Press Release
November 29, 2011

Jinggoy seeks closure on PEACe bonds controversy

Senate President Pro Tempore Jinggoy Ejercito Estrada formally filed a resolution that directs Senate committees to reopen its probe on the alleged grossly disadvantageous transaction behind the Poverty Eradication and Alleviation Certificates (PEACe) Bonds and finally put closure on the case.

Under Senate Resolution 638, Sen. Estrada calls on the Blue Ribbon Committee (Committee on Accountability of Public Officers and Investigations) and Ways and Means Committee to conduct an inquiry in aid of legislation on the government's borrowing process in relation to the issuance of PEACe bonds and determine who are the accountable personalities behind this deal.

The Senate Committee on Finance launched an inquiry regarding the controversy during the early part of 2002, but was not able to come up with a report.

The so-called PEACe Bonds are ten-year zero-coupon bonds issued by the Bureau of Treasury, as auctioned on October 16, 2001. The government was paid 10 billion pesos but had to pay some 35 billion pesos when the bonds matured last month.

Sen. Estrada believes there is a necessity to ascertain the transparency of the government's borrowing process to prevent irregular issuance of government debt instruments in the future.

Financial analysts and observers say that the awarding of the bonds was marred with influence-peddling, political payback and potential conflict of interest.

The resolution further reads: "It is clear from the [foregoing] facts that the government issued bonds for the benefit of a private institution and paid some 35 billion pesos out of taxpayer's money when the bonds mature in contravention and in violation of the spirit of Constitution wherein no money shall be paid out of the Treasury except pursuant to an appropriation made by law."

"I am personally interested to know how much benefit did the national government gain from issuing these bonds ten years ago. The government will now spend billions of pesos paying this debt and in effect losing funds for other essential programs and services," Sen. Estrada states.

"We are all for poverty eradication and active civil society participation. But we must make sure that all anti-poverty efforts fall within what is legal and what is truly effective, and not making use of pro-poor agenda only to enrich oneself," Sen. Estrada ends.

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