Quedancor loans not covered by bank secrecy law--Escudero
By Veronica Uy
INQUIRER.net
First Posted 13:05:00 04/07/2008
Filed Under: Congress, Graft & Corruption, Banking, Laws
MANILA, Philippines – (UPDATE) The bank secrecy law covers deposits and not loans, so the state-run Quedan and Rural Credit Guarantee Corp. (Quedancor) cannot use it as an excuse to keep its borrowers list secret, Senator Francis “Chiz” Escudero said Monday.
"[The] Bank secrecy law covers deposits. I recall it does not cover loans. Quedancor is not a deposit-taking institution. It is a non-bank financing institution. Only banks are allowed to use deposit instruments," Escudero said.
The senator was countering the claim of chief presidential legal counsel Sergio Apostol that Quedancor “would be liable to borrowers if it publishes their names without their permission.” Apostol said borrowers could oppose the disclosure of their names and corresponding loans by Republic Act 1405, also known as the Law on Secrecy of Bank Deposits.
Earlier on Friday, Escudero called on Quedancor to publish the names of groups or individuals that took out loans from the swine-raising program after lawyer Harry Roque alleged that the funds for the program designed to ease a pork production shortfall might have been used for the 2004 presidential elections.
Quoting the law, Escudero said, “All deposits of whatever nature with banks in the Philippines, including investments in government bonds, has an absolutely confidential nature and prohibits the examination or inquiry into such deposits or investments.”
The senator who heads the ways and means committee said Quedancor could not use the bank secrecy law to hide its borrowers list. "The law was created to protect a person's deposit and not loan. Mortgages and foreclosures are even being published and made public instruments,” he said.
"All I'm asking for is to make public the list of borrowers. What was used in this program is public fund and is therefore subject to public accountability. We the Filipino public have the rightful claim to information on where our taxes go,” he added.
Escudero also said that such loans, being government fund, were automatically subject to government audit. He called on the Commission on Audit, as the primary institution in charge of examining proper use of public funds, to look into the use of the loans.
"Come to think of it, where is CoA all along in this picture? If they have already audited Quedancor, we also want to see their findings and recommendations on this particular issue,” he said.
Lawyer Harry Roque supported Escudero’s view, saying, "The law does not find application precisely because the 2005 COA report deplored that Quedancor was illegally engaged in quasi-banking activities without a license from the Monetary Board."
"Worse, assuming the law to be applicable, the Secrecy of Bank Deposits law applies only to deposits and not borrowers. There is no provision in our Bank Secrecy laws that would protect the identities of borrowers particularly where their existence is at issue," said Roque, a professor of the University of the Philippines.
The 2005 CoA annual report said that Quedancor had "unrecorded receivable of at least P747-million.”
In its 2006 report, the CoA concluded that almost P1.2 billion of Quedancor's loans could no longer be collected because of the lack of financial records and lack of clarity on who would be liable to pay for the loans.
With a report from Tetch Torres
|
