Government hikes UCPB stake to 97%

MANILA, Philippines — The government has increased its stake in United Coconut Planters Bank (UCPB) to 97 percent in order to strengthen the bank’s financial position, the Department of Finance (DOF) said yesterday.

In a statement, Finance Secretary Carlos Dominguez said the government’s majority stake in UCPB rose from 75 percent to 97 percent after the bank converted the P12 billion capital notes it issued to the Philippine Deposit Insurance Corp. (PDIC) into special preferred shares.

The capital notes were earlier issued as part of the agency’s financial assistance to UCPB for its recapitalization program, according to PDIC president Roberto Tan.

“The capital notes are convertible to special preferred shares and the PDIC has exercised this option, effectively increasing the government’s shareholdings in UCPB to 97 percent,” Tan said.

Dominguez, who also chairs the PDIC board of directors, said the increase of the state’s shareholdings in UCPB reaffirms the government’s commitment to support the bank.

He said this is in line with the government’s efforts to strengthen government financial institutions, including Land Bank of the Philippines, Development Bank of the Philippines (DBP) and the Overseas Filipino Bank (OFBank).

“The Duterte Administration has followed the policy of strengthening the capital bases and rationalizing the structures of all government-owned and -controlled banks, namely Landbank, DBP, OFBank and UCPB, with the objective of improving their level of service and value for their stakeholders, the Filipino people,” Dominguez said in a separate text message to reporters.

“This latest move of PDIC of converting the capital note it held to more permanent special preferred shares in UCPB is totally in line with the above objective,” he added.

Following the increase in shareholdings, Dominguez said the government expects UCPB to reprioritize its programs in support of farmers and other stakeholders who were affected by the coronavirus pandemic.

“We expect the board of UCPB to consider reorienting their focus on serving the farmers and processors of coconut and other vegetable oil products, but balancing their portfolio with exposure to other industries and clients in the middle market,” he said.

According to Dominguez, the remaining three percent shares in UCPB are currently held by various private sector individuals and entities.

Aside from PDIC’s infusion into UCPB, Tan said the Bureau of the Treasury (BTr) had also extended P30 billion in deposits to provide income support to the bank.

Last week, UCPB announced the appointment of former Landbank executive vice president for agriculture and development lending Liduvino Geron as the bank’s officer-in-charge effective July 2.

Geron’s assignment follows the resignation of Higinio Macadaeg Jr. as UCPB president and CEO on July 25, 2019.