A letter to the editor

Managing Editor

Dear Ms. Bueno,
This is in reference to the Letter to the Editor signed by Atty. Joseph Entero in his capacity as legal counsel for the DAREFI. We don’t know if his comments and observations are entirely his own culled from his past experience as erstwhile legal counsel of the DAR Employees’ Association (DAREA) or whether it stems from his close affiliation, legal or filial, with Violeta M. Bonilla, the Chairman and President of what we are accusing as a pseudo Foundation operating a lending business at the DAR, the DAREFI.

We don’t know either if legal ethics is being observed if you are representing a client against a former client. Anyway it is an issue that is for the Integrated Bar of the Philippines or the Supreme Court to resolve once we file a case against this two-timing lawyer.  But for us poor laymen sans the legalese it is plain and simple conflict of interest.

To start off with our reply to Atty. Joseph Entero’s letter to the editor let us first come up with a definition of terms for words that will crop up prominently in the course of the discussion:

LBP – (Land Bank of the Philippines) – a government financial institution which was initially a financial arm of agrarian reform.  It now prides itself as striking a balance in fulfilling its social mandate of promoting countryside development while remaining financially viable. It has ex-panded its loan portfolio in favor of priority sectors like farmers and fisher-folk, micro, small and medium enterprises, livelihood loans, agribusiness, etc. THERE IS NO MENTION OF FOUNDATIONS!

DAREFI – (DAR Employees’ Foundation, Incorporated) – Originally it is the DAREA Foundation which was registered with the SEC as non-stock, non-profit using the members’ money and functions as the benefit arm of the DAREA, and exclusively

focusing on the welfare of DAR em-ployees nationwide. In 2005, Violeta Bonilla misappropriated it as her own changing it to DAREFI and accommodated private individuals and  government  employees  outside DAR in various businesses like health care, pension plans and lending activities.

DAREA – (DAR Employees Association) – the solely recognized go-vernment employees union at DAR duly accredited by the CSC and ac-knowledged by other unions, agencies and instrumentalities of the Govern-ment nationwide. It is exclusively working for the welfare of more than 12,000 members nationwide.

FOUNDATION – usually a charitable foundation, it is a legal categorization of non-profit organizations that will typically either donate funds and support to other organizations, or provide the source of funding for its own charitable purposes.

REDISCOUNTING – a privilege of a qualified bank to obtain loans or advance from the BSP using the eligible papers of its borrowers as collateral.  It is a standing credit facility provided by the BSP to help banks liquefy their position by refinancing the loans they extend to their clients.

SCAM – (noun) a fraudulent business scheme, a swindle, a stratagem for gain. (verb) To deprive somebody of something by deceit.

Now let us go to the comments and observations of Atty. Joseph En-tero, erstwhile legal counsel of DAREA and the DAREA Foundation and the current legal counsel for the DAREFI and Violeta Bonilla:

1) Atty. Joseph Entero suffers from a case of selective memory. For a lawyer who once  was the lead counsel for DAREA, he conveniently for-gets that DAREFI is not the DAREA Foundation.  It was the DAREA Foun-dation that was registered as a non-stock, non-profit corporation with the SEC with Certificate of Registration No. CN 199814554 in 1998 intended as the exclusive benefit arm of DAREA with money for the registration coming from union coffers. Ms. Antonia Pascual was then Corporate Secretary of the DAREA Foundation and not the DAREFI.  She became National President of DAREA in 2005 while Violeta Bonilla who was the former DAREA President went on to appropriate the then DAREA Foundation, renaming it the DAREFI, and subsequently introducing amendments to its Articles of Incorporation to include business operations not only at DAR but to private individuals and other government agencies
as well.

Now Atty. Joseph Entero can go back to our definition of terms if DAREFI can qualify as a Foundation, never mind the ambit of its corporate powers and authorities that lawyers are adept in obfuscating.  We hope that REMATE will not cringe at his demand

for rectification for the sake of truth and justice as there is absolutely nothing to rectify.

