Like it’s such a big drill

The big deal in the entry of the largest banking group in Japan into a second-stringer bank in the Philippines was—so far—the largest buy-in of any foreign group into any local financial institution.

Last week, Security Bank (SECB) and Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) announced that the Japanese group would acquire 20 percent of the local bank for some P37 billion.

BTMU could very well do it alone in its obvious plan to penetrate the growing Philippine market, since Congress already dismantled the 60-percent ceiling on the investments of foreign banks in local banks through Republic Act 10641.

The law in effect allowed foreign banks to operate in the country on their own or to acquire up to 100 percent of existing local banks.

Last year, the BSP approved the license of four foreign banks for full banking operations in the country—without local partners.

But BTMU opted to team up with a local bank, SECB, which consistently showed impressive fundamentals over the past several years.

When the Japanese investment comes in by the middle of 2016, the capital of SECB would jump from P52 billion to about P89 billion.

The buy-in should be advantageous for both BTMU and SECB.

The Japanese investment would propel SECB to overtake a couple of local banks in the ranking of domestic universal banks in the country, perhaps even becoming one of the top four banks here.

From what I heard, even with the rule allowing BTMU to establish full banking operations here on its own, it was BTMU that sent feelers to SECB for the buy-in.

Actual negotiations between BTMU and SECB started over a year ago, indicating a relatively short period of negotiations.

By the latter part of 2015, BTMU was ready to submit a formal offer to SECB.

By the way, the Bank of Tokyo (one of the four Japanese banks that eventually came together to become BTMU) was perhaps the first Japanese bank that established a representative office in the Philippines some 63 years ago in 1953.

In 1977, Bank of Tokyo obtained a license here to operate as an offshore banking unit, aka OBU, making it the only Japanese bank in the Philippines at that time.

In 1995, under the liberalization policy of the Ramos administration, its local branch acquired a license for full banking operations.

Like most Japanese banks, BTMU has been known to be itching for a bigger slice of the growing Philippine market. In fact, it was said that it was also interested in acquiring UCPB.

As for SECB, the additional capital from BTMU could position it as a large bank in the country that would be independent from any conglomerate.

Notice that the largest banks in the Philippines belong to conglomerates: BDO to the Henry Sy group, Metrobank to the George Ty group, BPI to the Ayala group, and RCBC to the Yuchengco group.

Over the years, SECB showed consistent growth, earning for the bank several awards and citations, and most important to stock market investors, consistent high profitability.

Its president in those growth years was Alberto Villarosa, who now serves as chair.

Personally, I would say that the entry of the biggest Japanese bank into SECB—which would be the biggest foreign investment in a local bank so far—should be Villarosa’s crowning glory.

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Delfin Lee, the leading figure behind the controversial low-cost housing developer Globe Asiatique that reportedly stole billions of pesos from government housing fund Pag-big, has been in jail for the past two years.

That, according to his lawyer who was crying to media last week, was most unfair.

Because their leader has been incarcerated for almost two years, the Lee camp reportedly filed an “urgent motion” before the Supreme Court for the resolution of their case.

In their statement, the Lee camp (i.e. Delfin and executives of Globe Asiatique) claimed the main case against Lee and his executives, the P6.6-billion “syndicated estafa” case, never had any legal basis.

In fact, they claimed in the statement that the Court of Appeals and Makati City regional trial court already cleared them in the case.

Even the Home Development Mutual Fund (aka Pag-IBIG) and Office of the Solicitor General (OSG) conceded that Pag-IBIG actually did not incur the P6.6-billion “loss,” which was the main allegation in the case.

In the case, Pag-IBIG Fund was said to have claimed P6.6 billion in damages as a result of the loans that Pag-IBIG supposedly gave to Globe Asiatique.

The Lee camp said Pag-IBIG Fund documents had belied the claim.

They also said that, in the Senate blue ribbon hearings last year, Pag-IBIG Fund president and CEO Darlene Berberabe admitted that Globe Asiatique did not obtain P6.6 billion loan from Pag-IBIG Fund.

Berberabe also revealed that the company even had receivables of P600 million from Pag-IBIG Fund, which should be more than enough to cover the alleged P18 million in claims of the 28 customers of the company, who were the actual complainants in the syndicated estafa case.

The complainants claimed they were victims of the racket of Globe Asiatique called “double sale” and “ghost projects,” and of course you already knew the drill in such scams.

The Lee camp insisted that, out of the 10,000 buyers in the projects of the company in Bacolor and in Mabalacat (Pampanga), only those 28 individuals filed cases against the company.

They also claimed that those individuals were mostly “delinquent” in their installments on the properties they acquired from Globe Asiatique, noting that they also continued to occupy the housing units, without paying a single centavo in the past five years.

As for allegations of ghost projects, the Lee camp said that, by sheer ocular inspection of their projects, it would be obvious that the company already finished more than 10,000 units, including the amenities, in its township projects.

Last month, the homeowners of those subdivisions wrote a letter to the Supreme Court, asking for the resolution of the case, claiming their interests were already affected by the quarrel between the Lee camp and Pag-IBIG Fund.

To think, the case was actually filed by those 28 individuals, and Pag-IBIG Fund itself did not file any case against Globe Asiatique over the so-called P6.6-billion in damages.

The fund in fact filed only a counterclaim for P12 million.

As for the OSG, it filed a comment before the Court of Appeals that the supposed P6.6-billion damage to Pag-IBIG Fund did not exist.

One of the big deals was that the fund never even tried to collect the P6.6 billion it was claiming on the company.

In other words, what was the big deal?