Transfer of Behest Loans Powers to PCGG

The order is issued by the President of the Philippines pursuant to the President’s powers vested by law.
Executive Order No. 432 transfers duties previously assigned to a defunct presidential committee to the Presidential Commission on Good Government (PCGG).
Section 4 makes immediate effectuation the operative effect rule for the order.

Executive Order No. 432 directs that the duties and responsibilities formerly performed by the defunct committee must be performed by the PCGG.
The order declares that PCGG is the agency most suited to perform tasks related to filing and prosecuting behest loans cases.
The transfer is implemented to ensure continuity of government actions concerning behest loans and related non-performing loans.

Section 1 mandates that the PCGG, in addition to its existing powers, functions, and duties under existing laws and executive issuances, must perform the enumerated behest-loans tasks.
Section 1(a) requires PCGG to inventory all behest loans and identify the lenders and borrowers, including the principal officers and stockholders of the borrowing firms, and the persons responsible for granting the loans or who influenced their grant.
Section 1(b) requires PCGG to identify borrowers granted “friendly waivers,” identify the government officials who granted these waivers, and determine the validity of these waivers.
Section 1(c) requires PCGG to determine the course of action to recover the loans and to recommend appropriate actions to the Office of the President (OP).
Section 1(d) requires PCGG to investigate, inventory, and study all non-performing loans, covering both behest and non-behest loans.
Section 1(e) requires PCGG to file and prosecute legal actions for the recovery of deficiency claims arising from behest and non-behest loans that have been defaulted.

Section 1 states that the criteria used to determine a behest loan as enumerated under Section [ ] of Memorandum Order No. 61, series of 1992 remain valid.
The validity of these criteria is preserved as a continuing rule governing PCGG’s determination of what constitutes a behest loan.

Section 2 grants the PCGG the legal personality to continue the prosecution of all pending legal actions pertaining to behest loans filed by the now defunct Presidential Ad Hoc Fact-Finding Committee on Behest Loans.
Section 2 further requires that PCGG file and prosecute any future legal action concerning the same subject matter.
Section 2 makes PCGG the continuing prosecutorial authority for both pending and future behest loans cases.

Section 3 empowers PCGG to call upon any department, bureau, office, agency, instrumentality, or corporation of the government, and any officer or employee thereof, for assistance needed to discharge PCGG functions.
Section 3 establishes that government offices and personnel must respond with the assistance requested by PCGG for purposes of carrying out PCGG’s functions.

Section 4 states that Executive Order No. 432 takes effect immediately upon issuance.

The defunct presidential committee was created by Administrative Order No. 13 (October 8, 1992) with tasks covering inventorying behest loans, identifying lenders and borrowers, identifying “friendly waivers” and the officials granting them, determining waiver validity, and recommending government actions for recovery.
Memorandum Order No. 61 (November 9, 1992) broadened the committee’s scope to include all non-performing loans embracing both behest and non-behest loans.
Memorandum Order No. 91 (February 15, 2000) expanded the committee’s authority to file and prosecute legal actions for the recovery of deficiency claims arising out of defaulted behest and non-behest loans.
Memorandum Order No. 91 (series of 2000), Section 2 required PCGG to render full assistance and support to the committee in filing and prosecuting behest-loans cases.
Executive Order No. 72 (February 11, 2002) rationalized agencies under or attached to the Office of the President and rendered the committee abolished.