Friday, December 7, 2012


IN THE NEWS from Interaksyon

I remember first encountering the word in college when I was doing research for my paper about the Marcos dictatorship, and even then it was used in the same phrase/context: "behest loans." Around three decades after the word was first used in that sense (presumably), a return to democracy, two (three?) "revolutions," and five presidents later, we hear it again.

What is a behest loan anyway?

Do a Google (web, not news) search, and you'll see that all the relevant results come from the Philippines (I stopped clicking next at Page 5). To me, this is evidence enough that the term, if not the concept, is genuinely and exclusively Filipino.

I'm not familiar with the history and official etymology of the phrase, so all I can offer is a layman's understanding based purely on context:

A loan granted to an undeserving borrower, upon the endorsement (i.e., behest = order or command) of a person (or persons) in power and/or of high authority.

Technically, a loan is considered a behest loan if it satisfies any two of the following criteria:
  • loan is undercollateralized
  • borrower is undercapitalized
  • direct/indirect endorsement by high government officials
  • cronies own or control the borrowers
  • loan was used to other purposes
  • use of corporate layering
  • funded project is not feasible
  • extraordinary speed in loan release
According to Ombudsman Conchita Carpio Morales, the 660 million peso loan that the Development Bank of the Philippines (DBP) has extended to former Marcos Trade Minister Roberto Ongpin in 2009 has met "some" of these criteria, and is thus behest. As a consequence, the Ombudsman imposed harsh civil-administrative penalties on several high ranking executives of the bank. Good job, Ms. Ombudsman, keep it up.

The next step, of course, should be to pursue criminal cases against those who have broken the law.

And behest loan? The more important question is: at the behest of whom?

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