Posted on Monday, April 11, 2005

Old soldiers face new foe in Veterans Bank

By Luz Rimban, Philippine Center for  Investigative Journalism 

First of two parts

WHEN the country marked the 63rd anniversary of the Fall of Bataan on Saturday Charlie Beloso was home, strapped to a wheelchair, and probably just watching the event on TV. But he often relives in his mind the year 1942, when he was among the thousands of brave, young Filipinos who refused to accept defeat in the face of a brutal enemy.

Sixty-three years ago Beloso, a fresh college graduate, enlisted in the 62nd Infantry to fight the Japanese. When Bata­an fell, his unit retreated, but Beloso was ordered to return to Bukidnon to do intelligence work. He also took on a risky mission: to bomb his unit’s ammunition and food supply in Dalirig town to prevent it from falling into enemy hands.  

The mission was accomplished, but Beloso had to run for his life, dodging a hail of bullets from a .25-caliber machinegun that trailed his every step.

Now 87 years old and suffering a variety of illnesses, Beloso is still fighting. In the twilight of his years, he faces a slew of adversaries—old age, disability and what could be the most formidable foe he and other veterans have faced: a rich and powerful institution whose officials, the former soldiers and guerrillas say, have been committing abuses in the name of World War II veterans, many of whom are now impoverished.

That institution is the Philippine Veterans’ Bank (PVB), established by law as the repository of a $20-million trust fund for soldiers and guerrillas who fought the Japanese. Beloso and his fellow veterans say, however, that some bank officials have been plundering the bank for themselves and their cronies, leaving those who fought valiantly in World War II out in the cold. 

The veterans say rampant irregularities have gone on in the bank for decades. But the main object of these old soldiers’ campaign is the PVB director, Romeo Roxas, a lawyer and businessman who was recently in the news when a company he owned was accused of illegal logging in Quezon and Aurora provinces.  Roxas, Beloso and several other veterans say, is not even the son of a World War II veteran—a charge Roxas has denied. The PVB’s charter allows only veterans or their heirs to own stocks in the bank.

The charter also guarantees that all veterans, no matter their rank or assignment, would share equal status in the bank since no one can amass huge numbers of shares. Yet Roxas has managed to acquire at least 1.6 million shares, which now make him the bank’s only major stockholder.

The original law put a limit of 20 shares per veteran. Over the years, this has risen with the issuance of various stock dividends. In an examination report, the Bangko Sentral noted the bank’s ownership structure in 1998: “Ownership of the bank’s shares of stock are limited to veterans, widows, orphans or compulsory heirs of a veteran who can own not more than thirty-six [36] shares of stock.” By its 2001 examination report, the BSP was now saying, “Director Romeo G. Roxas is the only major stockholder owning 8.28 percent of the bank’s common shares.” Common shares give the stockholder voting rights in the bank.

Miguel Villa-Real, PVB assistant vice president for corporate communications, says that when the bank reopened in 1992 as a private corporation, it fell under the Corporation Code, General Banking Act and other related laws. “Under these laws, there are no limits as to what a single stockholder can own in terms of percentage share,” Villa-Real says. But the law that reopened the PVB recognizes and restores “the full force and legal effect” of the original charter.

At any rate, as the only major stockholder and director, Roxas holds sway over the affairs of the bank and the gold mine on which it sits. Besides the veterans’ trust fund, bank insiders say, the PVB handles deposits of government agencies like the Philippine Health Insurance Corp. (Phil­Health), and is a trustee for P2 billion belonging to the preneed company, College Assurance Plan (CAP), now reportedly on the brink of bankruptcy.

Roxas’ position in the bank has also enabled him to secure loans for his own companies as well as for other businessmen, veterans say. In January 2004, for instance, the PVB granted a P550-million loan to Metro Alliance Holdings and Equity, Inc., a firm whose majority owner is the Filipino Chinese businessman William Gatchalian.  Documents show that Metro Alliance failed to submit all the requirements needed to process its loan. At that time, too, another Gatchalian-owned company, Willex Plastics, had an unpaid loan from the PVB of P28 million. A small ordinary borrower with such a poor credit performance would have been immediately turned down.

The veterans believe Gatcha­lian got the loan through the help of Romeo Roxas. Listed as collateral in Gatchalian’s loan application is real estate property in “Laurel, Cavite” belonging to Roxas’ Green Square and Green Circle Properties. The loan remains unpaid to this day, a full year after it first fell due. 

