My name is Bond . . . Diverted Bond


The issuance of a state-guaranteed bond supposedly is, in theory, a very straightforward affair. The proceeds go to a worthwhile purpose. In most sophisticated economies, such issuances are routine. There is nothing about bond issuances that generates controversies. Almost always, the agenda behind the issuance is to fund a lofty investment need.

In this sense, the Philippines is a very special—rather sorry—country. Bond issuances are often tainted and played around with by shenanigans and crooks. On the PEACe bonds, two things are certain. Number one: A substantial percentage of the proceeds got waylaid and fell into the hands of crooked NGOs operating under a mask of nobility.

The other certainty is that Dinky Soliman is clean on that issue. One familiar with bonds and derivatives and the inner workings of shadowy finance plotted the whole messy affair and that, for certain, is not Dinky Soliman’s area.

And one more thing: the fresh scrutiny on diverted proceeds of government bonds reminded farmers on how the state officially sanctions the torture of the farming sector. You might ask this question: How is torture of the peasant class and agriculture related to state-sponsored bonds? The answer is easy.

Right after former President Estrada assumed the presidency, anchored on his main agenda of boosting agricultural productivity, he ordered the issuance of so-called ERAP bonds.

The P5 billion proceeds, ordered Estrada, should go to agricultural productivity and farm modernization projects. The state-owned National Development Corp. or NDC, to cut a convoluted story short, was tasked to oversee the bond issuance and the execution of the productivity projects. Farmers still remember that they lauded the bond issuance—never mind that its long name was drawn from ERAP as an acronym.

For a long time, nothing was heard on where the proceeds went, or what noteworthy farm-related or agriculture-focused projects the proceeds bankrolled. The peasantry lacks the sophistication to check on what investments were lined up for financing by the P5-billion bond.

We found out later that the whole P5 billion was neither spent for farm-related projects, nor for countryside investments. The P5 billion was spent to build the connecting link of the MRT and the LRT in Northern Metro Manila.

No, no, the brief Erap administration had nothing to do with the diversion of the ERAP bond proceeds.
The decision was made by the Arroyo economic managers and the deed was done unilaterally, without consulting the farmers and without even a tersely worded apology.

Depriving the farmers of a fund that could have gone a long way in improving the level of the country’s agricultural research and development, or building a network of grain silos, or constructing an irrigation network of small water impounding projects was akin to rubbing salt on the open wound of the peasantry.

But if the government can officially sanction the diversion of the PEACe bond proceeds to NGO-cronies, it can also very well divert the ERAP bond proceeds into constructing spans of concrete not in any way related to improving farm productivity. To hell with the farmers.

The claim is true: A government of impunity operates without moral, legal and ethical standards. It does what it wants to do, damn the rule of law and basic decency. This rule was the operative principle in the case of the ERAP bonds. And the PEACe bonds shortly after.

Render unto the farmers what is the farmers. This has been purely lip service. At every turn, the national government keeps screwing the peasantry.

If we backtrack a bit, we would learn that the after the country’s accession into the World Trade Organization in December 1994, special funds were readied to enhance agricultural productivity.

The program rationale was this: The WTO accession exposed the lack of preparedness of the Filipino farmers to global agricultural trade and slashed agricultural tariffs. So something must be done, specifically investments to modernize the state of farming and Philippine agriculture, to ease the anguish of the peasantry.

You know where the government spent the money supposedly for agricultural modernization? The funds were diverted into the construction of metropolitan overpasses and urban water projects.

What was supposed to go into farm investments got waylaid and was instead used for showcase projects in Metro Manila.

If this was not official torture of the peasantry, I do not know what it was.

Only a government running on a culture of impunity, a government without regard for what is legal, and a government that is not sensitive to the urgent and pressing needs of marginal sectors such as the peasantry can do this. Again and again.

Bond proceeds, under this kind of governing culture, are not spared from scam artists and either can end up getting stolen or diverted.


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