Fear grips a good part of the business sector, owing to a bill that the Bangko Sentral ng Pilipinas (BSP) is pushing for in Congress. The bill entails drastic changes in the BSP’s 20-year-old charter, ultimately giving it awesome powers.
Just take a look at a couple of provisions in the bill that can make you faint. The bill gives the BSP the “authority to require from any person or entity … any data which it may require for the proper discharge of its functions and responsibilities.”
Not only that, the bill proposes to give the BSP the power to obtain “information” on transactions between a bank and its parent company, as well as affiliates.
A former member of the Monetary Board sort of sugarcoated the provision by saying that the BSP merely wanted to “obtain data from any private person or entity.” Such innocence!
In effect, if Congress were to pass the bill, it would allow the BSP to go inside the very hearts and brains of all businesses in this country—whether local or foreign—to the point of requiring them to open bank deposits and investment accounts to BSP personnel.
Supposing that you want to sell 10 percent of your holdings, not the entire investment, just 10 percent. The bill requires you to ask the permission of the BSP.
Those changes are enough to scare the business sector, including prospective foreign investors who, in their country of origin, are not used to authorities prying deep into their private affairs without any limit whatsoever.
Those dreaded changes in the BSP charter are contained in House Bill No. 3112, fully supported by Senate President Franklin Drilon and House Speaker Feliciano Belmonte, the main men of our leader, Benigno Simeon (aka BS), in Congress.
It seems the BSP bill is now a priority measure of the Aquino (Part II) administration. It further means that the bill is certain to pass Congress.
From what I gathered from BSP insiders, however, it all began when the BSP decided that it wanted to raise its capital from the present P50 billion to P200 billion.
Thus, the main objective of the bill, at least originally, was the increase in the capitalization of the central bank, which would put the BSP capital at par with those of other central banks in the region.
The BSP noted, for instance, that the economy has grown by almost eight times in the past 20 years since its last charter amendment in 1993.
It argued that, to perform its job in keeping prices down (i.e., fighting inflation) and stabilizing the peso’s exchange rate (i.e., fighting dollar speculation), it would need a much bigger capitalization.
Precisely to do its job in the past 20 years, the BSP was able to increase its total liabilities to almost P4 trillion, almost four times its original liabilities of P500 billion in 1993.
Its liabilities kept on increasing due to the huge losses it incurred year in and year out, amounting to billions of pesos. These were not just paper losses, mind you. The BSP incurred actual losses in the financial markets.
Perhaps those losses could have made our lawmakers wonder that, if the BSP lost hundreds of billions of pesos in the financial markets over the years, some other players in the markets must have gained from those losses big time.
In the financial markets, as in the casinos, when somebody loses, somebody else wins. And who are the usual players in the financial markets? Well, they are the guys with a lot of money, to begin with, able to understand the sophistication of financial markets.
Anyway, under the present bank secrecy laws, the BSP indeed can hardly move in cases involving criminal syndicates and corrupt government officials.
So, to ease the fear in business, the BSP says its officials never mean to use the new power of the BSP under the proposed changes in its charter to harass any business group or individual.
We all know that immense “power” is always open to abuse. How can Congress now protect the rights of the individual or a business entity?
Subsequently, the BSP backtracked and told lawmakers that if the “power” provisions in the bill could be open to abuse among BSP personnel, it would not mind Congress putting into the bill some measures for check and balance.
Well and good. In this country, however, we all know that business groups are always able to inject into any administration their own people, perhaps as payback for some help in the election campaign to bring the politico into power.
If the bill were to be passed in Congress, giving the BSP immense powers, there would be no telling how the BSP could become the main target of political appointments sponsored by business groups, hoping to put their own men in a position to check on their competitors, for instance.
Also, under the proposed law, there is a provision that will grant BSP personnel immunity from any suit, even if they commit blatant mistakes damaging to a particular business, as long as they use the BSP’s immense powers “in good faith.”
Sure, every government official always abuses his power in good faith!
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The off-and-on reclamation project of taipan Henry Sy’s SM group at the Manila Bay in Pasay City invited “objection” from a company called S&P Construction Technology & Development Co. Inc.
S&P who? In the business news beat, S&P stands for Standard and Poor credit rating company. And so you can perhaps do some searches on the Internet until you are blue in the face, and I bet you cannot find any information on a company in the Philippines about that S&P construction firm.
Considering that S&P Construction Technology and Development balked at a project as big as the SM group’s P55-billlion 300-hectare reclamation in Pasay, backed by the richest man in the country, at least according to Forbes magazine, you would think that S&P would be well known in the local construction and real estate development sectors—perhaps in the league of SM, Robinson’s, Ayala, Megaworld, Century Properties or even DMCI.
From what I gathered, the company was an instant urgent joint venture between two local groups that, quite recently, also came together in another business, perhaps specifically designed to target the SM group’s reclamation project.
Under the terms of the project, the proponent should have done at least a 140-hectare reclamation project. As it turned out, neither the newborn S&P nor the two corporate gadflies put together had reclamation projects in the past to qualify as bidders in a Swiss challenge to the SM group’s unsolicited proposal.