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PSBank presents Corona's peso accounts

MANILA, Philippines (Feb 9, 2012) - Despite the defense's objections and a pending petition for a Temporary Restraining Order (TRO) at the Supreme Court, the Senate impeachment court allowed the testimony of the president of Philippine Savings Bank (PSBank) who presented bank records of Chief Justice Renato Corona's peso accounts - but not the dollar accounts.

Asked by Senate President and impeachment court presiding officer Juan Ponce Enrile why he would not disclose the five dollar denominated accounts, PSBank president Pascual Garcia III said doing so would expose him to criminal liability because of stringent provisions in the Bank Secrecy Law pertaining to dollar accounts.

Based on the testimony of Garcia, only three of the five peso accounts had records of deposits as of Dec. 31 of the years 2007 to 2010.

For account number 089-121-01195-7, Garcia disclosed that as of Dec. 31, 2007, the balance totaled P5,018,255.26. From 2008 to 2009, the account contained zero balances, which Garcia explained was an indication that the account had already been closed.

The second account, 089-121021681, had a recorded balance as of Dec. 31, 2010 of P7,148,238.83. According to Garcia, the account was opened sometime in 2010.

In the third account, 089-121019593, Garcia disclosed balances of P8.5 million for 2009 and P12,580,316.56 for 2010. There were no records for the account for the previous two years.

For account number 089-121020122, Garcia said that as of end-2009 and 2010, the recorded balances were both zero.

No records of the account were available for 2007 and 2008.

In the case of account number 089-121017358, Garcia said that there was “no balance of an account that was previously opened, meaning that it had already been closed.”

Based on the figures provided by Garcia, there was a great disparity between the balances recorded in the accounts available and the amount of cash and investments recorded by Corona in his statements of assets, liabilities and net worth (SALNs).

For 2007, Corona recorded total cash and investments in his SALN amounting to only P2.5 million but based on the records of PSBank, the balance in his account as of the end of that year was over P5 million.

For 2009, Corona’s SALN reflected cash and investments amounting to P2.5 million while his PSBank account showed he had a balance of P8.5 million for that year.

In 2010, the SALN of Corona showed an increase in his cash and investments to P3.5 million but his PSBank account reflected deposits amounting to P19.7 million.

The prosecution panel in the impeachment trial has accused Corona of maintaining huge deposits in his bank account, which he did not declare in his SALN.

In refusing to divulge Corona’s dollar accounts, Garcia said that based on Republic Act 6426 or the Foreign Currency Deposits Act, disclosure of information in dollar denominated accounts is prohibited unless it has the consent of the depositor.

Senate Minority Leader Alan Peter Cayetano, after questioning Garcia about the petition the bank filed before the Supreme Court, said the bank was apparently trying to stop the Senate from securing information about the accounts.

Garcia said that he decided to take the place of the manager of its Katipunan branch and take the witness stand in order to save the manager and the other employees from criminal liability.

He said that he took responsibility as president of the bank and that he personally sought the advice of the bank’s legal counsels on what to do regarding the subpoena of the Senate for the dollar accounts.

Taking the blame

Garcia said that he was speaking for the over 600,000 depositors of PSBank, its over 2,000 employees and the 1.6 million dollar depositors in the country when he took the position against disclosing information about Corona’s dollar accounts.

“I don’t want any one of our employees to be exposed to liability. If there is any liability at all, let it be me,” Garcia said.

Upon questioning of Sen. Sergio Osmeña III, Garcia admitted that he was able to talk to the chairman of the bank, Arthur Ty, before he appeared at the Senate.

Osmeña said the Senate should consider issuing subpoenas to the board of directors of PSBank to compel them to appear before the Senate with the necessary documents.

Sen. Franklin Drilon made a motion to compel Garcia to explain to the Senate in writing why he should not be cited in contempt for not complying with the directive to bring along the records of the dollar accounts.

This elicited protest from Sen. Joker Arroyo who argued that moving to cite Garcia in contempt may be too harsh, considering that he was acting in good faith when he appeared before the Senate.

Arroyo pointed out that the Senate, as an impeachment court in the trial of former President Joseph Estrada, did not compel Citibank to produce the dollar accounts supposedly owned by Estrada because it respected the confidentiality of such accounts.

