After phantom soldiers and fake veterans, now it’s “ghost” borrowers.
Senator Franklin Drilon warned that the government can no longer recover a total of P2.5 billion in loans that went to what he called ghost borrowers under the Agricultural Competitiveness Enhancement Fund (Acef).
The Senate earlier uncovered ghost soldiers and questioned the existence of centenarian World War II veterans at separate hearings on military corruption and the proposed 2012 budget of the Philippine Veterans Affairs Office.
Acef, put up in 1996 after the Philippines joined the World Trade Organization, was meant to enhance the competitiveness of farmers and fisherfolk, and to boost the country’s food security.
Citing a Commission on Audit (COA) report, Drilon said many of the business ventures that got loans from the P10-billion fund might have been opened “just to make an advance” from the government credit line.
“The government is clearly prejudiced in this case because the amount could not be collected anymore since these are clearly ghost borrowers,” he said.
Among the alleged beneficiaries were politicians close to the Arroyo administration.
Drilon noted that a total of 264 letters had been sent out to check on the status of the loans. But the government got no response from 140 beneficiaries, whose aggregate balance amounted to P2.1 billion, according to the COA report.
Twenty-seven of the recipients, whose balances were worth P370 million, were said to have returned the letters to COA “for various reasons.”
Drilon said borrowers whose combined loans amounted to P66.4 million “failed to pay back their loans due to the closure of the companies affected by typhoons and firms that no longer exist.”
Loans worth P1 million “may not be collected anymore because of death, insufficient address or unknown identity of the borrower,” he said.
Acef, funded by tariffs from agricultural products, is a mechanism aimed at providing financial support to the agriculture sector to increase its competitiveness in the global market.
The money from the taxes was supposed to be used to establish “safety nets” for those in the agriculture sector affected by trade liberalization.
In January, the fund was halted after officials saw irregularities in the program. Aside from the low repayment rate that left only P1.8 billion from the P10-billion fund, beneficiaries and former applicants also complained that past agriculture officials had asked kickbacks from them.
Agriculture officials said 110 accounts that drew funding from Acef were in arrears worth P3 billion. Many of these were projects worth P15 million and below.
Agriculture Undersecretary Antonio Fleta said Acef had a low repayment rate of 26 percent.
Agriculture Secretary Proceso Alcala said the beneficiaries did not find it urgent to pay back their loans as the program did not require any collateral or did not charge interest. In addition, many of the project owners turned out to be incapable of paying back the dues.
Some borrowers reasoned that they were left bankrupt by natural calamities, while others just vanished and could not be traced anymore, officials and records said.
Malacañang said individuals and groups that made a killing out of the fund should be unmasked.
“If there’s corruption, certainly we are eager to know who profited from that scam,” presidential spokesperson Edwin Lacierda said at news briefing in the Palace.
An audit conducted by the Department of Agriculture showed that Senator Edgardo Angara’s home province, Aurora, received a total of P300 million from Acef.
The province got P200 million in 2008 for the concreting of the Baler-Casiguran Highway, while the Aurora State University received P100 million in 2007 for its Enhancement of Technology-based Agribusiness Industry program.
Angara, a former agriculture secretary, cried foul for supposedly being “singled out” in the controversy surrounding the alleged misuse of Acef.
“It is irresponsible to single me out and impute irregularities without proof. Do not turn this into a witch-hunt,” he said in a statement.
Angara called for “an honest-to-goodness performance audit of Acef to resolve the controversy once and for all, instead of resorting to useless and damaging labeling that characterizes the fund as worse than the fertilizer scam.”
He said both the agriculture department and the Senate oversight committee on agriculture should conduct a “full and fair audit” of Acef. He was the author of the law establishing the facility.
Publish all names
“They should publish all the names of the beneficiaries of Acef, from Day 1 to the present, whether individuals, corporations, provinces or universities,” said Angara.
The senator said it would be easy to trace where the money went and how it was used. “I see no reason not to publish this information, unless there really are ghost beneficiaries.”
Angara said the P300 million received by Aurora was spent for projects that were channeled to the right beneficiaries.
“Just because I am a native of Aurora does not mean I made a profit from Acef,” he said. “We have results and outcomes to prove that the money was well-spent. There is nothing to hide.”
Conflict of interest
The militant Kilusang Magbubukid ng Pilipinas (KMP) said Angara had no moral ascendancy to conduct a probe of Acef because he was among those accused of benefiting from the fund.
“It appears that Angara has been used to practicing conflict of interest,” KMP vice chairman Randall Echanis said, noting that the senator is a member of the congressional oversight committee on agriculture and fisheries modernization (COCAFM).
KMP also assailed former Agriculture Secretary Arthur Yap’s statement that the low repayment rate did not make Acef a failure or a scam.
“It is the height of callousness for Yap to simply dismiss reports that only big businesses and corrupt bureaucrats benefited from the Acef while farmers suffer from the brunt of the massive flooding of imported agricultural products in the local market,” Echanis said.
He said farmers affected by the impact of agricultural trade liberalization were more than willing to testify that they did not receive a single cent from Acef.
Fund to reopen
The credit line is expected to reopen within the year, pending the Development Bank of the Philippines’ release of funds.
But Alcala no longer has full discretion in deciding who will get loans from Acef.
Loans amounting to P15 million and below used to require only the agriculture secretary’s approval after these had been passed by the reviewing committee.
Alcala said this rule was changed to include the two chairs of COCAFM, Senator Francis Pangilinan and Representative Mark Mendoza.
The change is part of the checks and balances instituted in preparation for the reopening of Acef.
“Before, the approval of loans P15 million and below was in the level of the secretary only after a review of the Technical Working Group. I did not approve of that anymore so the COCAFM chairs are now included,” Alcala said. With a report from Norman Bordadora