RP's biggest banks

BusinessWorld published its "Fourth Quarter Bangking Report" yesterday. From the tables, here are the country's biggest commercial banks in terms of total assets as of end-2007. Column 2 is assets in Q4 '07 while column 3 is change from Q3 '07. All figures in P Billion:

1. Metrobank, 706.89; 41.94
2. BDO-EPCI, 621.30; 12.84
3. BPI, 617.00; 64.03
4. LBP, 382.50; 10.99
5. DBP, 241.16; -3.00
6. PNB, 240.16; 6.40
7. RCBC, 238.88; 12.52
8. Citibank, 211.43; 7.68
9. UBP, 186.71; 15.59
10. Chinabank, 174.90; 16.24
11. Alliedbank, 141.70; -1.96
12. Securitybank, 129.36; 4.54

The merger of BDO with EPCI bank resulted in the sudden jump of BDO into the #2 spot. The increase from Q3 level was not that impressive compared to the growth in assets of Metrobank and BPI. Possibly some transactional glitches as the systems of the 2 merged banks have to be reconciled and standardised.

It will not take long for BDO to overtake Metrobank in the #1 spot; if not this year, possibly next year. BDO is the only bank in the country where some branches, especially those in SM malls, are open 7 days a week, and up to 7pm per day! The volume of financial transactions on weekends and up to 7pm are huge.

Government banks LBP and DBP are like "saling-pusa" (cat play) since those government banks do not operate in a really competitive environment, but in secured and protected markets, like the fortnightly salaries of the national government's more than 1 million employees, not to mention depositories by LGUs.

If these government banks are privatised, that will really make the domestic banking system more competitive. The "directors" of those banks are often cronies and political appointees of the President and other high government officials. Some of those directors have no background whatsoever in banking, but because they praised endless "halleluiah" to the appointing officials, they have become bank "directors" from out of the blue.

Accidental heroes and resident evils

One of my favorite thinkers of the last century was Friedrich Hayek, an Austrian economist and later turned to write political philosophies. In his book, The Constitution of Liberty, Chapter 2, “The creative powers of a free civilization", he wrote:

"Liberty is essential in order to leave room for the unforeseeable and unpredictable. Because every individual knows so little that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it."

When large-scale robbery and corruption in government happens, or was planned to happen, usually a large cast of individuals from various government agencies and institutions have to be involved. When all those involved will either cooperate all the way to the distribution of spoils, or not take part in such distribution but were cowed by some threats or coercion to spill the beans, the robbery will be successful. Whether it will be uncovered sooner or later is another story.

When a consultant of the already approved, later aborted, government’s broadband (the NBN) project was about to spill some beans in an investigation by another government institution, the Senate, that consultant was abducted by some people from other institutions of the state, namely the military, the airport authority, and the police. The goal of such abduction was simple and direct – deprive the potential party spoiler of any liberty to spill any beans, prevent any unforeseeable and unpredictable twists that will endanger those who planned the robbery. The masterminds of the abduction can choose whether to use threats and coercion, or another set of bribery and corruption, or by physical liquidation.

After the abductors were forced by circumstances to abort their plan, and the soon party-spoiler has to be freed, Murphy’s law took its toll: what could go wrong indeed went wrong. At least to those who committed or planned to commit the large-scale robbery.

And so during the series of Senate investigations and media interviews, the beans spilled all over, and cans and drums of worms were uncovered. The unforeseeable were seen and the unpredictable were deprived of mysteries. An accidental hero was born, and a band of lesser-known heroes who protect the main hero from harm is formed. Meanwhile, resident evils were slowly named and were further publicly confirmed as such, pure evils. And more people are getting disappointed with government, even getting angrier.

What to do with the resident evils? It is in the nature of devils and witches to employ all sorts of tricks and treachery to picture themselves as angels and saviors, not as robbers and devils. After all, they have political power in their hands, hundreds of billions of pesos of tax money at their control, and a long line-up of bribable lesser evils who are more than willing to sing “Halleluiah to the angels and saviors” if the price is right.

Hayek is correct. Individual freedom and liberty is capable of unleashing an unpredictable but built-in power and energy from individuals to attain human progress. Heroes are too many to be named, but a main hero can accidentally emerge.

And finally, the head of all resident evils should resign. This is to protect society from falling into a deep spiral of bribery-protection-silence-bribery, because the moral and fiscal cost of such spiral will certainly be very big.

What if the head of resident evils will not resign and put some end-game to the spiral? I don’t think another “People Power” will be the solution. The people should instead pressure other government institutions to do their job, so that they will win back public trust and confidence for those institutions.