PEP Coalition

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Central bank scores RCBC for ‘lack of prudence’

Inquirer
6/13/07
By Elizabeth Sanchez-Lacson

MANILA, Philippines — The central bank, Bangko Sentral ng Pilipinas (BSP), has censured the trust division of Rizal Commercial Banking Corp. (RCBC) for “lack of prudence” in managing the trust fund of the pre-need company Pacific Plans Inc.

Both RCBC and Pacific Plans are units of the Yuchengco group.

BSP Assistant Governor Dolores Yuvienco said that under Monetary Board Resolution No. 574 issued on May 17, the BSP approved imposition of “penalty for lack of prudence” in the management of PPI trust funds.

The BSP declined to say how much it levied on RCBC, but RCBC described it as “a minor monetary amount.”

The central bank warned RCBC that similar future incidents showing “lack of prudence” would result in stiffer sanctions.

The 3,000-strong Parents Enabling Parents (PEP) Coalition Inc., a group of Pacific Plans education plan holders, said in a new briefing Tuesday that the central bank issued the resolution on RCBC in answer to a complaint PEP filed with the BSP two years ago.

RCBC legal counsel Macel Fernandez-Estavillo contested PEP’s allegations of mismanagement, saying the BSP found no evidence of mismanagement by RCBC.

“While we differ with the findings of the BSP, we emphasize that the BSP has not made any findings of mismanagement by RCBC Trust,” Estavillo said in a written statement.

“The lack of prudence in management means that there is a standard required in managing trust funds which the BSP found we did not meet,” Estavillo told Inquirer separately in an interview.

Pacific Plans legal counsel Felix Desiderio Jr. said the company’s management maintained that Pacific Plans placements in the RCBC trust division were sound.

“We wish to point out that the root cause of the Pacific Plans illiquidity problem is the deregulation of tuition … which resulted in the skyrocketing of school fees by more than 50 percent in the 1990s,” he said. With INQUIRER.net

June 13, 2007 - Posted by | Philippine Newspapers/Web News | , , , , ,

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