“There is a precedent in the trial of President Estrada. Are we going to disregard that precedent? I thought that any ruling made even by the Senate sitting as a Senate and sitting as impeachment body will have to honor past precedence,” Arroyo said.

“We should grant to the witness some consideration. Consideration that he is saying that he is confronted with a dilemma. Are we so rude that we are now saying that you will follow us and the consequences (for not following) are for you. If you dare disobey we will cite you for contempt,” he added.

After discussions between Arroyo, Drilon, Enrile, Ralph Recto and Osmeña, it was decided that Garcia would only submit a written explanation to the Senate, which they would tackle in a caucus today.

The branch manager of the Bank of Philippine Islands Ayala Avenue, Leonora Dizon, was already at the Senate yesterday but she was not able to testify. She is expected to return today to testify on the accounts held by Corona in her branch.

Discrepancy glaring

“I think that in spite of the fact that we were only able to open two accounts, it is very apparent there is a huge discrepancy on the SALN of the Chief Justice as against the amounts uncovered or disclosed just by one bank, involving two accounts,” said Marikina Rep. Miro Quimbo, spokesman for the prosecution.

“So you are looking at the discrepancy of P16.2 million… or about 600 percent or about 700 percent in terms of under-declaring your actual cash assets, (which) we see a consistent pattern on the part of the Chief Justice,” Quimbo explained.

But defense spokespersons Tranquil Salvador III, Rico Quicho and Karen Jimeno said the evidence on bank accounts are still subject of a continuing objection by the defense counsels.

Compelling banks to bare confidential accounts to the public might trigger bank runs and scare potential investors, Sen. Miriam Santiago said.

“The danger I see is potential bank investors in the Philippines will withdraw their deposits and transfer them to Singapore which is now being known as the Switzerland of Asia because their security procedures are so airtight,” Santiago told reporters after delivering a speech during the annual convention of the Philippine Society of Hypertension and Philippine Lipid and Atherosclerosis Society at the Crowne Plaza Galleria in Ortigas, Pasig City.

The Senate impeachment court junked yesterday Santiago’s motion for the impeachment court to reconsider its subpoena on bank officials and records of Corona’s accounts.

“There is almost absolute confidentiality about accounts you open in Switzerland and Singapore. It’s extremely, extremely difficult to get a court to issue an order to open that account,” she said.

“So if we develop this reputation that even the Chief Justice can have his bank account opened on a mere allegation without more proof might already be sufficient to drive away the capital market from our country,” she added.

“The effect on the economy is devastating. I’m very afraid that there might be bank runs. It doesn’t concern middle people like you and me but it concerns the upper class people who are the real movers and shakers in the society.”

Opposition lawmakers echoed Santiago’s concerns and vowed to investigate the matter.

House Minority Leader and Quezon City Rep. Danilo Suarez said he found it disturbing that Corona’s bank records leaked to the public – purportedly from members of the prosecution panel – even before the Senate’s issuance of subpoenas for the documents. Among those leaked to the media were specimen signatures of Corona.

“(This) will definitely scare investors away from investing in the Philippines,” Suarez told reporters. “I’m drafting a resolution addressed to the two banks, how did it happen that there’s a leak? I’m drafting it today and it will be filed on Monday. This will clearly show to investors that Congress will act on this,” he said.

He said there is a need to sanction bank officials found responsible for the leakage. “We will not just allow any violation of the bank secrecy law,” Suarez said.

House Deputy Minority Leader and Zambales Rep. Ma. Milagros Magsaysay said the leakage of bank records is sending shivers to other depositors.

“The PSBank and the BPI should be prepared (for loss of depositors),” Magsaysay said, adding that the employees who leaked Corona’s bank account “should be fired because the bank’s credibility was put in question.”

They also cautioned Oriental Mindoro Rep. Reynaldo Umali, one of the House prosecutors who got the information about Corona’s bank records, to “be careful in releasing documents and evidence to the public.”

Umali had claimed before the Senate impeachment court that an unidentified “small woman” gave him an envelope containing Corona’s bank records.

Meanwhile, the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. (FFCCCII) said it will remain neutral on the conduct of impeachment proceedings against Corona.

“Our stand is neutral... The impeachment court will do it its way,” FFCCCI secretary general Fernando Gan said over the phone. He said the organization is generally pleased with the progress of the impeachment trial. (From