Why dollar deposits? Corona cites health issues

Chief Justice Renato Corona says he began investing his savings in the 1960s. But he was just a student then.

DIABETIC CORONA. The Chief Justice walked out of the Senate session hall supposedly due to hypoglycemia.

MANILA, Philippines – Chief Justice Renato Corona cited health and liquidity needs as reasons for choosing to invest bulk of his wealth in foreign-denominated accounts.

Taking the witness stand for the first time on Tuesday, May 22, Corona claimed that his diabetes, his mother’s colon cancer, and his brother’s illness played a role in the decision to park his and his family members’ assets in deposit accounts.

Deposit accounts are liquid or cash-ready assets that, according to Corona, suited needs for medicines and other health-related expenses.

During his prolonged opening speech, he briefly mentioned that he has diabetes while discussing his dollar accounts. However, presiding judge Juan Ponce Enrile interrupted him to ask how long his speech would still be since the trial needed to continue.

Later, his diabetes and low sugar level were cited as reason for walking out after his speech.

Cash-ready assets

Before the high drama, Corona peppered his lengthy and emotional speech with health issues besetting him and his family, essentially explaining why they need liquid assets.

He paused and was almost tearful when he talked about his mother’s colon cancer, which he said was diagnosed in 1990’s.

“She entrusted to me whatever money she had in the bank. She asked me to manage it for her and told me to take charge of paying the hospital bills and the doctors, as well as her funeral expenses,” he narrated in Filipino.

“She also said that, whatever funds would be left after her medical and other needs were settled, should be used for emergency needs of the family…My brother, Arturo, suffered heart-related illness that required putting 5 stents. He was not able to work because he became sickly, then perpetually confined to bed.”

“I used the funds for his monthly needs, medicines, and when he was confined at Medical City,” Corona explained.

He did not mention, however, how much his mother turned over to him, nor how much remained as of end-2011, the cut off for the SALN or the wealth report that government officials are required to submit annually.  

Why dollar?

He said that the funds in the banks would be re-invested each time they would mature, earning interest that paid for their needs.  

“Each time a time deposit account would mature, the funds would be transferred to another to earn more interest,” he said, explaining why there were numerous transactions as monitored by the Anti-Money Laundering Council.  

Rappler previously reported that shopping for better rates is a usual practice among Filipino investors.

Aside from the amount he received from his mother, he said his own and his wife’s savings were also invested in dollar-denominated accounts in local banks.

Why US dollars? “Because there are no loses in dollar-denominated accounts. The dollar is more stable compared to Philippine peso. It is liquid, it is easy to encash, and the value goes up easily,” he explained.

Traditionally, dollar deposits earn less interest rates than peso-denominated bank products. However, Corona claimed that the depreciation of the peso was enough to grow the principal of the dollar accounts that represented his and his mom’s funds.

Student in 1960s

Corona said he and his wife began investing their savings in foreign-denominated accounts in the 1960s, when the peso-dollar exchange ratio was at 2:1.

“I was earning well that time, especially when I became a lawyer. We converted all our savings into US dollars,” he narrated.

Corona finished college in 1970, which means he was still a student in the 1960s. After graduating, he held a full-time job in the office of the Executive Secretary in Malacañang while taking up evening classes at the Ateneo Law, according to the Supreme Court web site.

He has likewise said that he even had to take a student loan to be able to go to Harvard for his masters.

“Our decision to invest in dollars paid off since the exchange rate has since increased almost 7 times,” he said in the vernacular.

He cited how the peso-dollar exchange rate shot up to 6:1 after the 1969 presidential elections, when the peso currency devalued.

Only 4 dollar accounts

He also debunked the previous testimony of Ombudsman Conchita Carpio-Morales that he has 82 dollar-denominated accounts. He said only 4 are under his name as of end-2011.

He detailed opening and closing bank accounts and transferring funds in different bank branches in the past years.

As of end-2001, the remaining dollar accounts are held only in the following: one account in BPI San Francisco del Monte, one in Allied Bank and two in PSBank.

He stressed that these dollar accounts are not reflected in his SALN since these are specifically covered by bank secrecy laws.

Ombudsman Morales had earlier testified about his alleged multi-million dollar accounts that were monitored and reported by the Anti-Money Laundering Council. Morales cited a waiver at the back of the SALN form, which Corona signed, as basis for tapping the government agencies to look into complaints that Corona had unexplained wealth.   

Thus, he said the testimony of Morales, who is his former colleague at the Supreme Court, is a “malicious lie meant to ruin my reputation.”

For foreigners, not politicians

Corona’s foreign exchange bank accounts have grabbed most of the limelight since Corona’s counsels and a local bank, PSBank, have cited that these are covered by strict secrecy laws, and should not be divulged at the trial.

Previously, banking law expert Reynaldo Geronimo explained that, “The secrecy of the forex deposits was initially conceived for foreigners…The purpose of FCDA (Foreign Currency Deposit Act) is not to protect public officials who want to hide their money in dollar accounts, but to encourage foreign investors to bring in their money here. The foreigners are given this assurance of absolute secrecy.”

The FCDA prohibits banks to disclose foreign-denominated accounts except upon a written permission from the account owner.

After his speech, Corona signed a waiver authorizing banks to disclose his peso and dollar accounts as senator-judges looked on.  

However, he said he will submit it only on one condition: all 188 lawmakers who signed the impeachment complaint will also submit their own waivers.

“I will submit my waiver until all 188 have submitted waivers. If they don’t, I will rest my defense,” he said before leaving the session hall, ignoring Enrile’s repeated calls for him to return.

Not long after, the session was suspended.

Corona has yet to confirm or deny how much funds he really has in these bank accounts, how much of these are his, and how much he is managing in behalf of others.

The impeachment court is trying to establish if he violated the Constitution when he did not properly declare his true wealth. – Rappler.com

Click on the links below for more of Rappler’s special coverage of CJ Corona’s trial.

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