Transfer of Behest Loans Duties to PCGG

The behest loans fact-finding mandate was originally created by Administrative Order No. 13 dated October 8, 1992.
Memorandum Order No. 61 dated 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 dated February 15, 2000 expanded the committee’s authority to file and prosecute legal actions for recovery of deficiency claims arising out of behsest and non-behest loans that have been defaulted.
Memorandum Order No. 91 further required PCGG to render full assistance and support to the committee in filing and prosecuting behest loans cases.
Executive Order No. 72 dated February 11, 2002 rationalized the agencies under or attached to the Office of the President and resulted in the committee’s abolition.

The Executive Order mandates that the duties and responsibilities of the defunct behest loans committee must be performed by PCGG, as the agency best suited to file and prosecute behest loans cases.
The Executive Order frames the transfer as necessary to serve the national interest in continuing the government’s actions for recovery and accountability involving behest and non-behest loans.

Section 1 directs that the PCGG, in addition to its existing powers and duties under law and executive issuances, shall perform the following functions:
- 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 the grant.
- Identify the borrowers granted “friendly waivers”, identify the government officials who granted those waivers, and determine the validity of these waivers.
- Determine the course of action that the government should take to recover the loans and recommend appropriate actions to the Office of the President (OP).
- Investigate, inventory, and study all non-performing loans, embracing both behest and non-behest loans.
- File and prosecute the corresponding legal action for recovery of deficiency claims arising out of behsest and non-behest loans that have been defaulted.
Section 1 preserves the criteria in determining a behest loan enumerated under Section 1 of Memorandum Order No. 61, series of 1992, as valid for continuing application.

Section 2 grants PCGG the legal personality to continue the prosecution of all pending legal actions pertaining to behest loans filed by the defunct Presidential Ad Hoc Fact-Finding Committee on Behest Loans.
Section 2 further authorizes PCGG to file and prosecute any future legal action concerning the same matters.

Section 3 empowers PCGG to call upon any department, bureau, office, agency, instrumentality, or corporation of the government, and any officer or employee, for the assistance that PCGG needs to discharge its functions.

The Executive Order recognizes that the Legal Department of PCGG rendered full assistance and support for filing and prosecution of behest loans cases since 1995, for which purpose an amount of TEN MILLION PESOS (P10,000,000.00) was appropriated from the budget of the Office of the President (OP).