PNB proposes to pay BSP loan via dacion en pago, restructuring

Philippine National Bank (PNB) wants to pay P10 billion of its P15-billion loan from the Bangko Sentral ng Pilipinas (BSP) through a combination of dacion en pago or payment-in-kind and a restructuring of the balance of P5 billion.

Feliciano Miranda, PNB president, said the bank’s proposed payment scheme is incorporated in its proposed rehabilitation plan submitted to the BSP.

BSP Governor Rafael Buenaventura said, however, the central bank is putting at bay any decision on PNB’s proposed rehabilitation plan pending the review of the Arroyo administration.

We would like to give the new Secretary of Finance (Alberto Romulo) the chance to review the rehabilitation plan since he is also a member of the Monetary Board and is chairman of the Philippine Deposit Insurance Corp. which also loaned to PNB," Buenaventura said.

Miranda said that under the dacion en pago arrangement, PNB is offering the PNB Financial Center in Pasay City for a minimum of P8 billion, and other prime properties which have not yet been identified.

On the other hand, the remaining P5 billion will be restructured and settled over a period of eight years.

PNB has been trying to work out an agreement with the BSP to give up real estate worth P20 billion. PNB currently has about P22 billion in foreclosed real estate which are mostly booked under its real and other properties owned or acquired account or ROPOA.

The PNB, saddled with debts, reportedly wants to settle most of its liabilities using the dacion en pago arrangement.

Earlier, a BSP official said the central bank also wants PNB to subject the dacion en pago to a five- to 10-year buyback plan, this will relieve the bank of non-earning assets so that it can go back to being profitable. – Rocel Felix