Nearly seven decades after the country’s liberation from Japanese occupation on, the legacy left by the men and women who fought so the Philippine flag could fly free and unfettered continues through the Philippine Veteran’s Bank (PVB). This follows the thinking that, after war comes peace and, with peace, prosperity follows.
Some 20 years ago, PVB re-opened its doors to the public, thanks to the efforts and persistent lobbying of the Veterans Federation of the Philippines (VFP) led by its president, Col. Emmanuel V. de Ocampo. This time, the Filipino veterans were now the true owners of the bank, and not merely owners on paper.
The idea to establish a veterans bank began in 1956 when the war reparations agreement with Japan concluded. These war reparations provided for payment by Japan to the Philippines of $20 million in cash, P5 million in capital goods and $10 million in services. Republic Act 1789 better known as the Reparations Law, placed the cash reparations in a trust fund for the benefit of World War II veterans, their widows and orphans.
If these funds were distributed at that time to the veterans, each would have received only about P100, computed at the prevailing exchange rate of two pesos to the $ dollar. The legislature deemed it best to invest the funds in a bank that will service the veterans’ needs and provide for their future.
PVB is more than just a bank. It is a community that ensures that the blood spilt in wartime and the valiant defense and resistance put up by our veterans will bear good fruit for the generations to come. The way has not always been smooth for PVB, but the bank continues to work to fulfill its mandate and, with people well-versed in matters of finance, it is making progress toward fulfilling its mandate.
On June 18, 1963, the Philippine Veterans Bank was created under Republic Act No. 3518, which became its charter. PVB was conceived and created as a private commercial bank owned by the veterans. However, even after the common stocks were transferred to the veterans, subsequent amendments to RA No. 3518, through a series of Presidential Decrees issued during the martial law era, enabled the Marcos administration to continue appointing board members.
The veterans, in effect, became PVB owners in name only. As history would later reveal, the bank fell prey to political excesses and mismanagement.
Due to capital deficiency, PVB was closed by the Monetary Board of the Central Bank on April 10, 1983. It was placed under receivership and, subsequently, under liquidation on June 17, 1985.
By then, the veterans’ one common share and one preferred share valued previously at P200, had been reduced to almost worthless pieces of paper good only as tinder. After waiting for 23 years, all the veterans got was P28 in cash dividends each.
PVB’s ignominious closure was seen as a great betrayal to the thousands of World War II veterans with whose reparation funds the bank was founded and whose interests PVB was meant to serve.
Under the administration of the late President Corazon Aquino, the framers of the 1987 Philippine Constitution provided that adequate care, assistance and other benefits shall be given to the veterans.
Through the initiative and efforts of the Veterans Federation of the Philippines (VFP), the new national leadership and legislature reopened and rehabilitated PVB through RA 7169. This measure restored the spirit and intent of the original charter of the bank.
The veterans regained their right as owners to elect the Bank’s board members making them fully responsible in determining the bank’s future direction. One-fifth of the dividends of PVB’s investments have since been earmarked for subsidising the medical needs of its stockholders – the veterans and their widows and children.
Rising from ashes
A leading figure behind the bank’s reopening in 1992 is Col. de Ocampo, PVB chair and a recognised and bemedalled WWII veteran who distinguished himself in battle as the commanding officer of the famed Hunters Division.
On May 6, 1992, the veterans’ struggles were rewarded when then Central Bank of the Philippines (now the Bangko Sentral ng Pilipinas) granted PVB the authority to operate as a private commercial bank. On July 3, 1992, President Fidel V. Ramos presided over the symbolic re-opening of the PVB.
As a private commercial bank, Philippine Veterans Bank (PVB) is unique in many ways. For one, about 400,000 World War II veterans and their heirs are its registered owners. A substantial portion of PVB’s net income is given to the veterans and to projects that benefit their welfare.
Today, 20 years later, PVB has become one of the fastest growing commercial banks in the country. Just 10 years ago, it was ranked 32nd among the commercial banks in terms of total assets. Today, it is ranked 18th.
PVB is also setting its sights for greater market share and visibility in the highly competitive banking industry, according to PVB president and CEO Ricardo A. Balbido Jr. PVB is now one of the most liquid banks in the country and consistently generates profits for its veteran shareholders – profits that go toward their health care needs now that they are in their twilight years.
In 2011, PVB netted P519.07 million – about the same level as the previous year’s P519.59 million. During the same period, the bank’s total assets were pegged at P57.38 billion, while capital funds were at P5.68 billion, as of December 31, with a capital-adequacy ratio of 16.15 percent under Basel II. This places the bank above the BSP minimum requirement of 10 percent.
Balbido leads the significant changes and improvements in the bank, bringing his extensive banking experience since he joined PVB in January 2001. Prior to assuming the PVB helm, Balbido was senior vice president at Bank of the Philippine Islands until 1995, when he was asked to help set up Dao Heng Bank, where he later became president.
Since then, PVB has been professionalising its ranks with intensified training activities and by hiring seasoned banking executives and managers to help grow the business and boost performance.
The bank has also been upgrading its information technology (IT) systems to expand and improve its capacity to manage its government and private account portfolios. Innovative products and tailor-fit services were also introduced to the corporate market for both private and public clients.
PVB is a private bank, but it has the advantage of an authorised depository of government funds. As stated in RA 7169 section 6, Veterans Bank is declared as a government Depository for government Agencies and local government units (LGUs).
Philippine Veterans Bank’s corporate social responsibility is embodied in the very core of its existence. After all, it was built to ensure financial stability for the veterans who are its stockholders. This fact defines PVB and sets it apart from most private for-profit corporations.
At the onset, PVB’s constitutional mandate was to provide immediate and adequate care, benefits and other forms of assistance to war veterans and their families. Twenty percent (20 percent) of PVB’s net profits is given to the Board of Trustees for the Veterans of World War II (BTVWWII). As such, the mission of the bank is to ensure its sustainable profitability and growth.
Balbido noted: “In other private banks, a net loss means an erosion of capital. In Veterans Bank, a net loss means that our World War II veterans will get less of their free medicine and medical check-up privileges.”
Two major institutions have been continuously supported out of the cash dividends declared by the Bank.
The first is the Veterans Federation of the Philippines (VFP) Out-Patient centre in Taguig, a modern medical facility that provides free medical and dental care to veterans, conceived to decongest the government-run Veterans Memorial Medical centre or VMMC. To date, thousands of indigent WWII veterans, their widows and children have availed of the free medicine and medical services. The other is the VFP Museum, Library and Archives, a repository of war memorabilia and a state-of-the-art showcase of the veterans’ heroism so that today’s generation will continue to nurture the freedom we now all enjoy.
Banking with PVB does more than just provide a solid and secure repository for one’s money. It also provides profits that go toward funding continued medical care for the families of the men and women through whose valor the Philippine flag flies free.