PHILIPPINE CENTRAL BANKER FACES CORRUPTION CHARGES
A government-appointed special
prosecutor has ordered the filing of corruption charges over
the closure of a private bank against Philippine central bank
governor Jose Fernandez, who said he would contest the charges.
    Ombudsman Raul Gonzalez told Reuters there was evidence to
indicate that Fernandez had misused his office in ordering the
closure of <Pacific Banking Corp> in July, 1985.
    He said the charges against Fernandez would be filed "within
the week" in a special court for corruption cases, adding that a
defendant could appeal against a ruling in the Supreme Court.
    Fernandez is in New York for talks with the Philippines'
creditor banks on rescheduling about 9.4 billion dlrs of the
country's foreign debt.
    A central bank statement quoted Fernandez as saying Pacific
Bank's closure and sale were in accordance with law.
    "Fernandez said that some points may have been missed in the
appreciation of the case for which reason he will be filing a
motion for reconsideration of the (Ombudsman's) resolution," the
statement said.
    Central bank sources said the statement was drafted after
Fernandez and senior deputy governor Gabriel Singson, who is in
Manila, conferred on the telephone.
    Gonzalez said his office ordered the charges filed after
hearing submissions by Fernandez and plaintiff Paula Paug, the
president of Pacific Bank's Employees Union.
    In her complaint, Paug said Fernandez had acted arbitrarily
in ordering the closure of Pacific Bank and placing it under
receivership without giving the bank the right to appeal,
throwing hundreds of employees out of work.
    Paug also said Fernandez had not withdrawn his stockholding
in Far East Bank and Trust Company, which took over Pacific
Bank's assets, when he became central bank governor in January,
1984. Fernandez founded Far East in 1960.
    She alleged Fernandez had misused his position by
appointing two Far East bank executives to central bank
consultancies, giving them access to Pacific Bank records. She
also disputed Fernandez' interpretation of Pacific's accounts
from January 1980 to May 1985, claiming the bank had made a
profit, not a loss.
    The central bank statement quoted Fernandez as stressing
that Pacific Bank was "repeatedly given notice of the continuing
losses of the bank and the immediate need of putting up
additional capital to eliminate insolvency."
    It said the central bank tried to assist in a bid by Bank
of Hawaii and Philippine sugar trader Antonio Chan to purchase
Pacific Bank, but the negotiations collapsed "because of certain
legal impediments."
    The statement said the central bank invited several banks
to submit offers for Pacific, and the sale to Far East was
approved by the Monetary Board and not by Fernandez alone.
    Fernandez was also quoted in the statement as saying he had
divested himself of all interests in Far East Bank when he
became central bank governor. A Far East Bank spokesman
declined comment on the charges against Fernandez.
    In a footnote to a 12-page resolution recommending
prosecution against Fernandez, Gonzalez said prima facie
evidence of misuse of power also existed against all the then
members of the country's Monetary Board, as well as the Far
East executives, and ordered their investigation.
    He said Fernandez's action fitted in with the political
climate during former President Ferdinand Marcos's final years.
    "(The) prevailing mood of the day for those in high offices
was either to imitate the penchant of then President Marcos and
his wife, to run roughshod over the human rights of citizens
... Or to follow blindly or with canine devotion any
instructions from above," Gonzalez wrote.
    Gonzalez, named to his post 11 months ago, said his office
had received more than 4,000 complaints of misuse of power. He
said among those facing prosecution were five provincial
governors appointed by President Corazon Aquino.
 REUTER
