PCGG nominees holding on to UCPB board seats

After infusing P20 billion into United Coconut Planters Bank (UCPB), the Philippine Deposit Insurance Corp. (PDIC) is still unable to take full control of the bank as the Presidential Commission on Good Government (PCGG) continued to hold on to all nine of its remaining seats in the board of directors.

UCPB has managed to operate smoothly during the transition period when a new president was appointed and former chairman Eduardo Go resigned from the bank, but PDIC’s failure to take over the bank has created uncertainties despite the efforts to normalize management.

Well-placed sources revealed that Go’s resignation allowed the entry of PDIC nominee and veteran banker Deogracias Vistan but PCGG still retained control of the 15-man board of directors, with three more PDIC nominees still waiting for the commission to revamp its representation to the board in order to release three seats.

According to sources, PDIC has already delivered all of the P20 billion that it had committed to infuse into the bank but despite this, the board is still controlled by PCGG with nine seats against PDIC’s five.

At present, the PDIC is represented in the UCPB board by bank president Jose Querubin, Rose Casiguran, Noemi Javier, Norberto Nazareno, and Vistan. Still waiting to join the board of directors are former Education Secretary and Monetary Board member Arman Fabella and veteran banker Ruben Almendras who used to head the Rizal Commercial Banking Corp.

The PCGG, however, still controls the board with nine representatives, namely: Alejandro de Asis, PCGG commissioner Ruben Caranza, Carolina Diangco, William Dichoso, Carlo Marco Estavillo, Vicente Fabe, Jose Mari Faustino, Prudencio Garcia, Rolando Golez and Romeo Rayondoya.

PDIC was supposed to have taken over the board of directors after the formal signing of the landmark P20-billion financial assistance package but sources said the PCGG had repeatedly failed to name which one of its incumbent representatives would leave and which ones would stay.

"It’s a no-brainer that the PDIC has to be in full control of the policy-making body in order to steer the bank in the direction that it should go," said one source. "Until then, the bank is frozen in this wait-and-see void where it can only do so much."

UCPB has also yet to submit its rehabilitation plan for approval by the BSP although the agreement signed in June was officially known as the "rehabilitation agreement."

Under the agreement, PDIC would infuse P20 billion into UCPB through a P7-billion Tier 2 offer, an P8-billion outright purchase of UCPB’s non-performing assets and a P5-billion purchase of other assets with a buy-back option.

UCPB has already advanced P5 billion as early as May this year and the remaining portion of the assistance had already been disbursed.

"This is a good bank," said BSP governor Rafael Carlos Buenaventura earlier. "It has a network of 187 branches and since there is a moratorium on bank-branching, UCPB has a natural advantage."

In addition, Buenaventura said the UCPB already has a firm brand recall, it owns a thrift bank and it has an asset base of P97.24 billion, representing 3.1 percent of the assets of the entire commercial banking industry.