BSP says text messages vs RCBC have no basis

The Bangko Sentral ng Pilipinas (BSP) issued a public warning yesterday against text messages urging bank depositors to take their money out of Yuchengco-owned Rizal Commercial Banking Corp. (RCBC).

The text messages have been circulating since last week, supposedly warning that RCBC was having financial troubles due to the collapse of Pacific Plans Inc., the pre-need company also owned by the Yuchengcos.

BSP Deputy Governor Amando Tetangco said the text messages have reached even central bank officials.

"BSP records show that RCBC has no outstanding loan or equity exposure in PPI," Tetangco said. "Therefore, rumors and text messages warning of financial problems at RCBC arising from PPI operations have no basis."

Despite having the same stockholders, bank regulators said it did not expect the problems of the PPI to spill over to RCBC, one of the biggest commercial banks in the country.

PPI had filed a petition for suspension of payments before a Makati court, saying that while it was still able to serve the maturing claims of its current plan holders, the company might not be able to sustain this in the future.

"RCBC and PPI may have common stockholders but RCBC has no exposure in PPI so we do not expect any spill-over," the BSP said earlier.

"The BSP calls on the public to be discerning and responsible in dealing with text messages," Tetangco said.

PPI said it might not be able to pay future since the government removed the 10 percent cap on tuition fee increases in 1990.

The company said in its statement that beneficiaries would get only tuition support. This meant that in non-exclusive schools, beneficiaries would get roughly the same amount they got in their last availment.

However, the company admitted that plan holders in exclusive schools would get much less than their last claim because their tuition was roughly double the tuition in non-exclusive schools.

PPI is estimated to have at least 34,000 plan holders, with roughly 16,000 filing educational claims for school year 2005-2006.

In its rehabilitation petition filed with a Makati regional trial court last week, the company said it had P341 million in cash for the current enrollment period. It said checks would be released starting April 14.