On Wednesday, February 17, according to bank officials, the Lopez-owned companies and its former subsidiary Maynilad Water Services–do not have existing debts with the state-owned Development Bank of the Philippines (DBP).
Earlier, President Rodrigo Duterte said that he will not allow the now franchise-less Kapamilya network to resume broadcasting operations until the corporation settles its obligations to the government.
He vowed to investigate the alleged condonation of Lopez Group’s debt to the DBP, which happened nearly two decades ago. It’s his latest harangue on ABS-CBN.
The House Committee on Good Governance and Public Accountability recently held a hearing to probe whether the Lopez Group of companies unjustly benefited from DBP’s condoned loans worth 1.6 billion in 2006. But a DBP official refuted claims during Wednesday’s House hearing that there was any write-off or condonation of DBP loans from Lopez-controlled firms.
Lopez Holdings and Maynilad officials also reported that their businesses had already settled their obligations with the financial institutions that acquire non-performing loans from DBP under the Special Purpose Vehicle Act (SPV).
In the aftermath of the Asian Financial Crisis, the SPV law encourages financial institutions to dispose of bad loans and non-performing assets so that they could resume lending at pre-crisis levels to businesses and consumers.
President Duterte also signed a similar law called the Financial Institutions Strategic Transfer Act (FIST) to help lenders dispose of non-performing loans accrued due to the Covid-19 crisis.
During the House hearing, Duterte’s allied legislators claimed that the Lopez companies had their DBP debts written off, yet the bank denied this.
Anak Kalusugan Representative Mike Defensor asked DBP chief legal counsel, Soraya Adiong, ‘Sinasabi niya walang write off, walang condonation (He said there was no write off, no condonation?’ citing DBP president Emmanuel Herbosa’s statement during an earlier hearing.
“There was none, Sir,” Adiong answered.
DBP said that the non-performing assets and loans or so-called bad loans of the Lopez Group were sold to another financial institution, Lehman Brothers.
ABS-CBN Corp’s affiliate, SKY Cable said they already paid their loans in full.
“The loans were paid by SKY Cable in full. Yes, it’s been paid, in 2011, January 2011,” said Antonio Ventosa, SKY Cable President.
Since then, Maynilad, which was taken over by the Metro Pacific Company, has paid off all its debts as well.
“Bayad na ho lahat. In total ho, parang total $241 million ang binayaran namin… doon ho sa mga creditors na kasama sa rehab package,” said CEO Randolph Estrellado.
Salvador Tirona, president of Lopez Holdings, also denied the assertions of Presidential Spokesperson Harry Roque. According to Roque, the company re-acquired some non-performing properties.
Since loans got sold to an SPV (Special Purpose Vehicle), Roque’s argument may be a ‘misunderstanding’, Tirona pointed.
“After that, we negotiated with the SPV together with the other creditors of our different companies and settled our loans with the SPV and the other banks. There was really no repurchase by the Lopezes of what they termed as the assets. It’s a settlement of the loans with the new holder of the loans that came from DBP.”
Recently, the Palace spokesperson presented a matrix of alleged Lopez’s unpaid DBP loans. The transactions between DBP, the Lopez Group’s bad loans, and the Lehman Brothers under SPV were shown in Roque’s ‘unverified’ matrix. He also added that the matter had already been referred to the Ombudsman for further investigation.
Presidential Legal Counsel Atty. Salvador Panelo gave unsolicited advice to the Kapamilya network executives during his Counterpoint program on Tuesday, February 9, to pay the requisite taxes they need to settle if they want to go back on air soon.
As the largest media company in the country, Panelo said ABS-CBN has the means to pay its tax dues.
There is nothing unusual concerning the non-performing loans and non-performing assets by the Lopez Group of companies, DBP claimed.