CLARK FREEPORT—Hundreds of depositors of Philippine Veterans Bank here queued until 10 p.m. on May 4, their lines extending down the road across the business headquarters of the state-owned Clark Development Corp. (CDC).
When the branch closed transactions before midnight, about P500 million had been withdrawn, according to Miguel Angelo Villa-Real, Veterans Bank vice president for corporate communications.
“We allowed the transactions to go past regular banking hours to avoid panic and to prove we have the cash,” Villa-Real said on Wednesday when the mass withdrawals finally stopped.
“That’s the way to say we are a stable bank. We are very liquid. We have cash and cash equivalents not tied to real property items,” he said.
Last week’s panic withdrawals arose from reports circulated by local media that CDC had terminated its time deposit at the bank. Some depositors interpreted the reports to mean the bank had stopped accepting government accounts.
Eduardo Oban Jr., CDC chair and acting president, confirmed the state agency withdrew P300 million, but for a valid reason: to pay dividends to the Bases Conversion and Development Authority (BCDA) and national treasury for 2009, 2010 and 2011.
CDC is a subsidiary of the Bases Group of Companies, which is owned by BCDA, the administrator of all former American bases.
Villa-Real said Veterans Bank was either a victim of misinformation or of overvigilance by a public jittery over the specter of bank closures.
He said the rumors quickly spread via social networking sites and text messages.
One rumor said that Oban, former chief of the Armed Forces of the Philippines, had closed CDC’s accounts at Veterans Bank in retaliation for additional requirements the bank had supposedly imposed on his loan application.
“I don’t have any pending loan with Veterans Bank so there is no truth that I was angry. As a matter of fact I don’t know how to get angry,” said Oban, assuring CDC is keeping Veterans Bank as a depository bank.
Villa-Real confirmed Oban’s statement, saying it was Clark International Airport Corp. that took out a P327-million loan for its terminal expansion project.
He said Veterans Bank is still authorized by law to accept government accounts. He said 70 percent of its P44-billion current total deposits are government funds.
The long lines at the bank last week were “a normal course of the business,” he said, adding that the queues were lengthy because CDC employees decided to withdraw half of their 13th month pay on May 4, further stoking the panic.
But Veterans Bank has P5.5 billion in capital stocks, and P57.3 billion in assets, which it has accumulated since it reopened as a private bank in 1992, Villa-Real said.