Robbery in bond -- plain and simple

No remorse was to be gleaned from President Arroyo's defense of the PEACE bond fiasco that cheated the government of P5 billion in taxes just for starters, and that will then bleed the taxpayers of billions more - some P25 billion in interest payments to the bondholders (RCBC) just so a favored NGO could get its hands on P1.4 billion for its noble projects, including P100 million for annual expenses. In addition P200 million would also go to two characters who made the same sort of inventive claim as Al Gore. (Gore claimed he invented the Internet and only asked the American people to elect him president in exchange. A certain Red Mayo claims he invented zero-coupon bonds and deserves the P200 million he got for the deal.) And another P200 million to Rizal Commercial Banking Corporation for - on the one hand, it says, nothing, it just fronted for the favored NGO, and, on the other, everything for packaging the deal.

From the President there were no regrets over a deal that is at least controversial and certainly favored one group over all others in the gift of public funds for albeit charitable but indubitably private purposes. A deal that will cost the Filipino people P35 billion, and for nothing necessary or needed. For this bond was floated, not for a specific and compelling purpose as intended by law, such as a highway that could pay back its cost, but simply to generate P1.4 billion for CODE-NGO.

Indeed, Arroyo did not think it worth the trouble of explaining a scheme that the National Treasurer tagged as illegal right off the bat. No point in fretting. No room to even consider what's so wrong with a cronyism that has civil society as its crony. "Anyway, it's RCBC's money, not the government's," Arroyo said of the government's loss and the public's liability.

Well, she did say she had no charisma. But didn't she promise she had a surfeit of IQ to make up for her deficit in charm? RCBC's money?

A USAID adviser to the Bangko Sentral said in another context that if something confounds you in a financial scheme, "just follow the money". We have done that and it goes from a P35 billion liability of the taxpayers and a P5 billion tax loss of the government to some P25 billion in interest payments for the bondholders (RCBC), P1.4 billion for CODE-NGO, P200 million for RCBC and P200 million for two characters who stepped straight out of the lineup in the Luzon Petroscam whereby a bunch of alien stinking Chinese sought to put up their petrochemical plant with the government's money.

If this is the best way this government can figure to move resources in this society, clearly we are worse off economically and morally than we have been. The government lost money, as anyone can see, but not only that. The government gave up the money. Waved it off - as in waived all those taxes - with a most uncharismatic smirk.

And where there are losses, there are commensurate gains; where there are losers - the Filipino people - there are winners - CODE-NGO, RCBC, and those two characters who claimed to have invented the oldest financial instrument in the books. But the winnings end there. Even the anti-poverty programs that CODE-NGO vowed to help with the government's net loss cannot claim a gain. The country is poorer by the enormous debt the government incurred for it just so a favored group could play charity with big money. Or so it claims.

The extent to which their fellow civil socialites are traipsing around CODE-NGO's feelings is touching. Nobody is questioning the motives of Danilo Songco and CODE-NGO, the socialites stress. Oh, really? The Freedom from Debt Coalition (FDC) brought out those motives clear as day: CODE-NGO and their allies wanted to get their hands on P1.4 billion, by hook or by crook - and they did. And they won't give it up.

There is no escaping the conclusion that the PEACE bond scheme had been already cooked by the time Songco and the sister of finance secretary Jose Isidro Camacho (Marissa Camacho-Reyes) proposed it as a negotiated deal.

First they thought up and proposed the bonds. Then they secured sweeteners - tax breaks, financial incentives - that multiplied the government's losses. All from agencies under Camacho's wing - Finance, Treasury, the Bureau of Internal Revenue - and in the teeth of objections from the better officials under Camacho. When a hidden negotiation was too much for even those officials to stomach, and more than Camacho was prepared to risk for his sister, they resorted to a last-minute bidding that - in the curious manner of its conduct - can only be compared to the microwaving of an already cooked dish : the PEACE bond offer tailor made for CODE-NGO and its front, RCBC, served piping hot on a silver salver.

The bidding rules were altered to circumvent and ultimately do away with a more transparent electronic process, while CODE-NGO and RCBC kept all the information to themselves until it was too late for anybody else to bid properly for the bonds.

Finally, they calmly walked away with all the prizes, beating odds that FDC calculates at less than 24 in 3 million chances (assuming a level playing field).

Clear enough for anyone to see but those who won't and, as usual, the perpetually startled presidential spokesman Rigoberto Tiglao, who described the scheme as so "baffling" it lends itself to deliberate misinterpretation by the opposition. The sweet deer is either admitting he is stupid or the people are. The people understand the deal well enough. The FDC makes it all so clear, in fact, that the only remaining question is: But why shouldn't we question the motives of the NGO involved?

President Arroyo, on the other hand, should be smarter than her startled spokesman. Smart enough, at least, not to dismiss this scandal as a mere smear job against Camacho. For to do so defines a monumental weakness in the product of EDSA 2. For this issue is a gut check. It tests the ethics of a leader, the economics of an economist and the morals of a moralist, even as it has revealed the strong stomach of an NGO, a bank, and two suspicious characters - none of whom want to give back the obscene profits they made out of this sorry excuse for a financial scheme.

We don't want Lito Camacho to resign. We want him to stay - at least long enough to unravel this deal, get the Filipino people off the P35 billion hook his sister hung them on, and get her confederates to return the killing they made out of a crime that can only be described by our title. (Robbery in Bond--Plain and Simple)

TODAY was a Philippine news daily broadsheet. It ceased publication in 2004.

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