February 6, 2002, AFP, Arroyo defends embattled Philippine finance chief,

February 6, 2002, AFP, Arroyo defends embattled Philippine finance chief, 

MANILA, Feb 6 (AFP) -

Philippine President Gloria Arroyo on Wednesday defended her finance chief who has come under pressure to quit after being rocked by an alleged scandal involving the sale of government bonds.

"He is staying," Arroyo told reporters when asked about the fate of Finance Secretary Jose Isidro Camacho, who is alleged to have taken part in a pre-bidding ahead of an auction of multi-million-dollar zero-coupon bonds.

A group led by Camacho's sister grabbed the bond deal.

Arroyo said she would not want to prejudge an ongoing Senate probe into the deal which, the opposition charged, smacked of crony capitalism.

"Let's wait ... there is an investigation going on. Personally, I find that it's in order," Arroyo said.

The government awarded 10 billion pesos (196 million dollars) worth of 10-year zero-coupon bonds in a public auction to local bank Rizal Commercial Banking Corp. (RCBC), which submitted the lowest bid rate for them.

The bank had bid on behalf of Caucus of Development NGO Network (Code-NGO), which in turn resold the bonds to the bank for an alleged windfall profit.

Under the scheme, the government will redeem or buy back the bonds in 10 years to the tune of 35 billion pesos.

Crispin Remulla, spokesman for the opposition Partido ng Masang Pilipino (PMP), charged that incident "has all the trademarks of a crony deal," considering that Camacho's sister, Socorro Reyes, the Code-NGO chairperson, had lobbied for the highly lucrative deal.

Senator John Osmena, chairman of the senate finance committee, said a letter addressed to the central bank governor and signed by two Code-NGO officials belied Camacho's claims that he had no participation in the alleged anamalous sale of bonds.

"This letter is the smoking gun," he said.

Osmena said the senate committee would prepare interim reports for the public during the investigations and could also request the government Ombudsman to make a more thorough probe on the issue.