Paeng urges new PNB audit

Bangko Sentral ng Pilipinas Gov. Rafael B. Buenaventura urged the Philippine National Bank yesterday to conduct a new audit of its finance following reports that PNB has rejected the finding of an audit report conducted by Prince Waterhouse Coopers (PWC) up to 1998.

There had been some reports that PNB is questioning the adverse audit report specifically the bank's high non-performing loan levels.

PNB president Feliciano L. Miranda denied in a press statement yesterday that they had accepted the PWC's audit report.

Miranda said there are still ongoing discussions with PWC on the differences between the country's accounting principles and international accounting standards.

Miranda explained that while the books of accounts of PNB are prepared in accordance with the Philippines generally accepted accounting principles, the audit report to be released by PWC is based on US standards.

Miranda said that the level of NPLs of PNB which stated at 29 percent , not 40 percent, as of Dec. 21, 1999 was mainly due to the effects of the 1997 regional foreign currency crisis.

The stock rights issue of the bank in 1999 wherein P9 billion in new capital was infused was intended specifically to provide a buffer to cover provisions in these NPLs.

Miranda said that improvement of the bank's loan portfolio quality has been the new management's priority and programs have been implemented in tightening the credit process while intensive collection of past due accounts is being undertaken.

On its non-performing assets, Miranda said the new management has identified the problem areas and aggressive corrective measures are being undertaken.

PNB director Benjamin Palma-Gil suggested that a new audit be conducted as the result of the PWC audit is already obsolete.

Buenaventura agreed that Miranda should commission a new audit covering the period 1998 to January 2000 to pinpoint who is accountable for the banks' NPLs. He pointed out that PNB's level of bad is more than twice the industry average and that the results of an updated audit is needed by the public before the bank is privatized.