Banco de Oro Unibank Inc. is one lucky bank, receiving a total of P16.8 billion in total financial assistance from the Bangko Sentral ng Pilipinas (BSP) so far.

This makes BDO as the bank with the largest incentives package from the BSP.

According to a report by the Commission on Audit (CoA), the BSP extended BDO P10 billion in financial assistance in 2002 for its takeover of First E-Bank. Before that, BDO has also received P6.8 billion loan from the BSP when it acquired United Overseas Bank (UOB).

The loans for the UOB have a maturity of 20 years at low interest rates of 0.5 percent. The loan, taken out between the years 1997 to 2000 was restructured in 2002.

BDO, controlled by the Sy family of the SM Group, has a pending proposal for another P10 billion to P12 billion loan from the BSP for its plans to buy Export and Industry Bank. These concessional loans are billed as “income support.” The Monetary Board has yet to approve the proposal.

In previous BDO loans, the BSP remitted the loan to the Philippine Deposit Insurance Corp. because the central bank charter has a prohibition for direct loans to banks. The BSP is only allowed to extend loans as “emergency loans” to any bank.

As of 2004, PDIC has absorbed about P81 billion worth of rehabilitation loans, given by the BSP as emergency loans. The PDIC’s assumption of these loans has been the subject of contention between CoA, BSP and the PDIC.

Based on documents, PDIC shouldered 65 percent of the total loans extended by the BSP which CoA analysts said had “very lax mode of payments.” The interest rates were too low and maturities were too long, or from 20 years to 45 years.