OPINION: Yasay as BSP governor?

Ellen T. Tordesillas

Posted at Dec 09 2016 07:29 AM

* Foreign Secretary Perfecto Yasay Jr is being considered to be governor of Bangko Sentral ng Pilipinas (BSP).

* Former President Gloria Macapagal Arroyo is being eyed to be foreign secretary but she really wants to be speaker of the House of Representatives.

* Businessman and Philippine Star columnist Jose Manuel “Babes” Romualdez will be the Philippine ambassador to the United States.

These are impending movements in the Duterte administration being talked about which on the surface seem far removed from President Duterte’s brutal and bloody anti-illegal drug campaign.  They are actually related, especially the plan to put Yasay as BSP governor.

The term of BSP Governor Amando M. Tetangco, Jr., who has held that position since July 2005, ends in July 2017. The spokesperson of the Finance Department, Paola Alvarez, said on Nov. 22 that President Duterte has authorized Finance Secretary Carlos Dominguez III to ask Tetangco to stay for another term.

There’s a hitch, however. The charter of the BSP allows only two terms for the governor. Congress has to amend the charter for Tetangco to serve another term.

A source in the banking industry said the 64-year-old Tetangco, who has been named as one of the  world’s best central bankers by the Global Finance Magazine, has declined the offer of extension of his term, even if Congress amends the BSP charter.

The source said there are also doubts if Duterte really wants Tetangco to stay on, as announced by the Finance Department.  He surmised it was just to soothe investors’ confidence which has been shaken by Duterte’s erratic pronouncements, especially on foreign relations and the negative publicity generated by the  rising number of extra-judicial killings.

It was also noted that the Finance Department’s announcement of a possible extension of Tetangco’s term was made eight days after Duterte blasted the BSP and the Anti-Money Laundering Council (AMLC), calling them “garbage” for not cooperating in his anti-illegal drugs campaign and  against Sen. Leila de Lima whom he has alleged to have received drug money.

In his speech at the 80th anniversary of the National Bureau of Investigation, Duterte said: “I’d like to address myself to the Central Bank guys, and the AMLC. Alam mo, I’d like to warn you, to avoid a confrontation between us, Central Bank people.”

He said Justice Secretary Vitaliano Aguirre II complained to him that AMLC was giving him a hard time: ”The Secretary of Justice now says that you are hard to deal with. You better go to the Secretary of Justice or I will go to you.I will call for you and you have to answer so many questions to me. You choose, either we cooperate in this government as a Republic to protect and preserve our people or do not make it hard for us, otherwise, I will make it hard for you.”

He further said: “You’re also a part of the garbage which I resent to this day. And do not give me a reason to have a confrontation. Palabas ninyo ‘yung ano ang mali diyan.
“There are billions tucked there in the banks, which  were really being washed or just being kept there in the meantime. Go to the Secretary of Justice, the AMLC guys, explain to us in public or I will do the explaining for you. Choose.”

AMLC was created in 2001 to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. It is composed of the BSP governor as chair and  the commissioner of the Insurance Commission and the chairman of the Securities and Exchange Commission as members.

The law creating AMLC provides that the Council “may inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution upon order of any competent court in cases of violation of this Act when it has been established that there is probable cause that the deposits or investments involved are in any way related to a money laundering offense.”

AMLC Secretariat deputy director Vencent Salido denied that they were giving Aguirre a hard time and explained that there are certain procedures to follow. He said what Aguirre was asking “was not covered by the memorandum of agreement between the DOJ and AMLC.”

He also said the Department of Justice (DOJ) should submit either a criminal complaint or an investigation report stating the unlawful activity and the proceeds from it.

In that speech at the NBI, Duterte recalled that during the election campaign Sen. Antonio Trillanes IV came out with the transaction records of his bank account: “You know when I was a candidate, there was a guy, a senator who’s so stupid, torpe talaga siya, that I had 211 million bank deposit. And I was just curious, if I had that money, why did you not initiate an investigation. For I really have none.”

Less than two weeks before the May 9 elections, Trillanes came out with an expose of Duterte’s account with BPI, Julia Vargas branch where some P2.4 billion had been transacted. Duterte initially denied the existence of the account but later on admitted it when deposits were made by third persons which confirmed the existence of the account.
A source said Duterte suspects that it was AMLC that leaked his bank records to Trillanes.

Trillanes has filed a plunder case against Duterte with the Ombudsman .

A source said Duterte wants someone compliant to him in the Central Bank and Yasay had shown such attribute as foreign secretary.

Banking and finance people interviewed have expressed dismay over the possibility of Yasay becoming governor of the Central Bank. One cited the pending case filed by BSP in 2011 against Banco Filipino officials which included Yasay, who was then one of the BF’s directors.

The case was “for falsification, grant of illegal loans, and major violations of banking laws, rules and regulations. “

A lawyer commented that appointing as BSP head someone who has a pending case filed by the BSP is like “putting the fox to guard a hen house.”

There is also Yasay’s alleged unpaid tax debts and mortgages going back to the 1990s in New York.

The lawyer said it may be a minor thing but it constitutes “moral turpitude” defined as "conduct that is considered contrary to community standards of justice, honesty or good morals.”

Not a confidence-inspiring trait for a Central Bank governor.

(MORE next week)

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