How to keep our trust and confidence in banks

For tonight’s special presentation on Straight from the Sky, we celebrate a very important milestone in Cebu’s Tourism industry as it is the 15th anniversary of the Shangri-La’s Mactan Resort & Spa. When the Shangri-La opened their doors in Mactan 15 years ago, it resulted in Cebu making it to the world tourism map. The owners of the Shangri-La heard about Cebu’s “Island in the Pacific” story and they jumped into our tourism bandwagon. Since then, the Shangri-La has grown and developed into a major tourism destination for the entire Philippines and Asia.

With us to tell the Shang’s story is the Shang’s 7th general manager, Mr. Raymond Bragg. Then we have Mrs. Sheila Sepulveda, Director for Human Relations who doubles as the Shang’s historian, Mr. Martin Brenner, Resident Manager, Ms. Lyndell Nellis, Area Coordinator for Chi, The Spa, Mr. Jesper Strom, Sports & Recreation Manager and Mr. Darren Conole Director for Food and Beverage, who shares my passion for World War II history. Talking with our friends from the Shangri-La gives us a bird’s eye view of how things are being done to make the Shangri-La the best resort in Asia, if not the world. So watch this very interesting show on SkyCable’s channel 15 at 8pm.

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We are expecting a very long holiday season as some dates are “sandwiched” to give our people more holiday time. But as unfortunate as it is, some rural banks decided to take an early holiday, declaring without warning that they can no longer service their depositors. These banks are the Pilipino Rural Bank, Rural Bank of Carmen, Philippine Countryside Rural Bank and the Supreme Rural Bank that all belong to the Legacy Group.

In news reports, the Legacy Group blames heavy withdrawals as one of the three reasons why these banks had to declare a holiday. Of course, the other reasons are the global financial crisis and bad debts. Yessir, it is very easy to blame their own depositors for the collapse of their rural banking empire or even the global financial crisis; after all, no one has the guts to say we made a mistake or mea culpa!

So as not to spread the bad news happening among the other rural banks, Cebu Rural Banks Association (CRBA) President Danny Arcenas issued a statement assuring all rural bank clients that what’s happening with those rural banks is an isolated case. He pointed out that 98% percent of the operations of Rural banks throughout the country are in normal mode. He made this statement in line with the problems that the Rural Bank of Subangdaku (RBS) was experiencing, especially in the RBS branch in Talisay where depositors who wanted to withdraw were not allowed to do so. Will RBS be the next rural bank to declare a holiday? I think that the Bangko Sentral ng Pilipinas (BSP) should tell us the truth on RBS!

I fully agree with Acting Mayor Michael Rama when he pushed for the creation of a center that would give people information about the banks that they are dealing with. It is up to the BSP or the Cebu Bankers Club on how they would create this information system, especially in this age of instant information in your computers or cellphones. We must not lose our trust and confidence in banks.

Banks must set up this information center. Today we still have confidence in our banking system. They must ensure that our people would always have that trust and confidence.When you lose that then we will have a crisis similar to what’s happening in Wallstreet today, where Americans no longer trust their banks.

While we laud the BSP for its quick action to come to the aid of worried depositors so that the Philippine Deposit Insurance Corp (PDIC) can come to their rescue, the BSP should have set up a monitoring mechanism that would warn depositors not to deal with banks that give out ridiculous interests. These people know their businesses, but the unfortunate depositor with his hard-earned money doesn’t have any idea that the bank he is putting his money in trust might be in dire financial straits. Having this information system would give a depositor a guarantee that the bank that he is dealing with is financially healthy.

A few months back, I already heard about the activities of the Legacy Group. Whenever I heard of stories like getting a hundred percent return of your money in a very short time, is more than enough warning for me that we are dealing with some kind of pyramid scheme or worse! Let the collapse of the Legacy Group be a lesson to would-be depositors not to be greedy and deal with banks who give out very high interests for their savings. That is a very unhealthy sign.