Meanwhile, Roxas has availed himself of the DOSRI (directors, officers, stockholders and related interests) loans as a bank director, borrowing more than what was allowable under banking rules. In a report in 1998 the Bangko Sentral ng Pilipinas (BSP) found that Roxas’s Green Square Properties and Green Circle Property and Resources had outstanding loans with the PVB of P66.86 million. The BSP examiners said this “exceeded the ceiling for an individual loan to DOSRI.”

Roxas and PVB Chair Em­manuel de Ocampo are also stockholders of a firm called Green Dreams Holdings, which was granted a P35-million loan, although the veterans say the value of its collateral was “bloated.”

In a letter on February 16, 2000, then-PVB president B. Teodoro Eusebio himself had reported to President Joseph Estrada about the rampant violations of the BSP regulations being committed at the bank, including abuses made by directors like Roxas. 

Eusebio wrote that he had met twice with BSP Governor Rafael Buenaventura to map out a plan to save the bank. “Following [Buenaventura’s] advice,” he said in the letter, “I have informed bank officials concerned to retire or resign to forestall a scandalous dismissal by the BSP Monetary Board. The directors have been fined P34,500 each, and bank officials P69,000.” 

It seems the Monetary Board pressed on anyway. In a March 3, 2000, resolution, the Board required the PVB directors and officials to sign a memorandum of understanding with the BSP. A BSP examination report released in 2001 also said, “The MOU includes the assignment of BSP Resident Examiners at the Bank to Monitor PVB’s compliance with the MOU as well as check compliance with banking laws, rules and regulations, instructions issued by the Monetary Board, and observance of safe and sound banking practices.”

Such action, however, apparently failed to discourage Roxas from availing himself of another DOSRI loan. In March 2001 he borrowed P68.1 million from the PVB for his Green Square Properties.  When the loan became due a year later, it was transferred to sister company Green Circle, which agreed to assume the obligation.

But Villa-Real asserts in the bank’s “official replies” to PCIJ’s queries: “It is not true that Philippine Veterans Bank has given loans to Green Square Properties and Green Circle Properties. There are no outstanding loan balances from any of the said companies in our books.”  

The veterans know Roxas is an intimidating adversary. A graduate of the University of the Philippines College of Law, he is a member of the powerful and influential Sigma Rho Fraternity, whose members hold some of the most important positions in government. They include Ombudsman Simeon Marcelo, Senate President Franklin Drilon and Supreme Court Justice Antonio Carpio.

Besides his fraternity connections, Roxas has in the past boasted of support from the highest officials of the land.  Roxas says his projects in Quezon and Aurora have had the blessings of then-Presidents Fidel Ramos and Joseph Estrada, as well as the present chief executive, Gloria Arroyo.

But despite having what seems like an invincible enemy and fighting what may seem like a lost cause, concerned World War II veterans are not giving up, and are confronting their foe on various fronts, a tactic they had employed in the 1940s.

On March 26 another 87-year-old wheelchair-bound veteran sought Roxas’ disqualification from the bank in a suit filed with the Manila Regional Trial Court. The veteran, Auxencio Peña­randa, included in the case Roxas’s fellow PVB directors, who he says, are condoning Roxas’s actions.

Beloso himself has repeatedly written members of the House of Representatives and the Senate asking them to dig deeper into the alleged anomalies at the PVB. He has also filed plunder charges against PVB officials before the Office of the Ombudsman.

The Philippine Veterans’ Legion (PVL) officials have also written BSP Governor Buena­ventura, asking him and members of the Monetary Board “to disqualify Atty. Romeo Galo Roxas for the misrepresentation he made that enabled him to accumulate shares of stock of the bank that allows him substantial control over the affairs of the bank.” 

The veterans insist that Roxas has no right to own shares in the bank. Part of the PVB records is a thick listing drawn up in the 1960s of all soldiers and guerrillas whose service in the war was recognized by the Philippine and US governments. It took nearly six years, from 1963 to 1969, for the government to track down these veterans and award them or their heirs shares of stock.

