SANTOS - 3 August 17, 1998

P.O. c Deputy Speaker Abueg .

6:50p.m.

THE DEPUTY SPEAKER (Rep. Abueg) .... the Chair will be willing

to accommodate other matters to be taken up if the Gentleman from Makati

wishes to share his time.

REP. ARROYO. Well, I have no opinion, one way or the other,

and that I really would leave that to the Chair.

THE DEPUfY SPEAKER (Rep. Abueg).

The Gentleman from

Southern Leyte may proceed.

REP. SALUD0. Thank you, Mr. Speaker, and may I repeat, if the

Gentleman from Makati yield to a few questions.

REP. ARROYO. Gladly to the Gentleman from Southern Leyte.

THE DEPUTY SPEAKER (Rep. Abueg).

The Gentleman from

Southern Leyte may now proceed with his interpellation.

REP. SALU DO. Thank you, Mr. Speaker.

Your Honor, in charge number "8" and I quote: "Manuela

Corporation applied for and was granted aloan of one billion by the SSS, a

government financial institution. . Another two billion pesos loan would be

syndicated with another government financial institution, the GSIS. Total

syndicated loan from the 1\'10 government financing institutions - three

billiun.,'9~

(11;100

SANTOS - 3 August 17, 1998

P.O. - Deputy Speaker Abueg

Your Honor, do we have documents to show that indeed an

6:50 p.m.

application was made for these two GFIs and if such applications were

considered by the board of these two GFIs and the same were approved?

REP. AR."R.OYO. Mr. Speaker, in response to the question of the

Gentleman, I would say, yes. I do have here with me Resolution No. 427,

series of 1998, of the Regular Meeting No. 21, on 15 July 1998, where the

title is: "SSS Participation in the Three Billion Syndicated Term Loan

Facilities under a mortgage trust venture of the Manuela Corporation to the

extent of five-hundred million to one billion subject. to revised terms

approved."

This is a very bulky piece of paper but . . .

REP. SALUDO. Thank you, your Honor, thank you.

But do we also have, your Honor, any document showing that the

same application as considered by the board was ever released by any of

these two GFIs?

REP. ARROYO. Mr. Speaker, the application was approved. But

any financial institution even after the approval of the loan there is a period

before the releases are made. In the meantime that the processing of the

release of the money will be made carne this news item and President

Estrada aborted the release of the monej/

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SANTOS - 3 August 17,1998

P.O. - Deputy Speaker Abueg

REP. SALlJDO. So there was no release, your Honor, of these

6:50 p.m.

amounts mentioned in your Charge No. 87

REP. ARROYO. Yes, some sort of a frustrated= - it is a frustrated

graft.

REP. SALUDo.

Well, your Honor, I understand maybe it was all

attempted or frustrated but we will understand that under the charges,

unfortunately, we can presume that there are no enabling laws under which

these charges are filed and therefore there is 110 penalty whatsoever for any

attempted or frustrated act, is that correct, Mr. Speaker?

REP. ARROYO. Well, you see, Mr. Speaker, when we talk here of

indiscretions of a Member of Congress, we talk here about our conduct,

about how we should comport ourselves.

Now, if this loan was granted in the manner it was presented,

therefore this is a terrible loan. Let me state- - This was the first meeting of

the. Board of the SSS Commission presided by the new chairman a certain

Arellano. On that day, his first meeting, this was approved, one billion

loan. We ask the question, how in the world can such a loan be approved. .. ,,/1

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LEDESMA· 3

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August 17, 1998

6:55p.m.

(PO - Rep. Abueg)

REP. ARROYO. . .. can such a loanbe approved in one day? I have here the papers but I could not getthe annexes. Management kept it. But it's explained, Manuela Corporation is a failing' corporation but it was given a one billion loan. It's not only one billion, this is only part of a three-billion syndicated loan. A syndicated loan, as everyone knows,is a group of financial institutions, included in that is the GSIS which if the SSS

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loan of one billion was granted,~ two billion loan from the GSISwouid follow.

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NoW,what makes this loan very unusual is this, historically, SSS does not grant a

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direct loan to anyone. What SSS does is, give the monies to banking institutions even if

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the rate is lower. The, banking institutions re-Iend it Or re-investit. Let us say that the

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goingrate of interest is 16%, commercial rate: SSS is willing to give ltfor 12%, 13% to a banking instItution but their ":Janey is safe because it's a banking institution that they deal

with. So, for less interest they are safe but they will never invest it directly. Now, this was

given directly to Manuela Corporation, You ask the question, how in the, world did Manuel~ Corporation ever get 'the one, billion ioan?As a matter of fact, part of the

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problem here and the reason for the policy of the SSS and I would suppose the GSIS in

being very careful about funds is that these are trust fundsof the members and so, instead of just giving it outright in the form of direct loans, prudence dictates that they

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give itto banking institutions. But this One is really out of this world, this, kind of loan.

