IMF-WB okays manner of PNB bidding

The International Monetary Fund (IMF) and the World Bank (WB) will consider the Philippine government to have complied with its conditionality on a transparent and fair disposition of the Philippine National Bank (PNB) even if the bank's scheduled May 15 sale ends in a failed bidding.

Bangko Sentral Gov. Rafael B. Buenaventura said the agreement reached between representatives of the IMF-WB panel and the Philippine government also allows both the government and taipan Lucio Tan to go "our own merry ways" in case a failed bidding.

The Philippine government, is not bound to a timeframe but rather to the holding of a fair and transparent bidding for PNB, Buenventura said, as he expressed confidence the bidding would be successful.

But if it does fail, Buenaventura said, Tan has already indicated that he would go his own way of either calling for another capital increase in PNB or selling his 46 percent alone.

Tan, Buenaventura said, he indicated that he could easily sell his 46 percent stake since it would still allow the buyer majority control of the bank.

Another option for Tan is to make another capital call which could again dilute the government's holding in PNB if it again chooses not to make the subscription.

The government, however, Buenaventura said would weigh its option if and when Tan makes such a capital call. This includes a team-up by the government with other shareholders in PNB for a joint sale of their shares.

One foreign fund manager, Templeton Asset Management has indicated that it is willing to undertake a joint sale.

However, at the moment, government is concentrating on selling its combined share thirty percent with that of Tan's 46 stake.

The issue of the PNB privatization, Buenaventura said, took up most of the discussion with the IMF.

The IMF did not tie the government to selling PNB even at a loss, but rather to a fair and transparent disposition.