2) Atty. Joseph Entero started with his second comment with, “the loans being contracted by the DAREFI with the LBP are legal and all above board. The DAREFI as a corporate entity has the power and authority to contract loans with the LBP or any financial institution for that matter.”  He also added in the next paragraph that, “no employee of the DAR has ever contracted for a loan with the LBP.  Rather, it is the DAREFI who borrowed money from the LBP that the privity (sic) of contract lies only and solely between them.  Is never a scam, it is legal, valid and above-board.”

Either Atty. Joseph Entero is lying through his teeth or he continues to be mesmerized by Violeta Bonilla. Earning a living as a lawyer is indeed difficult.  We have no quarrel with DAREFI contracting loans with the LBP but we are on the warpath because DAREFI used the names of our members without their knowledge much less consent to obtain the loans from the LBP.  Since 2008, the DAREFI by presumably fabricating loan applications and promissory notes of at least 148 DAREA members nationwide managed to secure loans allegedly for re-lending purposes from the LBP to the tune of 6-7 million pesos until the scam was discovered early this year.

Tongue-in-cheek, Atty Joseph Entero has the temerity to pronounce that it is never a scam but legal and above-board and it is solely between LBP and DAREFI?  Why then did

the LBP NCR Lending Center issue a Request for Post Release Validation report from LBP Regional Lending Centers to verify whether our members, listed as sub-borrowers, indeed contracted or received the proceeds of the loan if indeed they are not parties

to the contract?  Who will LBP ran after in case DAREFI defaults?  You don’t need to be a lawyer to answer the question.  Is it truthful and just to use the names of unknowing victims to secure a loan supposedly exclusive between LBP and DAREFI? Atty.

Joseph Entero, is everything that is legal moral and just?

In the succeeding paragraph, again Atty. Joseph Entero has the audacity to advise REMATE about the contract stipulations between DAREFI and LBP which includes the assignment to the LBP of receivables due to DAREFI on a rediscounting assignment.
So how does the rediscounting cycle go?  The manual says; a bank extends loans to end-user borrowers who execute credit instruments (promissory notes, drafts or bills of exchange) in favor of the bank.  The bank then rediscounts the credit instruments of its end-user borrowers with the BSP by endorsing the same in favor of the BSP.

Under the BSP guidelines the papers that are eligible for rediscounting are: commercial credits (import exports), production credits (related to production and

processing of agricultural, animal, mineral, etc.) and other credits (microfinance, housing loans, services).

Assignments of receivables which he said are loans contracted by DAR employees?  Are these the receivables included in the statement of financial condition of DAREFI submitted to the SEC stating 98 million pesos in 2011 down a measly 7 million from

the receivables of 105 million pesos  it declared in 2009?  Under the rediscounting manual what are loans considered ineligible for rediscounting?  These are inter-bank loans, past due loans, unsecured loans (except in cases identified), personal consumption loans, loans to non-bank financial institutions.  Unsecured loans may be

accepted for rediscounting provided they are: microfinance loans or loans secured by duly registered mortgage on real property of the bank.  So what is he talking rediscounting on receivables about?

The only credit facility that DAREFI could possibly use is the microfinance window since the reason they offered to the LBP is for DAREFI to use the loan for re-lending

to its supposed members.  The microfinance facility that is actually small loans granted to the poor and low-income households for their micro enterprises and small businesses.

Without the legal gobbledygook that only a lawyer like Joseph Entero can supply, the scam is relatively simple:  DAREFI, negotiated for a loan with the LBP purportedly for re-lending to its members.  Required that they should submit a list of members, they gave not only a list of their subscribers, but DAREA members without any prior business with them at all. The LBP releases the 6-7 million pesos, then DAREFI diverts the proceeds to their floundering business activities.  After 3 years, experiencing delays in payments, LBP proceeds to validate the releases by calling the unsuspecting victims and the scam gets discovered!

