NO COMMENT ON ERAP: She didn’t have to, but she did. President Gloria Macapagal Arroyo joined days ago the public discussion of the plea of former President Erap Estrada to be allowed by the Sandiganbayan to go to the United States for knee surgery.

The President said that Jaime Cardinal Sin’s calling the idea of a US-trip stupid should be taken seriously, et cetera. Her remarks, made through her spokesman, ranged her against Erap and aligned her among those objecting to his going to the US.

GMA has more to lose than to gain by her anti-Erap remarks. She just fed the growing resentment of the legions of Erap fans who accuse her of plotting to convict and put away their idol. Isn’t it that she was supposed to be on a stepped-up courtship of this vast constituency, the mahihirap, of the fallen Erap?

But the media was pestering her for a reaction? She could have easily said that the case was sub judice and that separation of powers forbade her meddling by commenting on a big case pending in the courts.

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DISGRACE TO THE UNIFORM: He also should not have done it, but he did. Air Force Brig. Gen. Marciano Ilagan deserves the criticism raining on him, and more, for being such a sissy who did not want to get his feet (or his shoes?) wet. We know he is from the air force, but if the general is afraid to wade ashore he should just quit and not bring disgrace to the uniform.

That front-page picture of him in the STAR issue of Feb. 25 (with a US Army sergeant wading in the knee-deep water behind him) explains so graphically the sad state of the Philippine military. The officers and the men have grown soft. (We’re not even talking yet of corruption.)

One of his subalterns made the “ilag” or lame excuse that carrying passengers piggyback was part of the boatmen’s “hospitality.” This apologist should resign with Ilagan for thinking we’re that stupid to swallow his line.

There are certain rules for men in uniform. For instance, you don’t hide under an umbrella when it rains. You don’t stand on one leg. You don’t clear the ground before you hit the dirt. You don’t remove your shoes and roll up your pants — or, worse, ask somebody to carry you — when wading ashore.

Gentlemen, quit quibbling. Just admit that General Ilagan brought disgrace to the uniform.

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BARGAIN SALE: As the backroom operators, even the Wharton-types in the Arroyo finance team, would say, “It’s a steal!”

We’re referring to the government’s buying at the bargain price of P40 per share of stock of the Philippine National Bank that now sells in the market at P67 per.

The purchase would improve the government’s position from 16.58 percent to 45 percent and dilute the controlling (68.2-percent) shares of the Lucio Tan Group to a matching 45 percent. The investing public holds the remaining 10 percent, which could be a swing vote in resolving any policy conflict between LTG and the government.

The deal is being pushed by no less than President Arroyo, who at one time spent almost two hours in the clouds convincing Tan to agree to the watering down from P60 to P40 of the book value of PNB shares.

As majority owner of Philippine Airlines and, we suppose, as physical guarantee of the airworthiness of the aircraft, Tan was on the same PAL jetliner chartered by the Palace when GMA visited Shanghai months ago.

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DEBT-TO-EQUITY CONVERSION: With the 33-percent forced slashing of par value, the government is thus able to buy more PNB shares for less money.

There will be no cash-out for government. It will just resort to a debt-to-equity conversion of P13.8 billion of the P25 billion that has been loaned with interest to the PNB (not to Lucio Tan) by the Banko Sentral and the Philippine Deposit Insurance Corp.

The loan was backed by collateral worth P39.2 billion, including the sprawling PNB headquarters in the reclaimed bay area. The interest rate applied is market rate (treasury bills rate) plus one percent.

Complying with a condition for the loan, the LTG put in another P10.3 billion. Thus, in one year, the group infused a total of P19.9-billion new capital. No local bank has done something like that.

The P40 shares being eyed by the government were acquired by Tan at an average of P140 per share. By this time, the taipan may have been beaten to near submission for his supposed good fortune — and appears likely to yield.

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WHO MUST RUN PNB?: Banking sources tell us that although Tan has agreed to sell at P40, he is asking that he be given a say on who will run the bank. Fears linger that a return of government could mean also the return of behest loans to the 86-year-old institution that has been a favorite milking cow of those in power.

Locking in Tan and the government working as strategic partners is a wise move. After putting in more than P20 billion in the bank and now agreeing to water down his shares, it is not only logical but also fair that Tan be given a pivotal role in managing PNB.

To ease him out and leave him holding the empty bag may not sit well with local and international investors. Besides, no single Filipino banker (not even the Ayalas or the Gokongweis) has ever poured the kind of money that Tan has thrown into PNB.

On the other hand, to allow the PNB to rot and fall could be disastrous for the banking industry. One such big bank collapsing might bring down the whole system.

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SENATE OBSTACLE COURSE: Government takeover is a virtually done deal, but it may have to hurdle first the usual obstacle course in the Senate. A gaggle of senators, among them John Henry Osmena and Aquilino Pimentel, want to poke their fingers into it.

Reports have it that the senators want to know why government did not retake full control of PNB despite its having extended a P25-billion loan to it. They also want to know if the government did Tan a favor by giving emergency assistance to PNB.

Norberto Nazareno, PNB chairman and concurrent PDIC president, said in his testimony in the Senate inquiry that the rehabilitation plan for the bank was good not only for government and PNB’s more than two million depositors, but also for the entire banking industry.

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EMERGENCY LOAN: As early as 1999 — before the LTG took control — PNB was already suffering from reserve deficiencies. This means that the bank’s ability to meet withdrawals stood at a less than satisfactory level.

Tan’s capital infusion helped the bank weather the storm. However, when PNB had problems in the latter part of 2000 due to heavy withdrawals mostly by government agencies, it had to secure the P25-billion emergency loan from BSP and PDIC.

The rescue of banks in trouble is not unusual. Recall that Equitable-PCI, one of the top three banks in the country, also got a whopping P30-billion assistance when it suffered heavy withdrawals at the height of the Estrada impeachment trial. Banco Filipino also comes to mind, having secured financial assistance from the old Central Bank in the early ‘80s.

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VULTURES HOVERING: Nazareno was saying that government’s assistance to PNB ensures stability in the local banking sector because PNB — the country’s sixth largest bank — is “too big to fail.” He added that all the loans extended to PNB were fully secured by collateral whose value far exceeds the amount of the loan.

On these two counts, Nazareno justified the extension of the loan. On the other hand, government’s decision to share management control of PNB with the Tan group is a healthy compromise.

On the side, however, there is the ominous silence of other bankers who are the ultimate beneficiaries of a more stable banking system once PNB is rehabilitated. With the exception of Nazareno, the BSP and PNB’s officers, no one has dared to come out to support rehabilitation.

It would seem that some bankers actually want PNB to go under and for them to profit from its demise.

PNB stockholders should be alarmed, for instance, that a senator who has been very vocal on the PNB issue is often seen in the company of a prominent banker at the Manila Polo Club. Could it be that this banker — whose family owns one of the more prominent banks in the ‘80s — wants PNB to fail so that he could take over or buy its attractive real estate portfolio in a “fire sale”?