the PEACe Bonds was being presented to concerned government agencies such as the Bureau of Treasury and the Bureau of Internal Revenue.

Deles, on the other hand, was never a member, much less an official of Code-NGO. Karaos said they were actually wondering why Deles was being baselessly linked to the PEACe Bonds.

At the same press conference, The Peace and Equity Foundation (PEF) was also explained to members of the media. PEF was established to preserve and manage the Php1.318 Billion endowment fund for poverty alleviation projects.

Veronica Villavicencio, executive director of the PEF, apprised the reporters on how the fund was being utilized for basic services, renewable energy, and microfinance endeavors in the country’s poorest communities. Most PEF projects are being implemented in rural areas in Mindanao and Visayas. "Information on how we have used the fund is reported regularly to our members and to the Securities and Exchange Commission and is available to anyone on our website", Villavicencio said.

PEF and Code-NGO, however, pointed out they cannot be held to account for the Php10.169 billion proceeds of the PEACe Bonds Auction which was paid to the Bureau of Treasury because it went to the “general funds” of the Arroyo administration. Sixto Donato Macasaet, Code-NGO executive director, said that only the Arroyo government could explain how the PEACe Bonds proceeds were utilized.
“The proceeds of the PEACe Bonds went to the general funds of the government. We could not suggest to them what to do with it because we just participated in the auction,” said Macasaet.

The Php10.169 billion that went to government coffers is different and separate from the Php1.486 billion that went to Code-NGO and PEF. "The Php10 bilion is government funds, while the Php 1.486 billion came from the sale of the bonds in the secondary capital market and are private funds", Macasaet added.

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