BSP charges Celso delos Angeles with 1 billion syndicated estafa

The Bangko Sentral ng Pilipinas (BSP) just filed a 1 billion peso syndicated estafa charge against Legacy owner Celso "Boy Sese" delos Angeles. So, are we, the People, especially those 130,000 depositors scammed by this financial artist, satisfied with this?

No. Celso should be made to account for the 14 billion pesos he reportedly got from those double your money schemes he devised to scam people out of their shirts.

The BSP should modify their charge to 14 billion pesos syndicated estafa, instead of 1 billion.

Likewise, the warrant of arrest for Celso should be accomplished in haste, so that he'll not bail himself out of this one.

Celso's accomplices should also be summarily executed, err, arrested, especially officials of Dynamic Bank, particularly those involved in the marketing of this highly anomalous double your money scheme. According to reports, Dynamic Bank had the biggest exposure and the biggest take of deposits amounting to about 2.5 billion, so the officers of this bank should be charged and jailed with Boy Sese too.

A Manila Times report says that Sese operated one of the biggest syndicates in the Philippines. He heads this ruthless syndicate with impunity and even has the capability to kill their detractors.

The State should match their firepower with more lethal force. If Celso and the rest of those who scammed the Filipino People of 14 billion pesos resist arrest, the State should very well give them what's due to them immediately.

Yet, I doubt it if we'll see Boy Sese behind bars. Will Speaker Nograles allow his bosom buddy to spend time in jail?

The next chapter of this episode is predictable---Celso delos Angeles will escape the long-arm of the law and like Joc-Joc Bolante before, will try to seek refuge in the United States or Timbuktu. He'll probably enjoy his billions there, in the comforts of a villa.

Celso delos Angeles siphoned billions, says BSP

This is why 140,000 depositors are now suffering, due to the criminal acts of Mr. Celso delos Angeles, owner of Legacy banks and now lives off his life with billions stashed in other banks.

"Legacy owner siphoned billions, says BSP"
By Gil C. Cabacungan Jr.Philippine Daily InquirerFirst Posted 23:47:00 02/23/2009Filed Under: Banking, Financially Distressed Companies

The central bank, Bangko Sentral n Pilipinas (BSP), Monday accused Celso de los Angeles Jr., founder of the Legacy group, of siphoning billions of pesos in deposits from 12 now-shuttered rural banks of the group through fictitious loans, ghost motorcycle and car sales, and overpriced properties.

BSP supervision and examination department head Chuchi Fonacier told members of the House committee on banks and financial intermediaries how De los Angeles eluded regulators by juggling funds between the rural banks and non-bank companies and how he ran the Legacy group through dummy nominees and trusted lieutenants in key management positions.

“From day one, Celso de los Angeles had intended to have PDIC [Philippine Deposit Insurance Corp.] answer for the deposits he had siphoned off should the Legacy banks fail,” Fonacier said.

The BSP said it would file charges against De los Angeles within the week.

Fonacier said De los Angeles initially lured depositors and investors by offering double-your-money schemes with yields of 34 percent and 74 percent for three and five year terms, respectively, with one-year interest paid in monthly checks. This resulted in a 44-percent jump in deposits for Legacy from 2006 to 2008, compared with 6-8 percent growth rates in other banks, he said.

Legacy also deployed agents to offer loans for motorcycles and cars sold by Legacy Motors with a commission of one to 10 percent, Fonacier said.

De los Angeles explained that Legacy offered to charge drivers P100 a day, or less than the P150-a-day boundary they paid tricycle operators. He claimed he was in a joint venture with a Chinese motorcycle maker who supplied him with affordable motorbikes.

Fonacier said most of the motorcycle loans were fictitious. He said Dynamic Bank, for instance, made P2.5 billion in motorcycle loans but records showed only 119 of the 44,172 borrowers received their units.

The modus operandi was duplicated in the banks’ real estate loans where individuals were paid a one percent-commission on loans they signed up for that were immediately transferred to De los Angeles’ Fusion Capital.

Fonacier said the borrowers were made to believe that Fusion would be liable for the loans but it turned out they were still the borrowers of record. She said 10 Legacy banks lent out P3.7 billion.

The loans were then converted into property assets by the Legacy banks, which the BSP has found to be grossly overvalued or nonexistent.

Fonacier said Legacy banks packaged these dubious assets and loans as long-term sales contracts to Legacy affiliates that were not covered by the BSP to evade its examiners and to show that the loans were all current and its capital was sufficient.

Philippine banks stable?

The Central Bank of the Philippines boasts that we have nothing to fear since local banks are financially stable despite global fears of a US recession. Economic advisers of Gloria like defeated Senatorial bet Ralph Recto says banks are "liquid" , meaning, they have money to spend and give out as loans to the people. Now, if these banks need some more funds, the BSP has enough dollar reserves to back them up.

Here we go again. They just simply don't get it.

What people fear about this US sub-prime crisis is its effects on the performance of the global economy. A slowdown will affect export production, and this will not spare Philippine industries. Yes, the US Senate already approved the $700 billion bailout and this will help mitigate the $1.7 trillion needed to slow the effects of a recession. Yet, companies in the States will be hard put accepting all these exports from us, simply because consumer spending will simply slow down due to recession fears.

I think this pronouncement is more political than anything.

Just to show the world, particularly the Philippine opposition, that the Arroyo regime has enough spunk, government is being used to allay fears of a definitive slowdown. When politics enters the policy-making functions of governance, it bodes ill to the people whom it vows to serve.

Rural banks are vulnerable in an RP sub-prime crisis

Gloria pictured a stable financial environment for the Philippines yesterday (there was a Philippine economic briefing yesterday at Shangri-La Makati), even saying that the government is on top of the situation. Bangko Sentral ng Pilipinas backed her up, saying that we have enough reserves to help ailing banks and financial institutions in the event of a full-blown financial crisis. Former senatoriable and now NEDA Chief Ralph Recto was quick on his feet, saying that the reason why the government remains confident is the fact that it has collected billions of billions of revenue from VAT, which is being cursed right now by consumers.

What we failed to recognize is this---Recto failed to say that we are just experiencing the beginning of woes, so to speak, and we're still not out of the woods, no, not yet. He failed to say that the economic slowdown would affect government revenues and yes, even the dollar reserves. Up to what extent will government extend its hand to help ailing banks, insurance firms and financial institutions? 

A slowdown would surely affect VAT collections and taxes. Firms have to raise their commodities prices more to cope up but what will the impact be for the people? Hey, consumers have been experiencing the effects of the global financial crisis since the start of the year and it's not true to say that we are really insulated.

What I fear the most are the rural banks. Rural banks have billions of pesos worth of mortgages that are still in their books. How would they possibly free these mortgages is anybody's guess at this point. The sheer enormity of these mortgages could eventually paralyze the entire rural economy and would definitely affect even the national economy.

The BSP should look into the rural banking sector and try to implement measures that would keep these banks afloat. Bear in mind that thousands of home mortgages have been absorbed by these rural banks which eventually would be affected by an economic slowdown. If these rural banks fail to transform these mortgages into financial instruments, what would happen to our economy? It would surely impact on the entire economic superstructure!

That explains why Speaker Nograles is really hell-bent on allowing foreigners to buy Philippine real estate because the Speaker knows that we have a ticking time bomb, what with these billions pesos worth of bad mortgage accounts being mismanaged by some rural banks.

The BSP should look into this immediately and avert a possible crisis in the provinces. Billions worth of investments are exposed and it would not be fair if government would absorb these losses via the PDIC (Philippine Deposit Insurance Corporation).