The most elaborate rip-off on the government by the yellow mob for which President Rody Duterte had to suffer heavily was the P35-billion Poverty Eradication and Alleviation Certificates (PEACE) Bonds crafted by the Caucus of Development NGO Network (CODE-NGO) which are no different from the Priority Development Assistance Fund conduits.
The government will likely have to cough up P5 billion that the Supreme Court (SC) ordered to release to banks from the amount that the Bureau of Treasury (BTr) secured as final withholding tax (FWT) in 2011 when the bonds matured.
CODE-NGO is run until now by yellow stalwarts Dinky Soliman, who became the social welfare secretary of former President Noynoy Aquino; Teresita “Jing” Deles, Noynoy’s peace negotiator; and Marissa Camacho.
Soliman’s husband, Hector, was also the first corporate secretary of Peace and Equity Foundation, which managed the proceeds from the bonds.
The bond issue is one of the failed deals under a public-private partnership (PPP), an investment model which former Noynoy even used as his administration’s economic development strategy.
The government was ordered by the SC to return P4.9 billion plus P1.4 billion in interest to banks.
Finance Secretary Carlos Dominguez earlier had said, “Every time I sign a check for some mistake that has been made in the past, my hands almost bleed.”
The SC issued its final ruling against the government in 2017 when Rody was already in power.
Shortly after the so-called EDSA 2 uprising that booted out former President Joseph Estrada, the Yuchengco bank RCBC, as representative of CODE-NGO, won an auction of P35-billion worth of 10-year, zero-coupon bonds that the BTr issued.
RCBC paid P10.17 billion for a bond that would pay up P35 billion 20 years later and, in return, CODE-NGO got a clean P1.4 billion in commission.
Prior to the auction, the BIR issued rulings that the then-proposed PEACE Bonds were not “deposit substitutes” and thus not subject to the payment of the 20 percent FWT.
After RCBC won in this 2001 auction, RCBC Capital was appointed as underwriter for the PEACE Bonds and distributed the debt papers to other banks on different dates.
The government bond issue was unique since it was issued not for any government need, but tailor-fitted for CODE-NGO, then headed by Ma. Socorro Camacho-Reyes, sister of yellow Finance Secretary Isidro Camacho.
The sale of the bonds was suspected rigged from the start as was the findings of a Senate hearing on the bond float.
Former Senate President Juan Ponce Enrile had said the government failed to protect public interest through the float since the Bureau of Internal Revenue even granted tax exemptions to it.
After the Senate probe where the senators threatened to file plunder cases on government officials, then Internal Revenue Commissioner Kim Henares issued a belated ruling revoking the tax exemption.
CODE-NGO leaders, including Danilo Songco, former executive director of CODE-NGO who was also a member of the board of the Development Bank of the Philippines, lobbied hard for the bond issue.
The BTr conducted a manual bid instead of the usual electronic biddings for the bond float, which was out of the regular.
It was a totally clean heist since even after Henares ruled that the bond issue should be subject to tax, the banks and not CODE-NGO were required to pay.
After getting RCBC to buy the PEACE Bonds for P10.17 billion, CODE-NGO immediately turned around and sold them to RCBC Capital for nearly P12 billion or a windfall of P1.83 billion.
In all, the government was screwed of P25 billion in the racket that went to banks just so the yellow mob-run CODE-NGO could secure a P1.83 billion in brokers’ fee.
The yellow swindlers led by Soliman and Deles should be made to account for robbing the public coffers through the con-job called PEACE Bonds.