MANILA, Philippines—Everything was done in good faith.
National Museum Chair Ramon del Rosario Jr. and Director Jeremy Barns said this in response to the Commission on Audit (COA) taking issue with the board of trustees’ handling of the museum’s P370-million endowment.
The COA, in a recent report, pointed out that the money, being public funds, should have been deposited in and managed by a government bank.
In an interview, Del Rosario and Barns explained that the board made the decision to have the funds managed by private financial institutions, BDO Private Bank and BPI Asset Management, in the belief that the National Museum had sufficient fiscal autonomy to do so.
“The board felt it was free to do this [based] on its reading of the law [creating the National Museum],” Barns said.
“The law stresses the special nature of the museum, its fiscal autonomy and the fact that it’s supposed to subscribe to best practices applicable to other institutions,” he said.
One such “best practice,” he said, was to have the museum’s funds invested by capable investment managers like BDO and BPI, the largest and third-largest banks in the country in terms of assets, respectively.
Barns—appointed museum director by former President Gloria Macapagal-Arroyo and reappointed by President Aquino on the recommendation of the current Del Rosario-led board—said the decision had proven beneficial since some P51 million in investment income had been earned for the museum by its private bankers to date.
In fact, two previous resident COA auditors had not barred the practice, he said.
Even former Sen. Edgardo Angara, author of the National Museum law, had no issue with it, Barns said.
However, since the National Museum has little choice but to comply with the present COA’s rigid interpretation of the rules, the board has ordered BDO and BPI to terminate its investments and the funds will henceforth be transferred to low-yielding government securities with the Development Bank of the Philippines, Del Rosario said.