A shame list

Bank notes 1: By the end of the year, Bangko Sentral Governor Rafael Buenaventura intends to publish a shame list of banks with poor records on corporate governance. This way, depositors and borrowers would have a better idea of which banks to do business with.

The grading system for this particular report card will be done by the group of Institute for Corporate Directors founder, former Finance Secretary Jesus Estanislao.

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Bank notes 2: These days, Bankers Association of the Philippines executive director Leonilo Coronel is bothered (and, possibly, just a little bit confused like everybody else in the industry) by the revenue ruling signed by Internal Revenue Commissioner Guillermo Parayno that lifts the tax exemption on transactions made by foreign currency depository units.

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Bank notes 3: It’s even harder now to catch The Philippine-American Life and General Insurance Co. president and chief executive officer Jose Cuisia Jr.

You see, Philamlife put up three new business ventures last year, all of which have asked Joey Cuisia, a former Central Bank governor, to chair their boards. These are AIG Business Processing Services Inc., which has Neil Elias as president; Philam Equitable Life Assurance Co., which has Carl Gustini as president; and Philam Financials, which has Rex Mendoza as president.

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Bank notes 4: Now, that Philippine National Bank is finally in the black on the third year of its latest rehabilitation program, the challenge for president Lorenzo Tan is to show that net profits can be sustained even without non-recurring income (from the sale of bank assets) and interest income derived from being a government depository bank (PNB is classified as a privately owned domestic commercial bank).

As everybody knows, PNB has undergone several rehabilitation programs (read: it transferred the bulk of its non-performing assets to government) in its long history, including at least one during the Commonwealth period under Manuel Quezon, in large part because it was then a government-owned commercial bank implementing loan programs which had low repayment records.

The last time the bank was rehabilitated was in 1987. At that time, then bank president Edgardo Espiritu used the same strategy as Mr. Tan. It was under Ed Espiritu’s stewardship that the bank’s privatization – then hailed as the country’s most successful because it reached the grassroot level – was initiated.

As everybody knows, Mr. Tan has a five-year management contract with PNB, the same number of years it is estimated to turn around the bank and put the combined shares of government (read: another privatization) and Lucio Tan on the block.

Oh yes, contrary to public perception, Mr. Tan, the professional manager, is the nominee of government, not of Mr. Tan, the tycoon.