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Urban Letters

A. This letter was sent by The Trust Guru after it was announced that the BSP has approved in principle the rehabilitation plan proposed by the Bank of Commerce:

06 July 2000

Mr. Alberto V. Reyes
Deputy Governor
Bangko Sentral ng Pilipinas

Mr. Norberto C. Nazareno
Phil. Deposit Insurance Corp.

Dear Sirs:

Please permit me to relay to you the sentiments of the some of the visitors of my website, as well as my own concerning the plan being proposed by the Bank of Commerce for the rehabilitation of Urban Bank and Urbancorp. The comments hereunder refer specifically to the approach to the trust accounts in both companies:

1. Everyone accepts the principle that, for the good of the economy in general as well as for the sake of all the stakeholders in the said financial corporations in particular, both institutions should be opened and made operational as soon as possible.

2. Not all trust accounts should be treated the same way and much less should the trust accounts be treated in exactly the same way as deposit and quasi-deposit liabilities of the two companies.

3. All trust accounts which were placed in financial instruments that were specifically directed by the trustors in accordance with the regulations should be terminated and the assets given to their respective beneficiaries or trustors who should then take it upon themselves to collect from the issuers of the papers. This is based on the principle that, with respect to the directed investments, the management of the trust investment was exclusively borne by those who gave the direction and therefore the onus of collection or non-collection should be placed on them.

4. The owners of all trust accounts which were individually managed and were discretionary in nature should be given the choice of either being treated like owners of directed trusts above, or, of being treated as investors in the common trust funds.

5. All the assets of the common trust funds (as of the individual accounts which have opted to be treated like common trust fund participants) will be conveyed to the Bank which will then issue negotiable time deposit certificates which are structured in the same way that the Bank is offering to its deposit creditors. We understand that that entails Php 500,000 withdrawable at day one of opening; 30% of the entire claim by the end of one year; 30% of the balance at the end of the second year; and the remaining balance at the end of the third year, all at BOC’s proposed interest rate from the time the Bank opens.

6. Since the assets of the trusts will be replaced by the deposit instruments of the Bank, said deposit instruments, said deposit instruments should be insured by the PDIC to the extent required by law.

7. The trust department of the Bank holding the deposit instruments shall not charge any management fee for the management of the portion of the trust accounts which are in the aforesaid deposit instruments.

8. The taxes and other costs of transferring the assets of the trust accounts to the Bank should be shared 50%-50% between the Bank and the trust accounts. 

I submit the foregoing by way of service to my site visitors as well as to the public whose faith in the trust device as a way of providing prudent management over their assets should at all costs be sustained.

Thank you very much.

Reynaldo G. Geronimo


B. This was the response of PDIC to The Trust Guru’s letter dated 18 May 2000:

May 31, 2000

Atty. Reynaldo G. Geronimo
Romulo Mabanta Buenaventura Sayoc & delos Angeles
30th Floor Citibank Tower,

Makati City

Dear Atty. Geronimo,

We would like to acknowledge receipt of your May 18, 2000 letter to BSP Deputy Governor Alberto Reyes covering several inquiries on your clients’ trust deposit with Urban Bank.

We would also like to assure you and your clients that PDIC, as receiver for Urban Bank and its trust department, is primarily guided by the BSP regulations as cited in your letter.

Our actions are geared toward validating all assets held in trust vis--vis the trust account records of the bank and preserving these assets for the benefit of the named beneficiaries of the trusts. Presently, trust records are being updated as at April 26, 2000. This action is being coordinated by PDIC with Urban Bank trust officers and staff.

Upon validation of trust account records, PDIC shall meet with the trustors, beneficiaries, principals, and/or other parties-in-interest to discuss the appropriate disposition of such trust assets. All assets, with the exception of funds deposited/invested with the bank and/or the investment house, may be transferred/delivered or withdrawn by the trustors, beneficiaries, principals, successor-trustees and other authorized parties-in-interest subject to limitations set in their respective trust or investment management agreements. Trust funds, or a portion thereof, tied up in bank deposit accounts would follow the normal bank deposit recovery procedures. Recovery of trust funds, or a portion thereof, deposited, invested with or lent to UrbanCorp Investments Inc. (UII) shall be coordinated in the SEC-appointed Interim Receiver of UII.

