Conflict of interest

Top banking officials, mostly coming from the private sector, are expressing their growing concern on the Philippine Deposit Insurance Corp.’s (PDIC) increasing hold and influence over their industry.

So far, the PDIC has successfully gained control on three of the country’s top 15 banks – all acquired using public funds. After agreeing to assist in rehabilitating PNB in 2002, PDIC then proceeded on bailing out moribund United Coconut Planters Bank (UCPB) from sure failure last year.

Very recently, it again partnered with the owners of mid-sized PBCom in breathing new life into the bank.

While these "messianic" acts of the PDIC should be getting nods of approval from the banking sector, questions now abound as to the soundness of getting the deposit insurers this amount of control over the industry. What is of greater concern is PDIC’s choice – in most cases, "controversial" – of nominees to sit as members of the boards of these banks under its control.

One respected banker even fears that the banking industry is now at the mercy of vindictive and abusive political bureaucrats at the helm of the PDIC who use the banks they control for political purposes.

Apparently, these PDIC-nominated directors are also good in harassing and controlling the innocent owners and officers of these banks. Another banker even suspects that these appointees could even be influenced by politicians outside of government. From the looks of it, this concern is not unfounded.

Take the case of Norberto Nazareno, who is widely known to be a staunch supporter of presidential candidate Raul Roco. After a forgettable stint in PNB as member of the board, Nazareno is now sitting as director of UCPB. Questions have previously been raised about his being in a Macapagal-Arroyo-appointed UCPB board but it seems that he has so far been able to get away from being ousted from his present post. But the story on Nazareno does not end there.

Questions on Nazareno’s person are now no longer limited to his political color but on the basic Filipino value of "delicadeza." For those with more Western orientations, "conflict of interest" is the term that comes to mind when referring to the banking has-been.

After being eased out from the PNB board in 2002, Nazareno joined UCPB as director middle of 2003. So what’s wrong with that? Nothing really, if he only gave up his directorships in some of PNB’s foreign-based subsidiaries. But he didn’t. And why should he? He gets $500 to $1,000 in monthly per diems from these subsidiaries, and that’s on top of the per diem he’s getting from his new home – UCPB! If you care to do the math as to how much he makes in a year out of his former bank – well, he’s still in at least three PNB subs. Start computing.

From UCPB, Nazareno gets P10,000 for every board meeting, which happens more than once every month – on the average. He gets another P10,000 for every committee chairmanship, of which, he holds no less than three. His talent fees for these committees are counted on a per appearance basis. The more meetings he attends, the more P10,000 talent fees he gets. Not bad!

And what has he succeeded on doing in UCPB? Nothing really concrete at this point. The only thing that UCPB insiders can say about him in agreement is that UCPB officers hate him with a passion. Nazareno is said to be really good in bullying officers whom he always suspects to be on the take – or are doing some hanky pankies.

It was during his time as top man of State Investment House, that the company collapsed in the same magnitude as All Asia Capital. In PDIC, it was also this guy who refused to help rehabilitate Urban Bank. Now that surprises many for he is also the one who rallied to support PBCom, a bank with the same size as Urban but with more bad loans.

But that’s just PDIC nominee number one. Coming right up, the person behind RCBC’s credit card woes.

Successful Relaunch

The relaunch of the Associated Broadcasting Corp. (ABC 5) was indeed one hell of a party.

And if ABC 5 is really that bent on being a strong number three and even number two in the television broadcasting field, then industry leaders ABS-CBN and GMA 7 have something to be worried about.

Among the stalwarts who graced the occassion were businessman par excellence and ABC 5 president and CEO Tonyboy Cojuangco with his beautiful partner Gretchen Barreto and their pretty daughter, board chairman Jose Pardo, ABC 5 director and Bank of Commerce president Raul de Mesa, San Miguel Corp. president Ramon Ang, SMC board member and former GMA 7 president Menardo Jimenez Sr. with his son Butch, Associated Broadcasting Marketing Corp. (AMC) managing director and former GMA 7 marketing whiz Bobby Barreiro, STAR columnist Babe Romualdez, newsmagazine host Cheche Lazaro who earlier left GMA 7 together with her programs, ABC 5 programming head Dan de Padua also formerly from GMA, to name a few.

After bagging the contract to air the PBA games, ABC 5 has again rocked the TV industry when it announced last Friday that it will be airing the immensely popular American Idol.

ABC 5 is spending billions of pesos to improve its transmission and widen its reach. In fact, it has partnered with Echostar, America’s largest direct-to-home satellite TV company, to air its programs in the US and rival ABS-CBN’s The Filipino Channel (TFC) big time. Unlike TFC, however, wherein subscribers in the US have to buy a separate box to watch a single Filipino channel, the partnership with Echostar allows ABC 5 to be offered together with other channels currently being enjoyed by Echostar subscribers without having to pay additional.

ABC 5 has likewise partnered with RMN (Radio Mindanao Network) to allow the broadcasting of ABC 5 programs, including the news, in RMN partner-radio stations.

Are we expecting any less from Tonyboy? After giving up the chairmanship of PLDT, he has committed to devote all his time and effort to rebuilding ABC 5. Since taking over the company late last year, he was able to propel it from a weak number four or five to the number three slot neck-to-neck if not completely edging out ABS-CBN’s Studio 23. The immediate goal is to be a strong number three and then later go for the number two slot held by GMA 7 or ABS depending on who you are talking to.

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