United Coconut Planters Bank said Monday the Supreme Court’s lifting of a temporary restraining order against its privatization will be beneficial to the bank and its clients.
Finance Secretary Carlos Dominguez III said over the weekend the government would soon resume the bank’s privatization through a recapitalization program and sale of the government’s majority stake in the bank.
“This will definitely redound to the benefit of UCPB and its clients as this will strengthen the bank’s capital and generate more resources to improve its competitive position in the market,” the bank said in a statement.
“We will be coordinating closely with the DoF for their next steps, and will provide updates to all our stakeholders as we do so. We would like to assure our clients that it is business as usual for the bank while we go through each phase of this much-awaited recapitalization program, and that they can look forward to a better and stronger UCPB,” it said.
Dominguez said the government was not keen on giving additional support to UCPB once its capital program expired on Dec. 31, 2018.
“We are not inclined to have it [extended]… I told them we are not planning to extend it, so that gives us our own internal deadline… It must be either sold or not sold,” Dominguez said.
Dominguez said the government was privatizing all its assets and speeding up the process. Among these assets are UCPB, state-run Philippine Amusement and Gaming Corp. and the controversial Mile Long property in Makati City.
A number of commercial banks expressed interest to acquire UCPB when news of its privatization broke out.
UCPB was placed under the supervision of the Governance Commission for Government-Owned and Controlled Corporation in March 2016.
The Supreme Court issued the TRO on June 30, 2016, setting aside Executive Orders 179 and 180 signed by President Benigno Aquino III in March 2015. The Aquino directives ordered the UCPB privatization and the reconveyance to the government of about P74.3 billion in coco levy funds.
The SC issued the TRO in response to a petition filed by the Confederation of Coconut Farmers’ Organizations of the Philippines Inc., which alleged the privatization would deny the coconut farmers of their right over the coco levy funds.
UCPB was originally under the supervision of the Presidential Commission on Good Government when the agency was still litigating cases involving the bank. Aquino approved the privatization of UCPB following the Supreme Court’s Jan. 24, 2012 ruling that effectively made the bank a GOCC.
Proceeds from the UCPB sale under Executive Order No. 179 would be used by the government for the benefit of the coconut farmers.
GCG said until the privatization was implemented, UCPB would remain a GOCC that should comply with the corporate governance requirements.
The Supreme Court lifted the temporary restraining order this month. In a 21-page decision, the SC said it lifted the TRO it issued on June 30, 2015, alongside the voiding of four sections of the Guidelines for Utilization of Coco Levy Funds.