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A Competent And Decent Banker

September 24, 2008 Leave a comment Go to comments

A Competent And Decent Banker
Ronald Roy  — September 24, 2008

       The US dollar started to dramatically lose vitality in the second week of September until, on Friday the 12th, it sank against the euro which rose to US$1.4299 from US$1.4215 in New York.  The pound rose against the greenback to US$1.8052 from US$1.7937.  The US currency fell to 105.69 yen from 107.92 the same day.  On Monday the 15th, Asean and European stock markets plunged amid a growing alarm following the collapse of a bankrupt Lehman Brothers and the start of negotiations for the sale of Merill Lynch to Bank of America.

       When someone in a packed theater screams “fire!” it is mass hysteria that can cause deaths and injuries to countless moviegoers.  It is the survival instinct that triggers the panic, and the resulting destruction comes as a matter of course. Unlike in this scenario, however, there is ample time to arrest or abate a financial crisis among regions and nations, as initially exemplified by the US Federal Reserve, European Central Bank and Bank of England which infused wobbly money markets with tens of billions of dollars. Worldwide, other central banks would follow suit in a planned freeze of the meltdown. It remains to be seen, however, how much time will be needed to normalize the situation affecting the Philippines in particular, in the face of Dubya Bush’s inflationary seven hundred billion dollars worth of a bailout plan for the world.

       To be sure, the needed transfusion by financial angels into the blood streams of weakened markets consists principally of loans which should be so packaged as to give the borrowers the breather they need for revitalization and the leverage for repayment.  But it won’t be easy.  Existing laws and banking policies may have to undergo revisions to lynchpin fresh strategies and reforms, and stay attuned to a renegotiated regimen of mutual arrangements within the same regions.  A stronger regional culture of synergy must now be forged within and between regions.

       So also must now attitudes be adopted by people such as in consumption, spending priorities, investments, savings, etcetera. Again, in lending and borrowing, systems must be adjusted to insure that borrowers are adequately funded for their needs, and loans are paid back.  The culture of graft must be eradicated once and for all, heck, not just moderated!  Thirty-percent kickbacks render nugatory the reasons for which the loans are acquired.  The loans will not be repaid, the lending institution will end up with non-performing assets, and socio-economic growth will move at snail’s pace.  Is it any wonder we are the laggards in development after Bangladesh? I’ve always believed in leadership by example.  If they are crooks up there, then most of their followers, bureaucrats included, are crooks down the ladder.

       So, what was Gloria Arroyo saying about our bouncing back from the canvass after an initial knockdown for a full recovery while strong countries like France, Japan and China were just beginning to flounder?  We can salute her economic managers for remaining calm and allaying public fears, even if that’s routine.  But Gloria’s incredibly preposterous knee-jerk prognosis is a boring reminder she’s a liar who takes us for fools with her stupid ramdam-na-ramdam-ang-kaunlaran slogan amidst all sorts of crises. 

*                                   *                                   *

       If you have seen the beauteous Thai actress playing opposite Nicolas Cage in his current cinema thriller, that’s what former Development Bank of the Philippines (DBP) President Remedios Macalincag looks like.  Put backbone into the bundle of brains and beauty, and you’ve got a package called “Mrs. Mac”, the name called her by the rank and file.  In December, 1979, when I was a newly appointed Land Bank Board member, I met the wife of Victor Macalincag, then Deputy Minister of Finance. 

       When the board designated me as  chair of an ad hoc committee to monitor past due loans, I asked Remy, the bank’s best vice president for commercial banking operations, to help me navigate the committee through the intricate pathways of credit, collateral, character, mortgages, restructuring, foreclosures, etc. Surprisingly, like a lawyer, she displayed a smart sense for spotting indicia of possible collusions between defaulting borrowers and bank personnel.

       I learned a great technical lot from Remy, but it was her spiritual side that touched me most and her co-workers: her readiness to resign whenever pressured to yield to political accommodations endorsed by the powers that be.  That’s what I call backbone.  Remy’s backbone has hardly had anything to do with the Accounting and Economics degrees she earned in Manchester University, England, but rather, “with the blessed lessons we all learn from our parents, elders and teachers since kindergarten.” Touchè, Remy!

       Backbone, the uncompromising bullheadedness to uphold one’s integrity, brought Remy to leave Land Bank in 1988 on an Early Retirement Incentive Plan.  Newly elected President Joseph E. Estrada brought her back to the service by appointing her the first ever woman prexy of the DBP, a position she predictably vacated during the succeeding Arroyo regime.  Today, she feels liberated from the toxic air of banking corruption, if only because she cannot now be judged by association as a functionary of a graft-ridden Arroyo administration.  Over the weekend, Remedios Macalincag was one of 41 respondents I “surveyed” by cell phone.

       On the budget insertion issue, my query was: Whom are you sympathetic to, Sen. Alan Cayetano or Sen. Ping Lacson?  Well, only eight were sympathetic to Cayetano, while 33 sided with Lacson.  The respondents weren’t asked to explain, but those who did almost invariably described Alan as too feisty, immature, or inexplicably “pro-administration” – a far cry from his hero days – and Ping as a composed and resolute fighter of graft.  Being what she is, Remy expectedly gave her nod to Ping the crime-buster.  At the same time, however, she stressed she was happy Senate President Manny Villar would get a chance to clear his name because she had always known the Villars as competent and decent people.  And I have always know you, Remy, as a competent and decent banker.

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