The World Bank has agreed to release the second tranche of the Bank Sector Reform Loan (BSRL) following the agreement between the National Government and business tycoon Lucio Tan to sell their shares in Philippine National Bank (PNB) as a block, Finance Undersecretary Joel Bañares said yesterday.
He clarified that the "actual sale of PNB is not the conditionality for the release of the second tranche, but rather the move toward privatization of the former government financial institution."
With an agreement to sell as a block, Bañares said, the World Bank has indicated that the second tranche amounting to $100 million could be released before June this year.
The World Bank had purposely delayed the release of the second trance following a controversy on who now controls PNB. It also wanted clarification on how Tan was able to acquire his stake in PNB.
PNB's privatization became controversial in the past few months following the sudden takeover by Tan of the PNB board.
This also prompted the World Bank to seek an explanation from the government to ensure that no banking rules and regulations were broken.
The controversy was an audit report by Pricewaterhouse Coopers which placed PNB's finances in a bad light.
Sources, however, said the Pricewaterhouse audit was conducted using a different accounting principle compared to the standard being used in the Philippines.
They said PNB management appears unwilling to accept the Price Waterhouse audit report.
According to Banares, the World Bank has reportedly been given a copy of the Pricewaterhouse audit even as the government is commissioning SGV to conduct another audit with the help of the Bangko Sentral ng Pilipinas.
An audit is necessary to determine the price valuation of PNB shares. -