Optimum Bank

Villar faces new raps for bank’s ‘sweetheart deal’

Villar faces new raps for bank’s ‘sweetheart deal’
By Alcuin Papa
Philippine Daily Inquirer

MANILA, Philippines—Nacionalista Party presidential candidate Manny Villar benefited from a P4.5-billion “sweetheart deal” between a bank he owned and the Bangko Sentral ng Pilipinas (BSP), the party-list group Akbayan charged Thursday.

In a press conference, Akbayan Rep. Risa Hontiveros, now a Liberal Party senatorial candidate, said the 1998 deal predated the C-5 road extension controversy also involving Villar.

“Before C-5, there was C-4.5, a P4.5-billion anomalous loan the Villar-owned Capitol Development Bank received from the central bank,” Hontiveros said.

Akbayan legal counsel Ibarra Gutierrez III said they were set to file plunder and anti-graft charges against Villar in connection with the deal next week.

Hontiveros said Capitol Bank in March 1998 was able to secure two loans for P2 billion and P1 billion from the BSP through a loan facility under the New Central Bank Act (Republic Act No. 7653) that was authored by Villar himself when he was the congressman from Las Piñas City.

The two loans came due on Sept. 16 and 22, respectively, of the same year.

In April 1998, the BSP issued two more loans to Capitol Bank in the amounts of P1.168 billion and P331.9 million, for a total of P1.5 billion, using the same facility. These loans were to mature on Oct. 19 and 21, respectively, of the same year.

But Hontiveros said Capitol Bank defaulted on the loans.

“It was after a year, on Dec. 13, 1999, that the BSP issued a final demand letter to Optimum Bank, which assumed the loans, asking for a settlement of what stood at the time as a P4.34-billion indebtedness exclusive of accrued interest and penalties,” Hontiveros said.

She said the BSP eventually agreed to accept as payment mortgages from three corporations—Adelfa Properties, Palmera Homes and Carissa Homes—in September 2000 and May 2001, “over two years after the P4.34-billion in loans had fallen due.”

This was in violation of the law, she said. “Furthermore, in June 2001, or nearly three years after the loans came due, BSP records showed Capitol/Optimum Bank still owed P3.333 billion.”

In the case of the P1.5-billion loan, Hontiveros said the BSP foreclosed on properties in Norzagaray, Bulacan, that had been used as collateral. This despite the titles to the properties having been declared fake by the Land Management Bureau, the Supreme Court, and the Department of Environment and Natural Resources.

Special treatment

Gutierrez said Capitol Bank received special treatment from the BSP.

The loans should have also been approved by the Monetary Board, he said.

In a press statement issued in response to Akbayan’s allegations, lawyer Nalen Rosero-Galang, Villar’s chief legal officer, said, “This already sounds like a broken record.”

“Capitol Bank’s transaction with the BSP more than 10 years ago is a non-issue.”

“And if indeed there were violations or irregularities committed, they should bring the same to court, instead of parading themselves to enhance their less-fortunate popularity,” the statement said.