REP.SALUDO. Well, Your Honor, thank you for your detailed explanation but I

don't know whether this is out of this world or not, but the question is simple, Has any

amount been released by this SSS orGSIS for that matter?

LEDESMA-3

August 17,1998

6:55 p.m.

REP. ARROYO. The reason forth is why it was quote ... REP. SALUDO. No, no.

REP. ARROYO .... or was exposed is this, from what I have gathered. This Mr.

Arellano, the president, was very wise. He talked to every member of the Commission, the commissioners.who were all Ramos appointees, talked them over to approve it. Since he does not have to vote because he is the chairman, he has no responsibility.

Now, .1 interviewed some of the commissioners ~ although they don't want to be quoted - whatriled them and what got their goat was this, there was a·statement from the Erap administration, chastising the Ramos administration for behest loans. They felt ' aggrieved that here you have the Erap administration calling or branding some of the loans during the Ramos administration as behest loans. Now,they were appointees of President Ramos. Theywereasked tovotejor: it. So, all ottnem voted for it. So, somebody squealed and this is how it carne out. That is the story.

REP. SALUDO: Well, thank you again for that detailed explanation, Your Honor. REP. ARROYO. .But I cannot see the minutes or rather, I have been able to get some of the papers but the company profile of Manuela lhave not been able toget. .. tell

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Mlluna

August 17,1998

7:00 p.m.

(P.O. - Rep. Gullas)

REP. ARROYO. ...1 have not been able to get. All I am able to get are

merely papers which could be taken elsewhere but these are papers which could

be subpoenaed because I think this is one anomaly so early in this .administration

and I think Mr. Arellano has no excuse here.

REP. SALUDa. Thank you again, Mr. Speaker - Your Honor.

Again, may I reiterate for the last time, was there any release of the amount

to Manuela Corporation?

REP. ARROYO. Mr. Speaker, I think I have answered the question. I don't

know why the Gentleman keeps on repeating that. lf theidea is to say that there is

no offense committed.'! have already said it - that there was no release. It's a

frustrated graft

REP. SALUDa. Mr. Speaker, then it is very clear that while it appears on

charge eight (8) that it is made to appear that there was' a loan application

approved, the way the charge is worded and presented, it would give us the

impression that it was released. That's why I just wanted to find out from his

Honor that there WaS no release of these funds and at the most it was an

attempted acton the part, probably, of the borrower and there was no liability

whatsoever. And if there is, on the basis of the explanation of the Gentleman from

Makati, then probably we can amend this charge to include the detailed

explanation on how this loan was applied for, how it was processed and how, in

the opinion of the Gentleman from Makati, it turns out to be one out of this world

loan. Is that correct, Mr. Speaker - Your Honor?

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Mlluna

August 17, 1998

7:00 p.m.

REP. ARROYO. Mr. Speaker, I cannot agree to amending anything

because my charge reads this way. "Manuela Corporation applied for and was

granted a loan of P1 B by the SSS, a government financial institution. Another

P28 loan would be syndicated with another government financial institution, the GSIS - total syndicated loan from the two GSIS, P3B." There was nothing said

here about releases.

REP. SALUDO. Okay, Your Honor. If that is the case, to be fair to the

parties involved because this damages not only the image of our leader in the

House but also the membership as well, probably, Your Honor, we can include here that although the amount approved was not released, the explanation of Your Honor on how these things were made probably could be incorporated to make it very clear that despite the fact that the loan was not released, there is still a liability because of the "scandalous way", in your words, how this loan was

processed, how this loan was approved. Do you agree, Your Heinor?

REP. ARROYO. Well, it's scandalous because if it was' not caught

because the Ramos' appointees complained, then this loan would have gone

through. I mean, I would suppose that we can let this stay as it is and again

Speaker Villar should speak-out about his relationship with the Rigueras, in fact

he is linked here because o.f the Rigueras. Is he or is he not related to the

Riqueras? I mean, that's all.

REP. SALUDO. Now, Your Honor, I will just have one more question on .

your charge.sheets.

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August 17, 1998

7:00 p.rn.