All trust clients pursuing their claims are requested to write to PDIC (Urban Bank Trust Department) at the 18th floor of the Urban Bank Centre. PDIC, on the basis of the letter-request, shall set a meeting date where the status of the trust account and its assets will be discussed. Clients are requested to bring their copy of all documents, latest trust account financial statements and primary (i.e., passport, driver’s license, etc.) and secondary (company ID, senior citizen card, credit card, etc.) identification. Corporate clients are requested to bring copies of board resolutions detailing the names and signatures of the authorised representatives/signatories to the account. Court appointed trusts would require the appropriate court orders. Delivery of trust assets, which may be in whatever form, would be upon the written direction of the client and shall be determined in said meetings.

Should you have other queries on matters concerning Urban Bank trust accounts, please feel free to contact Mr. Antonino B. Inumerable (PDIC Consultant) at the 18th floor of the Urban Bank Centre.

Yours truly,

Philippine Deposit Insurance Corporation
Norberto C. Nazareno


cc: AVReyes (BSP)

          C. This letter was sent by the The Trust Guru after Urban Bank and Urbancorp were closed down and the newpaper accounts of the developments dealt with depositors and creditors but not with trust clients of the two institutions:

18 May 2000

Mr. Alberto Reyes
Deputy Governor
Bangko Sentral ng Pilipinas

Dear Governor Reyes:

I am writing on behalf of some visitors to my above website,, inquiring what they are to do in order to be able to withdraw their money from the trust accounts which they claim are being managed by the Urban Bank.

We have already given them the assurance that, as provided in Section 65 of the General Banking Act, "no assets held by a trust company in its capacity as trustee shall be subject to any claims other than those of the parties interested in the specific trusts". Furthermore, we told them that the BSP Regulations, Sec. X428, provides that "whenever a receiver is appointed by the Monetary Board for a bank which is authorized to engage in trust and other fiduciary business or in investment management activities, the receiver shall, pursuant to the instructions of the Monetary Board, proceed to close the trust, other fiduciary and investment accounts promptly and/or transfer all other accounts to substitute trustees, fiduciaries or investment managers acceptable to the trustors, beneficiaries, principals or other parties in interest: Provided, That where the trustee, fiduciary or investment manager is acting as such under appointment by a court, the receiver shall proceed pursuant to the instructions of said court".

Still, they are unassured and would like the answers to the following questions:

1. When would a complete listing of the assets and liabilities of their trust funds as of 26 April 2000, as well as the valuation of their assets in said fund, be available to them?

2. When would an accounting of their trust funds, particularly relating to the period covered by the first quarter of the year 2000, as well as the month of April, be available to them; if so, when?

3. What is the procedure to be followed by trust clients in order to prove to the receiver their trust or investment account with the trust department of Urban Bank?

4. Did Urban Bank have enough funds, as of 25 April 2000, to back up the managers checks it issued to pay back the investments of those who had withdrawn or preterminated their trust accounts?

5. Is it possible for those who have trusts in Urban Bank to simply take delivery of the trust assets of their accounts and/or require that the same be transferred to the newly appointed trustee of their accounts?

6. Is the appointment of another bank, which has trust license, as successor trustee of Urban Bank, for its trust accounts being considered? If so, when will the appointment of a successor trustee be announced? What would be the procedure for selecting and appointing such successor trustee?

7. Could the trust clients be provided a checklist of the documents needed to be presented to the successor trustee in order for the trustors or trust clients of Urban Bank to get hold of the assets in their trusts, regardless of what condition said assets are in?

8. Since your goodself will be busy attending to other matters, who is the contact person who can speak for yourself and make decisions on specific questions relating to their trust accounts?

To expedite your response, you may reply by e-mail. However, if a hard copy is more convenient for you, you may send it to myself, Reynaldo G. Geronimo, Partner, Romulo Mabanta Buenaventura Sayoc and De Los Angeles, at the 30/F Citibank Tower, Makati City.

With your permission, and for the benefit of the public, I would post your response at my website as is and without any editing.

Thank you.

Very truly yours,

Reynaldo G. Geronimo


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