The Marcos Martial Law bank heist

Buddy Gomez

Posted at Mar 23 2016 11:20 PM

Filipinos are no strangers to financial scandals and anomalies. 

The Philippines has a history of banking encounters of the strange and convoluted kind. Always deleterious and near irreversible disasters. But we have always survived, albeit derailing what otherwise might have been a progressive trajectory towards national development. Being back to square one is therefore not an unfamiliar scenario. And it looks as though we have gotten ourselves another hot ‘kamote!’ Or to be more precise, one that fell into the country’s lap!

Of note, however and happily, this one does not involve Filipino-owned funds. Furthermore, the event is not occasioned by any partisan political accommodation much less is there an evil mastermind politician lurking behind. You see, our history of skulduggeries involving fiduciary funds national in character have invariably involved politicians, as I will attempt to recall and share in a bit.

Nonetheless, how our concerned and responsible elders address and handle the current instance of this front-page-hugging cyber heist of Bangladeshi national funds is of critical concern. The situation can have unwelcome consequences. As we non-expert sidewalk supervisors (otherwise known as ‘miron’ or ‘usisero’) all know, from Bangladesh’s depositary in the US Federal Reserve Bank of New York, US$81 million found its way to and through the local Rizal Commercial Banking Corporation and from there, the current scandal arose. The subject involves esoteric financial matters with nuances that are beyond the ken of ordinary mortals like most of you and, of course, moi.

INFOGRAPHIC: $81M heist: The money trail

Be that as it may, it is facile enough to understand that while the scheme does not involve hard-earned money of local depositors, the Philippines’ carefully nurtured reputation and our newly established level of respect from and within the international financial community stands threatened. Nope. It is absolutely not the end of the world! Folks, juxtaposed against national experience, this is a hiccup even if it has attracted international attention.

Nevertheless, the sooner this monumental white-collar criminal mystery is solved, very obviously the better. In fact, best. That our country has been chosen by the suspected international syndicate through which their cyber/electronic theft, laundering and distribution scheme has been pulled off is a rousing reminder of an apparently long neglected wake-up call. Once again, our banking laws, specifically the ones dealing with secrecy and confidentiality, have been exposed as the soft underbelly of our banking/financial infrastructure. In other words, attractive and prone to expert embezzlers.

INFOGRAPHIC: Secrets of the Bank Secrecy Law

Unfortunately, a Senate investigation purportedly “in aid of legislation” (and, ‘tis the season--political exposure, for sure!) that is cornering much of the noise is not the ideal route to take. It is best that politicians lay off and leave the matter to the Bangko Sentral, the Anti-Money Laundering Council, and the National Bureau of Investigation. When the time for remedial legislation becomes apropos, an event which must perforce occur, then the legislature can come front and center.


The earliest banking scandal on public record involves the government-owned Philippine National Bank at a time when there was a dearth of Filipino banking professionals. The newly ‘Filipinized’ insular government following the passage of the Jones Law created the country’s very first government-owned commercial bank. 1916. 

Within less than five years of its operations, PNB was in the throes of bankruptcy! Its first Filipino president jailed for embezzlement! Politics in the country’s economic development celebrated its first victim!

In gist, the bank’s existence and operations were tied up with national development which was heavily anchored upon agricultural enterprises, the promotion of sugar centrals for the most part along with the abaca trade. Its loans were characterized mostly by inadequate, even misleading collaterals and securities, with rampant misuse of loan proceeds. Political compadrazco as facilitator. The very epitome of our infamous present day “conflicts of interest” in banking--DOSRI, standing for ‘directors, officers, shareholders and related interests’--actually saw the beginnings of its immoral practical application in those days. 

(Not having taken Business Administration or Banking/Commerce in college, I wonder if the history of commerce and banking in the Philippines, even from the point of view of business ethics, is a classroom subject matter. PNB’s history is colorful in a very sad and shameful way.)

Criticisms were rife. They may have been unkind to onion-skinned “nationalists,” but history instructs that the commentaries were forthright and constructive. They ranged from “Filipinization at the cost of competence” (remember that boastful reference to “….a government run like hell by Filipinos, etc…”) to what an editorial of the Far Eastern Review of September 1923 had to say of PNB. The Filipino politicians “….. were like a child with a new toy. They laughed and cried over it, hugged it and kissed it, fondled it, rocked it to sleep and then woke it up and jumped on it, banged it with a club, ripped it open and pulled the stuffing out.” Ouch! But True!


It would indeed serve very well for patriotic Filipinos to always remember that, although excruciatingly painful, it still might be, we suffered, survived and recovered from the worst “bank heist” ever committed in this country. That unremittingly rapacious dictator, Ferdinand Marcos, orchestrated and caused the grandest of larcenies, smoke screened by Martial Law which he fancifully labelled as “constitutional authoritarianism.” Martial Law was the quintessential “bank heist.” All the Government Financial Institutions (GFIs) and the very Central Bank itself were used like piggy banks and ATMs! 

When the Marcoses were booted out and fled, they left the country’s economy in shambles. All the GFIs were either bankrupt and in the least, its coffers empty. The Central Bank of the Philippines had to be collapsed and reorganized into the present Bangko Sentral because it was mired in liabilities beyond recovery. 

READ: The uninterred mummified Marcos

Bysincere deft of Presidential decision-making, purity of intent against the direst of odds, along with the very smart choice of policy executors, it was President Corazon C. Aquino who presided over the revival of PNB, the Development Bank of the Philippines, Land Bank of the Philippines, a fact that is hardly even mentioned today. The revival and recovery of the country’s economic health and of its financial infrastructure comprise the irrefutable material legacy of Cory Aquino.

The remaining Marcoses, not a single one of them during their reign having rendered a single day of honest, gainful and selfless work, wallow in untold wealth, wantonly enjoying and shamelessly flaunting the evil fruits of Marcosian heist and thievery. How can a nation ever forgive, much less forget!

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