I'm referring to Charge No. 10 and I quote: "The Comprehensive Agrarian Reform Program, CARP, is being undertaken in obedience to a constitutional mandate. All lands covered by CARP cannot be used for residential, agricultural, industrial or other uses unless a clearance, conversion or exemption for a particular property is first issued by DAR."

Earlier, Your Honor, you have explained and exemplified your charge that the lands or the companies which are developing or have .. ·.IW

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MALIWAT-3

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August 17. 1998

7:05p.m.

(PO - DEPUTY SPEAKER GULLAS)

REP. SALUDO.

"

,which are developing or have

developed already 5,950 hectares or almost 60M square meterB

of CARP lands into residential aubdav Le Lcrie , the size of

which, according to Your Honor, ,is approximately the size of the square meters of both Lae Pf.ne.e ' and Makati, is that

correct?

REP. ARROYO. That 1s correct, Mr. Speaker. REP. SALUDO. Thank you, Your Honor. '

Is it the position therefore of the Gentleman from

Makati that 5,950 hectares or almost 60M square meters of

CARP lands developed by the companies of Mr. V1llar did not

have 'a single appropriate DAR 'issuances that would authorize

such lands to be used for residence purposes?

REP. ARROYO. That is oorrect, Mr. Speaker. This first

came out in a 3-part series in the Lnqu i rer, Then I tried

to ,find out how true this is.

And the findings are that

there has been 'no permi t .

What the Villar companies did

were to get secondary and tertiary permi ta but never the

first permit. What does that mean? They got the municipal permi ta, they had the land tax declarations converted from

agricul tural to residential, they got aome others but not

the DAR.

We have asked some people to go to

Secretary Morales and "so far he has not given any answer

because they are more or less informal overtures. The fact

of the matter is that. this matter should really be

MALIWAT-3

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"Auguet 17, 1998

7:05p.m.

investigated because if DAR played around and toyed with 60M square meters without permits, this is a very serious matter.

Now, wbo did it? We can only get that through a subpoena of Secretary Morales and for him to come out outright and tell him, what is the truth? Because this is not only in Met.ro Manila, this is allover t.he country. So, Secretary Morales must answer this quest.ion and not cover up for the misdeeds of e I ther "his predecessor or other employees. This is the issue here. In fact to me, from an ideological point of view, t.his is most important because many people were deprived of their lands because of this. But this can only be answered if we call Secretary Morales here on e Question Hour. There is such a thing as a Question Hour here, so he appears where I am and answer that

question.

But we will have to ask him, prepare the

questions beforehand, he will answer this, answer that. So t.hat he does not say, I do not have the answers now, I will get it later. He" has to come and answer that in a Question Hour.

REP . SAWDO .

So, Your Honor-, your" basis for t.h.i s

statement, all the development of the companies of Villar

did not get any single permit, principal permit.

This is

based only on the three series Inquirer article?

REP. ARROYO. No, I gOt it, Mr. Speaker, -- I asked at the prOVincial level and the city level because there is a

MALIWAT-3

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Auguet 17, 1998

7:05p.m.

I forgot the name

there is a Provincial DAR Officer,

there is a City

REP. SALUDO. PARO.

REP. ARROYO. MARO, Municipal Agrarian Reform Officer.

There is a Provincial Agrarian Reform Officer and I have sent people to in<;!:ulre and they said no. Of course, they are ecared. But if Secretary Morales -w before he is

confirmed

he must answer this. This is serious.

REP. SALUDO. Your Honor, this is a big area \

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Cejes-3

Aug. 17, 1998

7:10 p.rn.

(PO-Deputy Speaker GuUas)

REP. SALUDO.... This is a big area -- the equivalent of Las Pinas and Makati, how far is this distributed - the subdivisions of the companies of Mr. Villar, the provinces and the cities or the towns involved? And if your honor has gone into the provincial, as well as to the local levels, could you probably enlighten this Representation what efforts went into this? How long it took your honor to get ... ?

REP. ARROYO. I did not say I went there. I sent some people and I am not a leg man for doing this.

REP. SALUDO. Okay, I am sorry, I did not get it right. But anyway,

whoever was sent ...

SUSPENSION OF SESSION

REP. ARROYO. But there is, just to give you an idea. Can I move for a recess, Mr. Speaker, so I can find my papers.

THE DEPUTY SPEAKER (Rep. Gullas) Session is suspended. ftwas7:11 p.m.

RESUMPTION OF OF SESSION At 7:11 p.m., the session was resumed.

THE DEPUTY SPEAKER (Rep .. Gullas). Session is resumed.