We will now deal with the later part of Atty. Joseph Entero’s observations.  He proceeded into a fallacy which he thought we mere mortals are not familiar.  It is called Argumentum ad Hominem or personal attacks on Antonia Pascual and Gloria Almazan mentioning loans under writ of execution by the RTC Sheriff of Quezon City.

Of course he did not mention that the original loans amounting to 30 thousand as in the case of Pascual by their computation is now one hundred and twelve thousand pesos.

Almazan with fifty five thousand is now being charged one hundred sixty six thousand pesos.  These computations were drastically cut by order of Court as with the cases of other DAR employees who complained about onerous charges levied by this real Foundation as claimed by Atty Joseph Entero.  This Foundation according to Atty. Joseph is genuine but instead of being charitable they are charging the poor borrowers at the DAR with exorbitant charges amounting to 18 percent interest, 60 percent surcharge with 20 percent legal fees, an anomaly that forced the borrowers to seek redress from the courts to stop this “legitimate” Foundation from sucking them dry and destitute.

What makes the situation utterly disgusting is that this “authentic” Foundation without any secondary license from the SEC (this was confirmed by the SEC in a certification issued to DAREA) had issued securities in the form of pension plans to subscribers and is now remiss in the payment of plans that matured 2 years ago.

This prompted subscribers to file cases of syndicated estafa before the DOJ.  DAREFI belatedly paid some subscribers but without added interest for the delay in payment which they have the habit of imposing if they are the lending party.  They refuse to pay Pascual and Almazan and other subscribers contending that they have outstanding obligations and would prefer an offsetting option.  This we will ask Atty. Joseph Entero: 1) is it legal to merge a transaction, the pension plan with an entirely different undertaking like loans? and 2) is it moral for DAREFI to charge atrocious interest rates for their loans while paying zero interest for matured plans that they have been remiss in paying for the last 2 years?  is it just to withhold payments from pension plan subscribers merely on the basis that they are guarantors to loans not of their own doing?  And lastly Atty. Joseph Entero, where did DAREFI, as you say a legitimate, duly registered corporation operating within the bounds of law, get the authority to go into virtually loan-sharking activities, into selling securities and into securing loans from government financial institutions like the LBP through obviously fraudulent means?

Atty. Joseph Entero, as a former DAREA and DAREA Foundation lawyer charging legal fees from both entities, is fully aware that Pascual is not craving for DAREFI’s top position.  The DAREA members nationwide through their chapter presidents are demanding for answers why the DAREA Foundation that is supposed to be the benefit arm of their Association has become the DAREFI, a tool for persecution through usury.

Now it is being used to obtain loans from government financial institutions using the very same members that were robbed of an entity that should benefit them, not fool them.

In the latter part, Atty Joseph Entero seems to concede that apparently Pascual has succeeded in discrediting, maligning and perhaps destroying the DAREFI, and Violeta Bonilla, in particular, by conveniently using REMATE.  He is mistaken.

DAREFI will be destroyed by its own hands.  It will be destroyed since its foundation is built on lies, subterfuge and now scams.

We will not require REMATE to publish this rejoinder.  What we only want to establish and confirm is that you did not commit a mistake by trusting us with our expose’.

We salute you for your steadfast resolve to expose scams that victimize poor government employees.  We will all be vindicated because we are now in the process of formalizing charges through our victimized members.  The National Bureau of Investigation is now poised to facilitate the issuance of subpoena duces tecum to the

LBP and the DAREFI to recover the MOA, the promissory notes and other documents that were used to defraud not only our members but the public.

We will not be cowed by lawyers who can’t draw the line between what is legal and what is moral.  What is ethical and what is sleaze.  We will not be cowed by pseudo Foundations and their Trustees who cannot understand what service is all about and

that being charitable is not being greedy.  In the name of the hapless victims of this scam and the 12,000 members who are closely monitoring the developments of this case, we thank you from the bottom of our hearts.


For the DAR Employees Association:


National President

National PRO


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