(Second of Two Parts)
It had been the Aquino administration’s frenzied political witch-hunting against former President Gloria Arroyo and her purported supporters that motivated the plot in 2011 for the Bangko Sentral ng Pilipinas’ to clamp down on the country’s biggest conglomerate, San Miguel Corp. (SMC).

The pink-party Akbayan and NGO faction within President Aquino’s camp claimed—as had been their party line for two decades—that then controlling owner Eduardo Cojuangco, had been a Marcos crony, captured San Miguel through coconut levy funds which the dictator Marcos imposed it the 1980s.

Image of confidential memo calling move on SMC as “witch-hunting”.

Pouncing on Cojuangco’s neutrality in the 2010 elections, this faction in Aquino’s government even alleged that he had secretly funded Joseph Estrada’s campaign, which explains why the convicted plunderer surprisingly landed second in the presidential race. With Aquino’s immense popularity at that time, it convinced Aquino’s inner circle that it a could tighten the screws on Cojuangco.

This group’s interest allegedly coincided with that of Mar Roxas, who resented that Cojuangco did not contribute to his campaign and even supported Loren Legarda, who landed third in the vice presidential race.

What particularly excited Aquino were allegations by Roxas’ business supporters—many of whom were competitors of San Miguel in the fields it diversified into—that former First Gentleman Miguel Arroyo’s alleged wealth had been invested in the conglomerate, which purportedly financed its rapid expansion. “They thought they could pressure Ramon Ang, Cojuangco’s heir-apparent in San Miguel, and now San Miguel president to disclose FG’s (First Gentleman’s) investments, “ my source explained. “They didn’t think he’d stand his ground, but he did,” the source said.

Three years after nearly the entire machinery of government, including the Anti Money Laundering Council’s secretariat which has access to records of all banks, had been mobilized to leave no stone unturned in the search for Arroyo’s allegedly “hidden wealth”, it has come up with nothing.

I didn’t conjure up the term “witch-hunting” in explaining the possible motives for the Aquino government’s attempted shakedown on SMC. It was the term used by then Monetary Board member Nelly Favis-Villafuerte who vociferously objected to the BSP Supervision and Examination Sector’s proposal to undertake a ‘stress test’ on San Miguel. In her 4 April 2011 memorandum, she warned:

“I predict that ‘witch-hunting’ against SMC will become a monumental scandal that will discredit BSP.” (Emphasis in the memorandum, not mine.)

One source claimed that the motive for the plot against San Miguel is the same as the clampdown on billionaire Roberto Ongpin, whom Aquino’s camp suspected had also been hiding the Arroyo’s purported wealth. “They thought they could frighten Ongpin to a secret deal by which he’ll disclose where the Arroyos invested their money,” the source claimed.

(It was the majority shares of London-based Ashmore Group in Petron Corp., which San Miguel bought in 2008 when Ongpin was the British group’s adviser, and partner in the country. Ongpin also acquired a major stake in SMC in 2009 through his 20 percent ownership of Top Frontier Holdings, majority held by Inigo Zobel and Jose Campos, which has 28 percent holdings in the conglomerate.)

BSP deputy governor for bank supervision Nestor Espenilla, who led the move to investigate SMC, was the same official who asked the Court of Appeals to freeze Ongpin’s bank accounts and other former officials of Development Bank of the Philippines in December 2012, on grounds that the Ombudsman had charged the magnate for allegedly getting “behest loans” from the DBP.

He issued the recommendation in his acting capacity as chairman of the Anti Money Laundering Counc—by law the Council’s head—was abroad. Ongpin had filed a graft case against Espenilla, on grounds that he gave false information to the Ombudsman regarding this loan from the DBP.

In a letter to senators complaining of his persecution, Ongpin said that “several billions of pesos” of his listed companies’ values “have vanished into thin air since like anywhere else, freezing one’s accounts is regarded also by the Philippine investing public as a most serious matter.” Three foreign investors he was organizing for a $1-billion project in the country backed out when his bank accounts were frozen.

BSP governor Tetangco appears to be clever enough to have been on leave whenever his subordinates move against a target of the Aquino regime.

It was the raw data on Renato Corona’s confidential bank records given by AMLC director Vicente Aquino last year to Ombudsman Conchita Morales that convinced the majority of the Senators to convict the former chief justice. Never mind if Morales, deliberately or not, distorted the data so that all of Corona’s bank transactions, both credit and debit entries, were added up to falsely claim that he had a $12 million balance. Tetangco was also on leave when Aquino gave the raw data to Morales.

Former Monetary Board member Villafuerte in her memo pointed to a different motive for the BSP’s plot on SMC: “The BSP under Governor Tetangco and DG Espenilla should be forewarned not to be an unwitting tool of the competitors of SMC in its diversification programs and its proposed participation in the PPP programs of President Aquino.”

Villafuerte was referring to the fact that SMC had diversified under Ang’s leadership since 2008 to industries practically nobody thought the mainly beer company would go into, such as power distribution (Meralco), power plants (Sual and San Roque) fuel distribution (Petron), air transport (Philippine Airlines), infrastructure (Boracay airport, MRT7, and NAIA Expressway), and even telecoms (Liberty and Eastern Telecoms.).

This had made SMC a major competitor to such conglomerates who were into these industries such as the First Pacific Group led by Manuel Pangilinan, the Lopez politico-economic clan, the Spanish Ayala Group, and even Henry Sy’s SM conglomerate.

I don’t think these competitors though could have agents inside the BSP. It is the administration on the other hand that can easily seduce its top officials to join a plot.

Tetangco’s term is until 2017, but he could be persuaded to retire early since he is on his 8th year as BSP governor. I suspect his post is on the sights now of one of his aggressive deputy governors executing Malacañang’s orders. Deputy governor Espenilla’s father was reportedly close to former President Cory Aquino, who appointed him as officer in charge of Masbate after the EDSA Revolution.

Not even during central bank governor Gregorio Licaros’ and Jaime Laya’s terms during the Marcos era was the BSP politically weaponized against perceived enemies of the ruling administration.