REP. ARROYO. Mr. Speaker, in answer to the question of the Gentleman from Southern Leyte, again, in the Camella and Palmera Homes prospectus are listed the areas as ·of 1995 where the properties are located. Let me read. I did

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Aug. 17, 1998

7:10 p.m.

not include this in my summary because well, I thought it was not important: Las

Pinas, Las Pinas; Bacoor, Cavils; Muntinlupa; San Pascual, Batangas; San

Pedro, Laguna; Tanza, Cavite; Dasmarinas, Cavite; lrnus, Cavits: Trece

Martirez, Cavite: San Jose del Monte; San Mateo, Rizal; Marikina, Rizal; San

Jose del Monte; Quezon City; Taytay, Rizal; Kalookan City; San Jose del Monte,

Bulacan; lapu-Lapu City; Talisay, Cebu; Cagayan de Oro City. Those are the

locations, but this is 1995. The list that we saw updated, there were many others,

added to this in fact will almost double.

REP. SALUDO. Do I understand, Your Honor, that the list that you have

there comprises subdivisions developed by the companies as of 1995 comprising

60 million square meters?

REP. ARROYO. No, no, the sixty million is as of now. REP. SALUDO. As of now, from 1995?

REP. ARROYO, No, no, the overall, from the beginning. They have

developed or are developing sixty million square meters.

REP. SALUDO. Your Honor, because 1 know that the companies of Mr.

Villar on low-cost housing have started long before 1995. So, if what you are

saying is 60 million square meters, could this include those developments

already made long before, let us say, ten years before 1995?

REP. ARROYO. Our information is that sixty miilion is from the start of

CARP. From the start of CARP; that would be roughly 1987.

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,l\ug, 17, 1998

7:10 p.m.

REP, SALUDO. So, your stance would still be that sixty million developed since 1987 or 1985 for that matter, does not have one single principal permit?

REP. ARROYO. That is what the PARO and MARO people say.

REP. SALUDO. The reason l.ask this, Mr. Speaker, and Your Honor, is because we have contrary documents to show that all governmental requirements were met in the development of these SUbdivisions,

REP. ARROYO. I did not know that the Gentleman from Southern Leyte was a stockholder of Camella and Palmera Homes. It seems that we have the documents to prove" ,

i\ugUol l7 1998

715 p.rn

PO - (DEP. SPEAKER GULLAS)

REF. ARROYO .... that "we have the documents to prove". I did not

know that.

REP. SALUDa. I came to know about this not because I am a stockholder,

Your Honor.

REP. ARROYO. If he would be willing to inform us how many percent he

owns, then we will be very glad to share it with him.

REP. SALUDa, Your Honor, we have basic principle on the secrecy of

lawyer-client relationship, as you very well know. No, but that is a joke.

Now, Mr.Speaker, your charges do not only comprise provisions on the

Constitution. Is that correct?

REP. ARROYO. 0, yes, statutory provisions related to the constitutional

provisions.

REP. SALUDO. Okay. You are referring, of course, to the Anti-Graft and

Corrupt Practices Act, or Republic Act No. 3019, and Republic Act No. 6713,

otherwise known as "Code of Conduct and Ethical Standards for Public Officials

and Employees", Now, do you agree with me, Mr. Speaker, that these Republic

/\cts- - these laws - - are in the nature of a criminal statute?

REP. ARROYO .. Well, yes, because there are penal provisions, Mr.

Speaker.

REP. SALUDO, That is correct Asa matter of fact, under Republic Act

No. 3019 or the Anti-Graft and Corrupt Practices Act, Section 9, provides for a

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August i 7, 1998

7.15 p.m.

penalty. So d0{~S Republic Act No. 6713, Code of Conduct and Ethical Standards

rOt, Public Officials and Employ<;les, Section 11, prescribe penalties,

Now,Mr. Spe<lker, we know for a fact that the House may have some

remedies but not on the criminal nature, as prescribed by these laws Which we are

using now as a basis to charge Speaker Villar of wrongdoing, Don't you think, Mr,

Speaker, that these charges should be properly ventilated before the proper

venue like the Ombudsman or the courts, as the case. may be, so that we can

have accmplete remedy of your charges?

REP. ARROYO. Mr. Speaker, as I have said earlier, I do not invoke or cite

any, or would just cite any penalty. These provisions I cited are simply standards, standards of the conduct we, as Members, should use as Members of Congress.

Now, a suggestion that we give this elsewhere is an abdication of our

independence and of cur power to police cur own ranks. With thls.ras somebody said, we are asking our neighbor to discipline our children. If we cannot discipline

our own we have ,no business disciplining others.