Veterans say the name of Romeo Roxas’s father Santiago was not on that list. Neither is it in the files of the Office of the Adjutant General (OTAG) of the Armed Forces of the Philippines in Camp Aguinaldo, the agency with the complete veterans list. A certification signed by Lt. Col. Narciso Erna, assistant adjutant general, dated January 3, 2005, says there is no record in the OTAG of Santiago Galang Roxas, Romeo Roxas’s father. 

“If the records do not list my father as a veteran and not an original stockholder of the Bank, it does not erase the historical fact that he was, indeed, a veteran,” said Roxas in a January 31, 2005, letter to Francisco “Frank” Cedula, chair of the Philippine Veterans’ Legion. Roxas says his father was a food and supplies officer, under Col. Wendell Fertig in Misamis Oriental, during the war.  “The responsible course of action to then take,” said Roxas, “is to correct the records to conform to this unalterable fact.”

Veterans say it is not that the records of Roxas’ father are nonexistent. Rather, they say, it is that Roxas appropriated the name and stock certificate number of another Santiago Roxas who he now claims to be his father.

In the suit he filed before the Manila RTC, veteran Peñaranda said the person recognized by the PVB is Santiago Roxas born in 1921. During the war, this Santiago Roxas was a sergeant in the Manila Barrion’s Division, later issued Veteran’s Bank Stock Certificate 412604, and whose name appears on the Master List of veterans. But records show that this Santiago Roxas hails from Meycauayan, Bulacan, and was childless.

In the PVB database Romeo Roxas is listed as compulsory heir and holder of Common Stock 412604. Yet the veterans say his real father was born in 1899, was a former superintendent of the Bulacan School of Arts and Trades, and had 10 children, the ninth being Romeo.

In a letter sent to retired Judge Salvador de Guzman, who acts as PVL’s lawyer, Roxas says, “After the war, my father in 1947 went to Bulacan where he had an affair with another woman and thereafter kept a second family. Wary that he would be opening up himself to a charge of immorality for having an affair with another woman, he being a member of the civil service, he must have intentionally distorted his records in order to deflect this circumstance. This will explain the entry into the records of a Santiago Roxas from Mecaua­yan, Bulacan.”

“In any case,” he continues, “there are numerous instances where, due to clerical errors, the record of a veteran does not reflect his real and true circumstance and situation.”

But the veterans are puzzled that Roxas claimed veteran status for his father only years after the PVB came into being, and long after the bank had closed and then reopened.  Roxas and his siblings never appeared on the scene before 1990, when he was hired to help with the bank’s rehabilitation. Only in 1993 when the PVB reopened, and Roxas was already connected with the bank, did he begin saying he was a veteran’s son.

The veterans have argued as well that the hiring of Roxas for P43 million in 1990 was illegal, because the PVB was still closed at the time and had no legal personality to hire anyone. At a meeting of the House Committee on Veterans Affairs, Roxas explained, “It was not the bank who really retained my services. It was the Veterans Federation in their desire to reopen the bank. And I advanced all the expenses, Mr. Chairman, you know, necessary for the re-opening of the bank. For the record and all the veterans will affirm that. I was the one who financed the reopening single-handedly of the bank.”

But a memorandum of agreement obtained by the PCIJ shows that de Ocampo had contracted Roxas in behalf of the bank. De Ocampo himself has also said that what financed the reopening of the bank was PVB’s P750 million in cash and assets that were taken over by the BSP in 1985. Said the PVB chair in a 2002 Senate hearing: “Before the bank closed, Your Honor, there was so much money deposited with the central bank and this was part of the money that earned interest so that there was now more than one billion to the credit of the Veterans’ Bank. That is where we got the P750 million.”

Indeed, despite its problematic history, the PVB continues to be flush with money. Aside from earnings that are supposed to benefit veterans, it also holds deposits of the national government and local government units. When the bank shut down in 1985, the national treasury still had some P1.4 billion in deposits with it. Sen. Aquilino Pimentel has also said Cagayan de Oro had deposits with the bank that have yet to be accounted for.

Yet should the allegations of the veterans turn out to be true and Roxas is revealed as being a bogus soldier’s son, it may be a case of history repeating itself. In his book Booty Capitalism: The Politics of Banking in the Philippines, Paul Hutchcroft writes that the Veterans’ Bank “had most of its shares ‘held in trust’ by the veteran with all the bogus medals, Ferdinand Marcos.”

To be continued  

Part 2 |