Three sides to BF story, and none may be the truth
Credit to Author: BEN KRITZ, TMT| Date: Wed, 28 Aug 2019 17:32:55 +0000
Last of three parts
ONE of the most noticeable characteristics of the drawn-out saga of Banco Filipino (BF) is that from the moment the controversy first erupted in March 2011, no one concerned in the case — neither BF, nor the Bangko Sentral ng Pilipinas (BSP), nor individuals such as recently arrested former BF director Perfecto Yasay — has provided anything resembling complete and truthful information about it. Figuring out what actually happened is difficult, but worthwhile, because it may uncover the interests who have been served best by the scandal quietly being left unresolved.
Despite protestations to the contrary at the time, BF was clearly a failed bank at the time of its closure by the BSP. It was operating at an interest deficit, in large part because better than 90 percent of its modest loan portfolio — of which at least half was tied up in DOSRI (directors, officers and significant related interests) loans — was past due.
BF was delinquent in repayments of loans from the BSP, the total of which was larger than its own loan portfolio, and it was at least P800 million short in its demand deposit account at the BSP. In spite of claiming that its assets were about P13 billion higher than its liabilities, the BSP determined that the bank had counted some capitalized losses as assets, and that its liabilities were actually about P8.4 billion in excess of its assets.
If that were all there was to it the BSP would have been justified in swiftly pulling the plug on BF. The central bank seems to have been uncharacteristically compromised in the case of BF, however. For one thing, BF had been operating under “enhanced supervision,” which means that its financial circumstances deteriorated under the BSP’s nose. For another, the BSP had a bailout plan in place, and one that it did not necessarily have much discretion in applying. Further raising suspicions, the BSP, through the PDIC, moved rapidly to erase all traces of BF, completing the seizure and liquidation in a little more than a month, far faster than the time period prescribed by law.
And then there is Perfecto Yasay, who almost, but not quite, appears to be the patsy he is vigorously claiming to be. He was charged, along with nine other people, with a total of nearly 30 violations of banking laws back in April 2011; Yasay was a director at BF between 2009 and 2011, and four of the charges — the basis for his recent arrest warrant — were specifically applied to him.
Part of what gives the impression that Yasay may be a sort of fall guy is that he came under attack from the anti-Duterte media weapon Rappler. Only a few media outlets reported details of Yasay’s charges, explaining that they resulted from an improper P350-million behest loan to a subsidiary of Tropical Land Corp., Tierrasud Inc. that was made between 2001 and 2009. That was indeed what was reported by the Manila police, but the reason not many papers published that in initial reports is because it is not exactly correct; the loan predated Yasay’s time at BF as a director. Accuracy, however, has never stopped Rappler from hitting a target as ordered, and Yasay is clearly a target — during his unsuccessful confirmation hearings for the DFA post in March 2017, Rappler attempted to add a bit more shade Yasay’s reputation by dredging up a report “forwarded by a concerned citizen” about a 20-year-old, long-disposed client complaint against him from his days practicing law in the state of New York. To make sure everyone got the point, Rappler helpfully linked its latest report on Yasay to the earlier, discredited story of two years ago.
On the other hand, Yasay’s Tenure at BF was during the period when things really began to come apart at the seams, and as a director he would indeed have a share in the liability for what happened — including, presumably, not acting to correct the outstanding improper loan toTierrasud, as well as others.
Be that as it may, Yasay’s arrest — which he handled in true Filipino style, complete with emotive social media posts and the de rigueur medical emergency — has very much the appearance of a first shoe to drop rather than a forthright effort by the authorities to bring the BF story to a proper and long-overdue resolution. This will not, it seems, be the last chapter after all. It would be vain to hope that what happens next will do anyone any good, and it certainly will not do anything to improve the country’s reputation for being an unnavigable political and legal bog.
ben.kritz@manilatimes.net
Twitter: @benkritz