The point is, I am not after any criminal offense, If all I wanted was a criminal charge, thenl will file the criminal charpeor ask someene else to file the criminal charge and let the Speaker defend himself. But no.

I have mentioned' this because the House must reform itself. If, as I've said

again, we have been inviting public offlctalshere, we investigate them, we even

humiliate them, we bamboozle them, we even cite them for contempt, within our

powers, we detain them, If we cannot investigate our own Members, we have no moral ascendancy to investigat~ others. We cannot tell our neighbors' children j

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.vugust 17, 1998

7:15 p.m.

that th,jY are no good if we cannot tell our own children they, are no good, That's '311 there is to it. We must have it and conduct our own investigation. , . .Iedr

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T 3bligan - 4 August 17, 1998

(PO - Deputy Speaker Gullas)

7:20 PM

REP. ARROYO .... investigation, and this idea that if we investigate the

Speaker is the entire House. that is bismirched? No, sir. Speaker Gingrich, I

said was censured, but the United House of Representatives was not

humiliated, it was not tainted. In fact, it was congratulated.

Why the double standard to investigate others, we cannot investigate

ourselves? But out of this investigation will come, and perhaps in our own Rules of which we draft, will have our own Code of Conduct - the things that

we cannot do and the things we must do. We can't exempt ourselves from the

coverage of the Constitution while we tell the Executive officials you are

covered.

Now, I puta more specific example. Supposing a cabinet official committed the same things or he did not divest. If we could not investigate our

Speaker can we now ask a member of the cabinet and tell him why did you do

this, why don't you do that, can we? We must set the example and not

confuse the interest ofthe Speaker as the interest of the House. That is entirely

different. That is why this idea of bringing it to the Ombudsman and let it die

the sleep of death, you know, I mean it won't work.

REP. SALUDO. Anyway, are you through?

REP. ARROYO. And it is humiliating that we bring our Speaker to the

Ombudsman, we better have him tried here. In fact, this is not a trial, this is an

investigation because we don't know, it depends upon his answers. That is why we are groping is because he has not answered. If he answers, then ~

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Tabligan - 4 August 17,1998

(PO - Deputy Speaker Gullas)

7:20 PM

perhaps we can minimize, we can dissect this and distill it and perhaps

formulate a charge in such a way that is clear. That would be simpler.

REP. SALUDO. Are you through, Your Honor?

REP. ARROYO. Yes, sir.

REP. SALUDO. May [just make a last statement.

Well, that is a matter of opinion as to the venue of these charges, Your

Honor. But YOLI know there is a big difference in bringing this before the House

or bringing this to the real venue as mandated by the laws used to accuse the

Speaker. For one thing, the Speaker in a criminal court can refuse to answer

on the ground that, you know, it might incriminate him. Here he cannot use

that. If the Speaker says he will not answer, then he is dumb. If he will answer

he is dumb.

But anyway, Mr. Speaker, Your Honor, thank you so much for your time.

Thank you, Mr, Speaker. .

REP. ARROYO. You are most welcome. Mr. Speaker, it is the privilege

of every Member of the House not to answer any question that he doesn't feel

like. That is why if you will hear the Chair, the Chair always says "if the

Gentleman is willing to yield." If the person on the floor is not willing to yield

there is nothing in our Rules that compels anyone of us to answer. That's how

it is.

THE DEPUTY SPEAKER (Rep. Gullas). Thank you, distinguished

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Gentleman from the Lone District of Southern Leyte. ~

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Tabligan - 4 August 17, 1998

(PO - Deputy Speaker Gullas)

7:20 PM

The next interpellator here in the list is the Gentleman from the Lone

District of Cagayan de Oro City, the Honorable Jaraula.

REP. JARAULA. Thank you, Mr. Speaker.

REP. CAGAS. Mr. Speaker.

THE DEPUTY SPEAKER (Rep. Gullas). What is the pleasure of the

distinguished Gentleman from Davao del Sur?

REP. CAGAS. Parliamentary inquiry, Mr. Speaker.

THE DEPUTY SPEAKER (Rep. Gullas).

Please state your

parliamentary inquiry.

REP. CAGAS. Earlier, the Gentleman from Makati was willing to share

his time in case nominations to the different committees that have not yet filled

up will be ready, Your Honor. I would like to inquire if there are now

nominations for the unorganized committees that are ready for business, Your

Honor.

THE DEPUTY SPEAKER (Rep. Gullas). Right now, distinguished

Gentleman from Davao del Sur, there are no nominations at the moment. But the Chair .. ./ ~

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