MANILA -- A former corporate regulator on Tuesday revealed that Philippine President Joseph Estrada was aware and condoned an alleged bribery by a close friend who wanted to be cleared in the country's worst insider trading scandal.

Ruben Almadro, former vice president of the Philippine Stock Exchange (PSE), said he was "shocked" when Estrada revealed that his friend allegedly bribed the country's securities chief during a meeting to discuss the results of a probe on the scandal.

"The chief enforcer of the laws was telling me that his friend had bribed a public official and he did nothing to take action either against the bribe giver or the bribe taker," he said during the 18th day of the president's impeachment trial.

"The president was in effect telling me, an ordinary citizen, that he was condoning the act," he added.

Under Philippine laws, public officials are supposed to report any knowledge of bribery and other criminal acts. Failure to do so constitute a criminal offence.

Almadro was referring to presidential friend Dante Tan, owner of gaming firm BW Resources Corp., who allegedly paid former securities and exchange commission chairman Perfecto Yasay to exonerate him in a stock manipulation case.

Yasay, who has accused Estrada of pressuring him to clear Tan, has denied accepting the bribe. He was forced to resign last year and is expected to also take the witness stand against the president.

BW shares surged more than 5,000 percent during an 8-month period ending in October 1999.

Almadro headed a compliance and surveillance group at the PSE to probe the "highly irregular" movement of BW shares. The probe implicated several brokerage firms and Tan in price manipulation and other illegal trading acts that boosted BW share prices.

Almadro resigned from his post after the PSE decided not to take action against the brokerage firms. The controversy led to the near collapse of the stock market last year.

Tan and some brokerage firms are now facing stock manipulation charges at the courts. The scandal is the country's first insider trading case.

Estrada, the first Asian leader to be impeached, is on trial for bribery, graft and corruption, betrayal of public trust and violations of the Constitution. The BW resources case falls under the third article of impeachment.

The impeachment case stemmed from accusations by an estranged friend that Estrada collected more than $8 million in illegal gambling payoffs and $2.6 million in tobacco tax kickbacks.

Estrada would be removed from office before the end of his six-year term in 2004 if two-thirds of the country's 22-member Senate find him guilty in any of the four articles of impeachment. A verdict is expected by mid-February.

Earlier Tuesday, prosecutors said First Lady Luisa Ejercito and three mistresses maintained secret bank accounts in different branches of Citibank in the country, which were allegedly used to hide unexplained wealth.

Congressman Joker Arroyo, another prosecutor, said the team was attempting to show that Estrada's wife and mistresses helped the president hide unexplained wealth amassed during the chief executive's two-and-a-half-year rule.

(DPA)