Saving the bank that coconuts built

The Sandiganbayan First Division has come out last 11 July with a ruling that former Ambassador Eduardo Cojuangco Jr. and his nominees’ 72.7% government-sequestered stake (or 95,304 shares) at the United Coconut Planters Bank (UCPB) belongs to the Republic of the Philippines.

The anti-graft court’s partial summary judgment, which spawned stories of “massive withdrawals” in UCPB, was sought by the Presidential Commission on Good Government in 2002 and was based on the December 2001 Supreme Court decision on the public character of the coconut levy funds.

Notably, prior to the resolution of the 16-year old case, PDIC has just injected P20 billion to rehabilitate the ailing national government depository, some P8.5 billion of which is now used to service the deposit claims of its clients.

As of March 2003, the 40-year old bank ranks as the 12th largest commercial bank with an asset base of P97.24 billion. UCPB’s capital base, however, dropped to P2.85 billion in end-2002 from P5.78 billion in end-2001. The bank’s capital adequacy ratio falls below the prescribed 10%. Furthermore, the bank has to dispose its load of bad assets since it has one of the highest non-performing loan ratios among commercial banks.

An internal audit has led to a probe into possible behest loans by three companies involving P2.7 billion connected to San Miguel Corporation (SMC) President Ramon Ang. Others see politics involved in the timing of the Sandiganbayan decision and in the UCPB investigation into the alleged behest loans. The Sandiganbayan’s ruling on the purchase of Cocobank shares using the Coconut Consumer Stabilization Fund derived from the coconut levy, however, has yet to become final.

The coconut levy funds, currently valued at P150 billion, were used to purchase more than 72.2% of the shares of the First United Bank, the predecessor of UCPB, way back in 1975. Cojuangco claims direct ownership of 7.22% of UCPB while the remaining 64.97% of the shares were held by the Philippine Coconut Authority.

Under Siege

The whole country once more stood witness to another failed mutiny as soldiers in red armbands seized a Makati shopping and apartment complex demanding the resignation of the President and other government officials.

In the early morning of 27 July, close to 300 members of the country’s elite military services, including 70 junior officers who call themselves the Magdalo group, stormed and holed up in the Oakwood Premier, a first class serviced apartment in Makati City, and laid out bombs and explosives all around the adjoining Glorietta Commercial Center.

The spokesman for the Magdalo group, Lt. Antonio Trillanes IV, said they were not attempting to grab power but were just trying to express their grievances. He said they were espousing a program being pushed by Senator Gregorio Honasan - the National Recovery Program - to address the country’s problems, foremost of which is corruption in the Philippine military. The rebel soldiers also let out controversial allegations. They accused Defense Secretary Angelo Reyes of selling ammunition to insurgents and masterminding the bombing of key installations in Davao.

They also sounded off the President’s supposed plan of declaring Martial Law in August. By midday, as the rogue soldiers continued to stand their ground, the government declared the nation under a state of rebellion.

The 22-hour standoff, which was reminiscent of a coup attempt perpetrated by restive factions of the military in 1989, nonetheless, ended without a shot being fired and with the mutineers agreeing to be escorted back to their quarters peacefully.

Although the public and the private sector heaved a collective sigh of relief in the aftermath of the incident, some still feel jittery about uncertainties in the govern-ment’s hold on its defense establishment. The general sentiment is that even if the rebel’s complaints were valid, their method for ventilating their grievances was unwarranted and should be dealt with accordingly.

SONA: Filipinos Cannot Stay Divided

The morning after a weekend uprising by some 300 disgruntled military men shook the economy and Malacañang, President Gloria Macapagal Arroyo delivered her third State of the Nation Address (SONA) before the joint session of Congress.

The President began her speech by stressing the importance of understanding the underlying problem of the mutiny, albeit clarifying that it was a wrong way of airing valid issues. She reported that an independent commission was formed to investigate the provocation that inspired the supposed coup. Similarly, a Philippine National Police reform commission will be formed for a comprehensive PNP organizational change.

Meantime, the President believes the country will reap plenty of harvest in its war against terrorism, corruption, disease, and drugs - admitting, though, that many reforms have yet to bear fruit. “Our nation still has institutions that are fragile, thus a leader cannot run a developing country like a corporation.”

What then can we expect in the next ten months of the Arroyo administration? The President wants intensified campaigns versus drugs in schools and communities and would even allow death penalty for drug convicts. She wants to reduce business costs by providing infrastructure: roads, transport, and a rationalized power sector—noting that the country needs 6,000 megawatts more of power over the next ten years. By year-end, she expects the completion of the Light Railway System loop of Metro Manila.

The President also would like to reduce corruption not only among appointive officials but also among elective officials. She remains pro-life (i.e., population issue) and warned of vetoing any legislative proposal to “smuggle in abortion.”

She likewise urged Congress to enact bills on Anti-Terrorism, Farmland Loan Collateral, Indexation of Sin Taxes, TRANSCO, Excise Tax Rationalization and National Revenue Authority. She also asked legislators to institute reforms in campaign finance to level the playing field and widen the choice for worthy candidates. She urged Congress to allot money for human rights victims and coconut farmers from the coco levy fund. She also asked the Budget Depxartment to allot P100 million for the implementation of the Anti-Money Laundering Law.