THE Department of Finance (DOF) said it is looking at other options to recover the government’s investments, estimated at P42 billion, in the United Coconut Planters Bank (UCPB).
Finance Secretary Carlos G. Dominguez III said the government is evaluating other options apart from privatizing the UCPB.
“We are evaluating. The government has supported this [UCPB] for so many years,” Dominguez said. “The question is, how is it best for us to recover the P42 billion, plus all the cost of money of that P42 billion all these years? How is it best for us to recover that? Is it through privatization or other means?”
Dominguez told reporters he estimates the cost of money involved at P100 billion.
The finance chief explained that the Department of Finance (DOF) and the Philippine Deposit Insurance Corp. (PDIC) are still calculating the final numbers to identify the total investments made by the government in state-owned UCPB.
Dominguez said the government wants to regain all the funds it has invested in the bank.
“I asked the PDIC to calculate and also our own staff to compare. We haven’t come up with the final amount but it’s large. As chief financing officer of the country, I’d like to get back everything that we have there; I think that’s the goal. Now, how we do it, is it through privatization or other means?”
Dominguez, however, said he’s “pretty sure that privatizing it is not going to do it.”
Two years ago, the government said it is winding down support for the UCPB and would soon set in motion a likely phased withdrawal of national government deposits as its two-year support commitment lapses by year’s end.
Such withdrawal would compel the government to privatize the lender quickly while ensuring the potential buyer or buyers have the wherewithal to inject fresh equity.
Officials said the potential private investor should not only have pockets deep enough to purchase the government’s 73.9-percent UCPB shareholdings but have plenty more for fresh capital injection estimated to cost at least P15 billion.
The fresh capital infusion requires the purchase or subscription to 37.2 million UCPB common shares to bring the bank on even footing with existing universal lending peers in the industry.
Citing personal reasons, Higinio O. Macadaeg Jr. resigned last month as UCPB President and CEO, a post he served since October 2016.