It is said that always time to pay debts that become due, even those which should not have ever been borrowed. The PEACE bonds have become due, all P35 billion of them, after the government borrowed P10 billion ten years ago. There were many unanswered questions when the bonds were floated, not in the air, but towards RCBC – as claimed from competing banks then. It did not help that perceived serious conflict of interest stained the transaction, but a new president who was the main beneficiary of Erap Estrada’s ouster was hard to stop.
If questions were not answered satisfactorily then, they definitely are not answered today. In fact, one more controversy has erupted because the government, through the Bureau of Internal Revenue (BIR), is trying to collect taxes on the profits of banks who participated in the PEACE Bonds. In many societies, taxes are sacred. No one escapes them. But in the Philippines, the sense of entitlement of those who hold lofty positions or great wealth is hard to dismantle. This sense of entitlement has been aptly called “utak wang-wang,” and is obviously not limited to politicians. Banks and those who own or control them have the proverbial “wang-wangs,” too, literally and otherwise – including security personnel with officially-issued firepower of different calibers.
So, now, we have two parties with a strong sense of entitlement clashing. Government versus Banks. To tax or not to tax, this is the question.
According to the banks, government had assured them that their profits would be tax-free. The Supreme Court, not knowing the key agreements of a financial transaction, has issued a temporary restraining order on the government’s attempt to tax the profits of the banks. It means the government must pay the P35 billion that is due. At the same time, the Supreme Court says that the equivalent of government’s tax claims must be set aside by the banks just in case the government’s case is favorably decided upon. We have a virtual impasse which must be very irritating to the banks. I believe that their irritation is well worth it to the Filipino people because the issue of the PEACE bonds may find public attention and this attention may result in finally answering what has been avoided for so long.
What were the PEACE bonds for in the first place? Why did Gloria Arroyo approve them with all their conditionalities? Who were the official personalities involved and their relationship to earning fees and commissions on a government-initiated transaction? An NGO was involved, and benefited. Why? What entitled the NGO to such a sweetheart arrangement? What had it done or achieved to be blessed with an official favor without benefit of a public hearing for its purpose and qualifications? What actually happened to the PEACE bonds? How as the P10 billion divided if not all of the P10 billion went to government coffers? What did the government do with its share of the P10 billion as far as peace was concerned? What did others do with their share of the P10 billion and how did these benefit the cause of peace?
The question of government taxing profits is usually not a question but a fact of life. Why is it questionable now? Why was an assurance of tax-free profits given then as claimed by the banks? What concessions did they grant government then that could possibly justify their profits to be tax-free? Were their interest rates well below market then? Were they simple pressured to grant a loan that they did not want to give in the first place? Can the public now be given full disclosure about the rationale and configuration of the PEACE bonds?
It is not as though questions have not been asked before. They were simply not answered, or not answered fully – therefore not answered truthfully. Just as much as a suicide has triggered investigations about how government banks seemed to have casually lent money, even just hours after a request is processed and approved, to a former Cabinet officer of the Marcos dictatorship, the BIR move to tax the profits of banks involved in the PEACE bonds may force the whole truth to be known by the public.
Furthermore, two apparently non-related issues ought to push a transparent investigation of the PEACE Bonds. It would be good to know if the PEACE Bonds were titled so because their use would be to promote peace or just a convenient term to deodorize what the funds would really be for. The death of 19 government soldiers after a clash with the MILF leaves a bitter taste in the mouth in the cause of peace. The PEACE bonds are unrelated to this massacre – or shouldn’t they be by the mere use of the word PEACE?
The other issue is the claim made that government money, or government officials involved in the peace process, were used to cheat in the 2004 presidential elections. Wow, irony of ironies, Gloria officials then who may have been intimately related to the PEACE bonds or the NGO blessed by Gloria may finally be forced to share their stories to have closure – especially if they are also serving in the P-Noy administration.
The cause of peace did not prosper in the life of the PEACE bonds. The truth about them, if it can be ferreted out, may be a building block to a more sincere and effective pursuit of that elusive peace. It was always the people’s money, not Gloria’s, not her officials or favored friends, not even the banks if they get paid the principal and interest. The people’s money in the hands of those in lofty positions and great wealth. If the people cannot decide for themselves on how to use the money, they can be told at least the truth about how that money was divided, how it was used, and how the cause of peace was served.
To the BIR, the banks and the Supreme Court, thank you for paving the way for truth, and maybe, after all, for peace through the PEACE bonds.