After more than three years of negotiation, the Philippine Deposit Insurance Corporation (PDIC) finally turned over the closed Cooperative Rural Bank of Misamis Occidental, Inc. to its new investors led by FICCO in a ceremony held at the PDIC head Office in Makati City on 8 January 2007. The physical turnover took place a week later right in the bank’s office in Oroquieta City.
PDIC Acting President Michael A. Osmeña presided over the turnover ceremony. In his speech, he emphasized the commitment of the government through the PDIC to help strengthen the confidence of the public in the banking system and promote the best interests of the rural economy. He further said that any bank rehabilitation is guided by the principle of reasonable burden shared by the bank’s stockholders, strategic investors, depositors, creditors, and government.
Mr. Roy Dino Tenaja and Atty. Isidro Lico, Chair and Vice-Chair of the rehabilitated bank’s interim board of directors, accepted the responsibility. Bangko Sentral ng Pilipinas (BSP) Managing Director Ma. Corazon Guerrero and CDA officials led by Chair Lecira Juarez were also present in the ceremony.
The BSP Monetary Board ordered the closure of the Cooperative Bank of Misamis Occidental on 20 February 2003, when it found out that the bank’s capital deficiency was critical. Facilitated by then Northern Mindanao Cooperative Development Authority Regional Director Ms. Manuela Pelaez, the talks for the rehabilitation of the bank came about a month after its closure. Consequently, nine (9) new investors showed interest in rehabilitating the bank and pledged to infuse the needed fresh capital of P12.41 million.
The bulk of new investment came from FICCO, which contributed more than P9 million, or 70% of the fresh capital. Cooperative Bank of Misamis Oriental put in P1 million. The rest of the new equity came from DMPI Credit Cooperative, DMPI Consumer Cooperative, Del Monte Employees Agrarian Reform Beneficiaries Cooperative, Philippine Federation of Credit Cooperatives, Oro Integrated Cooperative, Paglaum Multipurpose Cooperative, and Clarin National High School FMPC. Moreover, some 40 individual depositors of the bank agreed to convert their uninsured deposits of P8.75 million into equity.
The BSP Monetary Board, upon recommendation by the PDIC, approved the rehabilitation of the bank on 26 August 2004 with certain conditions. Among others, the conditions included amendment of the bank’s Articles of Cooperation and By-laws, conversion of the uninsured deposits of individuals into non-redeemable and non-cumulative preferred stocks, and conversion of bills payable to Cooperative Development Authority into equity. The Monetary Board also required FICCO to limit its shares to 40% of the subscribed capital and asked other investors to subscribe the excess capital it contributed.
The vital amendments to the bank’s Article of Cooperation and By-laws included the increase of authorize capital from P10 million to P100 million and change of name from Cooperative Rural Bank of Misamis Occidental, Inc. to Misamis Occidental Cooperative Bank. However, the proposal to amend the bank’s area of operation to cover entire Mindanao did not receive a nod from the authorities.
The investors also settled the receivership expenses incurred by PDIC as of 30 September 2006, subject to adjustments later. PDIC is the government agency that takes over the banks closed by the BSP Monetary Board.
Now known as Misamis Occidental Cooperative Bank, the bank is the first rehabilitated cooperative bank in the Philippine banking history. The country used to have more than 50 cooperative banks operating in various provinces. Now, it has only about 40 and most of them lack the resources needed to compete with the bigger players in the banking sector. At the instance of the government, the first cooperative banks came into being almost three decades ago with pre-cooperative associations known as samahang nayon as stockholders. Almost all of these associations are now inoperative.
Meanwhile, the renovation of the bank’s building and other facilities is now underway. The bank will start its operation on 16 April 2007. Its board has recently appointed Maria Lucy Cabalit, a former bank employee and a FICCO member, as the bank’s manager. A resident of Ozamis City, Ms. Cabalit is familiar with Misamis Occidental and its neighboring provinces.
See also a PDIC publish Article. Click Here
