Being a member of the Board of Directors of United Coconut Planters Bank (UCPB) has its perks. Moreover, it enabled me to continue working for the country’s coconut industry in general, and UCPB, in particular, not only because of my affiliation with former Ambassador Eduardo Conjuangco and as former President of CIIF, but also because, among the five people who were asked to come up with the solution to address the coconut crisis in the local market during the 1970s, I am now the only one living. This, of course, is another topic that I would one day discuss in my column.
In my April 26, 2018 letter to Department of Finance Secretary Carlos G. Dominguez III, I explained my reasons for resigning from the UCPB Board, just as I also expressed the same reasons in my April 30, 2018 letter to UCPB President Higinio O. Macadaeg III.
I am not against the privatization of UCPB. What I am against is the way the bank’s top management wants it done. Under UCPB’s current structure, the bank is considered a private entity by virtue of Presidential Decree No. 2029, which clearly provides that, a government financial institution (GFI) such as UCPB, that was previously formed and incorporated under the corporation law but later aquired by the government and its subsequent privatization had already been announced, should continue to be treated as a private entity and not a government-owned and -controlled corporation (GOCC).
I cannot understand, therefore, why the bank’s top management wants to convert the bank into a GOCC first before having it privatized, when under PD 2029, it can already be considered a private entity. Converting UCPB into a GOCC would not only complicate and lengthen the bank’s privatization process, but it would also affect its bankability with prospective investors.
In one of the bank’s board meetings, the UCPB’s Chief Legal Counsel was asked by the bank president to study the status of PD 2029 on the bank’s privatization. The chief legal counsel, however, claimed that said PD had already been repealed. But upon my strong suggestion, the services of private law firm Sycip, Salazar was engaged to conduct the research on PD 2029, and the law office’s report stated that PD 2029 has not been repealed and is still in effect.
On this light, I suggested that the findings of the Sycip, Salazar research on PD 2029 be included in the letter that the bank would submit to the Office of the Government Corporate Counsel (OGCC). My suggestion, which was approved by the Board, was not, however, included in the letter.
As a GOCC, UCPB would already fall under government regulatory control, by agencies such as the Commission on Audit (COA) and Civil Service Commission (CSC), among others. Moreover, its privatization would already be governed by the the Philippine Procurement Law, and the salaries of its officers and staff could also be reviewed for compliance to government-prescribed salary standards.
As a private investor interested to acquire the bank, converting UCPB into a GOCC first before privatizing it would mean untangling the web of govenrment regulatory control on the bank before it can be fully operational as a private bank, when, under the law, it is now a private bank.
I believe the UCPB should be able to get a better deal in its privatization, if it is offered lock, stock and barrel, including its building.