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2 PhilExim officials, 5 others sued for P4.2B loss on loan guarantees
29 December 2014

Two officials of the Philippine Export and Foreign Loan Guarantee Corporation (PhilExim, formerly known as Trade Investment Development Corporation or TIDCORP) and five officers/shareholders of the privately-owned World Grannary, Inc. (WGI) are facing criminal indictments for the loss suffered by the government amounting to P4,228,391,731.60  in connection with the issuance of a loan guarantee facility in 2003 and 2004.

In a 42-page Resolution, Ombudsman Conchita Carpio Morales ordered the filing of a criminal information against former TIDCORP Executive Vice-President Rolando Alonzo, Account Officer Teresita Co, WGI representatives Alison Sy, Guillermo Sy, Derick Chester Sy, Renato Ang and Nena Ang for violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019).

Documents disclosed that in December 2003, TIDCORP approved the request of WGI for a guarantee facility amounting to P1.80 billion payable in ten years subject to several loan conditions.  In the implementation of the loan agreement, ABN-AMRO extended a bridge loan to WGI, with TIDCORP as guarantor.  Three years later, WGI failed to pay its first interest payment on the loan and as a result of its continued default, TIDCORP as guarantor, was constrained to pay the liabilities to the lender-banks.   As of 29 February 2012, TIDCORP paid the banks the total amount of P1.87 billion.  TIDCORP management then decided to conduct a transaction audit which resulted to the discovery of substantial irregularities in the transaction.

These audit findings were then referred to the Office of the Government Corporate Counsel which recommended the filing of criminal cases against Alonzo, Co and WGI representatives.

The Resolution found that Co and Alonzo were directly responsible for the implementation of credit policies, credit evaluation, credit approval, documentation, credit administration billing and collection process with respect to the WGI account. 

Ombudsman Morales stated that “it was the duty of Co and Alonzo to thoroughly evaluate and study the account of WGI” and “based on evidence, Co and Alonzo were the ones who supplied the [TIDCORP] Board with erroneous, fraudulent and incomplete information, which were used as the basis for the Board’s approval.”

Meanwhile, WGI representatives were included in the charge sheet since “a close scrutiny of the circumstances of this case clearly indicates that both the private and public respondents were involved in a scheme violative of the Anti-Graft and Corrupt Practices Act.”

According to the Resolution, the government suffered undue injury in the total amount of P4,228,391,731.60 for unrealized/forgone revenue, interest, advances, service and other charges, penalty, and gross tax receipts.

Meanwhile, the charges for violation of Section 4(a) and (b) of R.A. No. 3019 against respondents were dismissed due to lack of sufficient basis.

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