SEA Games

Hontiveros asks DBP for paper trail of P9.5-billion loan for SEA Games facilities

JC Gotinga

STADIUM. The stadium at New Clark City in Tarlac, used in the 2019 SEA Games hosted by the Philippines

Rappler file photo

Senator Risa Hontiveros prepares to probe the P9.5-billion joint venture that built facilities for the 2019 SEA Games, saying Filipino taxpayers were 'fried in their own grease' with the transaction

Senator Risa Hontiveros is asking the Development Bank of the Philippines (DBP) for the documents of a P9.5-billion loan taken by a Malaysian firm to build the sports facilities used during the 2019 Southeast Asian Games.

The opposition senator asked for the documents as she pushed for a Senate probe into the alleged anomalous joint venture between the Bases Conversion and Development Authority (BCDA) and Malaysia’s MTD Capital Berhad, which built the facilities in New Clark City, Tarlac.

In a letter dated December 1, Tuesday, Hontiveros asked the DBP for the following documents:

  • loan or credit agreement
  • signing authority
  • minutes of the meeting
  • relevant presentations
  • management memorandum of the loan to MTD Capital Berhad
  • Counsel’s opinion or legal sufficiency certification from DBP’s legal counsel

In a web conference with reporters on Wednesday, December 2, Hontiveros said she wants to find out who facilitated the loan, how it seemed to breeze through the usually lengthy process, and whether it fulfilled all legal requirements.

Based on information on hand, Hontiveros said the Filipino public was “ginisa sa sariling mantika” or “fried in its own grease” when the BCDA used P9.5 billion in public funds to pay MTD for the loan it took from the DBP. This amount is higher than the P8.5 billion original contract price approved by the government.

The Supreme Court has ruled out modifying government contracts after they are awarded, Hontiveros pointed out. Instead, following a Swiss challenge on the P8.5-billion contract for the SEA Games project, the price went up by P2.4 billion.

Under the joint venture agreement, the BCDA was to reimburse MTD some P11.1 billion in increments of P2.2 billion over 5 years, and with a provision for 25 years’ profit sharing thrown in, Hontiveros said.

What then, Hontiveros asked, was the point in entering into a joint venture with a private, foreign contractor if the money for the project came from a Philippine government-owned bank anyway?

In the first place, when MTD sent a proposal in August 2017, it only planned to build an administrative center. Instead, the BCDA told MTD to submit a new proposal to include sports facilities.

In January 2018, the Office of the Government Corporate Counsel (OGCC) under then-chief Rudolf Jurado withheld approval of the joint venture. He said the law required it to go through a public bidding, and only then can the proposal receive his go signal – a counsel’s opinion.

Without the counsel’s opinion, the venture could not proceed.

According to Hontiveros, the contract was then revised to exclude the need for a counsel’s opinion, even if the rules of the Commission on Audit (COA) and of the BCDA itself requires it of joint ventures.

The DBP loan itself took only around 3 weeks to process, which was uncharacteristic of the government, Hontiveros pointed noted. The construction then began even without a Counsel’s Opinion to back the joint venture.

In May 2018, Jurado was replaced by Elpidio Vega as OGCC chief. When Vega’s appointment was confirmed the following October, he immediately released an opinion saying the joint venture was fair and above-board. Hontiveros found this suspicious.

The next month, November, the BCDA received P9.5 billion in its budget for the SEA Games facilities. It then paid the amount to MTD.

“Muli, ang usaping ito ay hindi tungkol sa ating mga atleta. Hindi maaapektuhan ng anumang imbestigasyon ang karangalan na ibinigay nila sa Pilipinas. Ang usaping ito ay hindi rin tungkol sa pagiging world class ng sports center sa Clark – maganda naman talaga ang facilities,” Hontiveros said.

(Again, this issue is not about our athletes. No investigation can affect the honor they have given the Philippines. This issue is also not about whether the sports center at Clark is world class – the facilities really are superb.) 

“Sa huli, ito ay tungkol sa accountability. Ito ay tungkol sa pagbabalewala at mistulang pag-araro ng public bidding requirements na napapaloob sa batas natin,” she added.

(In the end, this is about accountability. This is about the disregard and apparent trampling of public bidding requirements enshrined in our law.)

When Hontiveros first raised this issue in a privilege speech on November 10, she faced strong opposition from Senator Pia Cayetano. Questioning the SEA Games facilities and the people behind it were a “slap in the face” of Filipino athletes, Cayetano said.

Cayetano’s brother, Taguig-Pateros Representative Alan Peter Cayetano, headed the Philippine SEA Games Organizing Committee.

Hontiveros was not the first to raise questions about how the government funded the country’s hosting of the 2019 SEA Games. Her findings, she pointed out, drew from reports of the OGCC and the COA.

BCDA president and CEO Vince Dizon, OGCC chief Vega, and MTD Capital Berhad director Isaac David now face graft and malversation complaints over the issue.

Read Rappler’s 3-part investigation on this project:

Hontiveros is hoping the legislative investigation she proposed will begin before the end of the year. She noted that Senator Richard Gordon, who leads the Senate blue ribbon committee in charge of probing government corruption, said he is keen on probing the issue.

The documents requested from the DBP would add to the list of evidence and resource persons already prepared for when the probe begins, Hontiveros said. – Rappler.com

JC Gotinga

JC Gotinga often reports about the West Philippine Sea, the communist insurgency, and terrorism as he covers national defense and security for Rappler. He enjoys telling stories about his hometown, Pasig City. JC has worked with Al Jazeera, CNN Philippines, News5, and CBN Asia.