Whitewash,

substitution of T- bills by PNBRepublic Bank and purchased by the Overseas Workers Welfare Administration (OWWA), which happened before the Bancap scam broke out.

A Commission on Audit (CoA) report as of end-May 1994 shows PNB-Republic Bank had P69 million worth of undelivered T-bills from Planters Development Bank as of April and was not able to deliver P56 million to OWWA. If the CoA had just looked deeper into the matter, it would have found out these involved transactions brokered by Bancap.

A highly reliable source privy to the claims settlement said the amount undelivered to OWWA was actually P62 million, of which P56 million was supposed to have been delivered by Insular Investment and Trust Co. to PNB-Republic Bank, and the remaining P6 million by PlantersBank to PNB-Republic Bank. In between the transactions, Bancap was supposed to handle the physical delivery. The P6-million non-delivery was not included in the CoA report.

The source said then OWWA Administrator David Corpin even went to the PNB- Republic Bank office after he discovered that Bancap had closed down, demanding delivery on the P56 million. The bank allegedly substituted the bills with longer maturities from its own vaults.

As for the rest of the P6 million, the source said these were physically delivered from PlantersBank to the Bancap office. Since Bancap was still waiting for Insular to deliver the other P56 million to complete the transaction with OWWA, “what actually happened was naabutan na ng pagsara ng Bancap. But these should have been in Bancap’s vault.”

The mystery surrounding the missing P6- million T- bills reportedly sent NBI agents on a manhunt. Since these bills were “bearer’s certificates,” whoever is in possession can claim ownership over them. A Bancap employee who spoke on condition of anonymity told BusinessWorld a Bancap messenger was instructed to deliver the T-bills to PNBRepublic Bank.

She said the NBI later “subpoenaed” several Bancap employees over the missing T-bills and placed the messenger on a lie detector test. When the messenger reportedly failed the test, the NBI “placed him under surveillance.”

BusinessWorld checked out the address given by the messenger to the NBI and was told by practically the entire barangay that no such person ever lived there. Past records from the barangay chairman bear this out. The messenger was spotted registering brandnew passenger vehicles at the Land Transportation Off ice just recently. Whatever happened to the NBI manhunt?

More than one man’s alleged “luck,” what prosecutors should look into is the possible culpability of the OWWA and other government agencies. While mandated to course their transactions only with state- owned banks, government agencies and corporations went around the prohibition by directing their state- owned depository banks to purchase Tbills from even unlicensed brokers like Bancap. By going through these hassles, however, Bancap was reportedly paying off generous “kickbacks.”

The conf i d e n t i a l dossier fed to Malacañang reveals investment officers of a certain state agency were receiving “kickbacks” from Bancap ranging from P50,000 to P70,000 per transaction. The Bancap employee said Bancap’s transactions were normally coursed through PNB-Republic Bank and, only recently, through the AlAmanah Investment Bank of the Philippines. The CoA report as of end-May 1994 shows only two government agencies coursed their T- bill purchases from the two banks, namely the Philippine Ports Authority and the Local Water Utilities Administration.

But the P2.3-billion Question of the Year should be asked of the Bangko Sentral.

An NBI source said the Bangko Sentral has turned out to be the prosecution’s biggest stumbling block. Even in court proceedings on the estafa case lodged by the government against Bancap off icers, Bangko Sentral’s lawyers tried to quash efforts of the defense to have the Bangko Sentral’s audit reports on Bank of Commerce from 1991 to 1993 subpoenaed by the court; the central bank’s counsels said these were already “irrelevant to the case.” Former Solicitor General Francisco Chavez, defense counsel for Bancap trader Vicky Magalona, said the audit reports should show if the Bangko Sentral already knew about Bancommerce’s dealings with Bancap as early as 1991.

To all these, Bangko Sentral Governor Gabriel C. Singson has but one line of defense: Republic Act No. 1405, or the Secrecy Law on deposits and investments in government securities. Even with all the powers infused into the newly-created central monetary authority, it does not have the teeth to force banks to pry open their deposit and investment accounts — not even for the purpose of establishing the existence of fraud. Under the Bangko Sentral’s new charter, the provision showing the Achilles’ heel of the country’s highest monetary policy-making body states: “Presidential Decree No. 1792 is likewise repealed.” Presidential Decree No. 1792 bars anyone, including central bank examiners, to examine deposits and T- bill investments except “after being satisfied that there is reasonable ground to believe that a bank fraud or serious irregularity has been or is being committed.”

In an interview, Mr. Singson said “It was deliberate on the part of the Senate (to insert the transitory provision). It’s very specific. They want to control the powers of the central bank.”

Yet, Mr. Singson vehemently denied observations that the provision has virtually rendered the Bangko Sentral toothless. “You