Government to support moves to strengthen PNB — Romulo

The government has expressed its willingness to discuss options to strengthen the Philippine National Bank (PNB), including the possibility of a joint sale of its remaining stake in the bank, together with controlling stockholder Lucio Tan.

Finance Secretary Alberto Romulo said government will support moves to beef up the country’s fifth largest bank in which the government has remaining shareholdings of about 16 percent.

"We are open to anything that will strengthen PNB, and for that matter, the entire banking system. We are all for it, we want a healthy banking sector," Romulo said, adding the government also wants to resolve the issues delaying the bank’s rehabilitation.

The finance chief recently asked the BSP which already approved in principle PNB’s rehabilitation plan, to hold off implementation of the recovery program to give the new government the chance to review its terms and conditions, and to introduce provisions that would fit into government’s plan of maximizing its returns from a possible disposal of its remaining shares in the bank.

Banking sources said discussions between Tan and the government are likely to include the possible replacement of the bank’s government-appointed or nominees in the board of directors.

There are four government nominees in the 11-man PNB board named in last year’s stockholders’ meeting: its chairman Andres Narvasa who was legal counsel of deposed President Joseph Estrada, Roberto Marquez, Nieves Confesor and Cielo Macapagal-Salgado.

Narvasa, sources said, is likely to be ousted because of his alleged role in approving PNB’s loan to property and gaming BW Resources Corp. which figured in the country’s worst stock market scandal when its key officials and Estrada’s crony, businessman Dante Tan, were charged with stock manipulation last year.

Macapagal-Salgado, a half sister of President Gloria Macapagal-Arroyo, is also expected to step down out of delicadeza.

Bangko Sentral and Pilipinas (BSP) Governor Rafael Buenaventura agreed that the final rehabilitation plan for PNB should be tailored fit to meet government’s requirements.

"The central bank’s concern is for PNB to be viable, that is our bottom line," the BSP chief said, adding the BSP will wait for the finance department’s decision.

"The DOF will tell us what they think is their best option for PNB and we will go along with them," Buenaventura said.

He added the BSP will have to work closely with the DOF and the Philippine Deposit Insurance Corp. (PDIC) to ensure the PNB rehabilitation plan will be an integrated plan.

PNB owes the BSP P15 billion and PDIC P10 billion in emergency loans extended in October last year to help PNB cope with liquidity problems resulting from heavy withdrawals.

Earlier, the BSP recommended the joint sale of the stakes of Tan and the national government in PNB to resolve the issues delaying the bank’s rehabilitation.

Tan controls more than 70 percent of PNB while about 16 percent is owned by government.