Action… counteraction… reaction

For every action there is an equal or sometimes even greater reaction. This is from my high school days when physics was one of the subjects I was struggling with. Little then did I realize that this is true not only in laboratory experiments but also in the world of business and politics.

Let’s look at one of the hot topics of the day – the financial fiasco surrounding the pre-need industry.

With the news of the precarious financial condition of the Sobrepeña-owned College Assurance Plan, Philippines (CAP) hogging the headlines, actions were taken by several sectors.

Senators Panfilo Lacson, Teresa Aquino-Oreta and Robert Jaworski filed separate resolutions calling on the Senate to look into the problem of the pre-need sector with the end-view of instituting measures to protect the investing public. A public hearing was subsequently held to discuss the bill of Sen. Franklin Drilon that provides for the transfer of the supervision and control of the pre-need companies from the Securities and Exchange Commission (SEC) to the Office of the Insurance Commissioner (OIC).

Not to be outdone, the House of Representatives also held a public hearing conducted by Rep. Jesli A. Lapus to hear the grievances of subscribers and plan holders.

Trade and Industry Secretary Manuel Roxas II also joined the act. He proposed the creation of a pre-need plan holders’ protection scheme, noting that while bank depositors can look at Philippine Deposit Insurance Corp. (PDIC) in case their banks get into trouble, pre-need plan holders are left holding an empty bag with no similar entity to run to.

On its part, SEC started to tighten the screws and made several pronouncements to assure the public that SEC is taking action to correct the anomalous situation in the pre-need sector particularly the much-publicized financial mess in CAP. Up to now, though, the public is still waiting for SEC to widely disseminate the names of the companies other than CAP that are deficient in their trust position.

Whew! When it rains, it really pours.

What’s the reaction of the pre-need sector to all of the above?

Re-building trust, not PR

Well, immediately noticeable is the flood of press releases appearing daily in all newspapers that matter. Stories have been repeatedly printed about the sudden liquid position of industry-leader CAP giving the impression that filling the P2.6-billion trust deficiency should not be seen as a big problem by the current CAP plan holders nor by prospective customers.

Some pre-need companies started to buy one-page ads to proclaim their strong financial position while others increased the intensity level of radio and television commercials enticing new investors. Obviously, budgets for advertising and PR activities have been increased.

Apparently, all of this media hype and aggressive PR and promotions programs give credence to rumors that the industry’s counteraction was to engage a high-powered PR group to orchestrate this big bucks media blitz.

Having heard the plights of plan holders who now feel uneasy, insecure and uncertain about the ability of pre-need companies to deliver future benefits, I feel queasy about the route taken by the industry.

Makes one wonder whether they are missing the point. Quite essential in sustaining the growth of the pre-need business is to have the trust of current and prospective plan holders. The level of trust now needs re-building, and I doubt whether high-powered PR programs will do the trick.

Reactions to having more with less

In one of my previous columns, I wrote about the relatively highly population growth in the Philippines. And with the Catholic Church’s strong position against programs addressing rapid population expansion, what we have is deepening poverty caused by having more with less.

Reader Alan L. Sycip of Makati reacted as follows:

"Your article on population control and the Catholic Church’s influence was courageous and true.

"It takes guts to speak out against the medieval Catholic Church… Most people here are very weak (we are all religion but zero spirituality; all form but no substance).

"We are at a national point of potential upheaval and only drastic solutions (e.g., every child after the first is heavily taxed; legalize abortion, etc.) will save the day."

An opposite reaction was expressed by a certain Malonzo who sent this cryptic e-mail:

"I am sure you are well aware that the answer to the traffic in Metro Manila is not to prohibit vehicles from hitting the streets; the answer to poverty is not to eradicate or eliminate poor people, and the answer to over-population is not to tell people not to have children. The answer is ‘basic’."

For every action is an equal opposite reaction. Now we all know how the world goes round and round. And we just have to keep it going.

Should you wish to share any insights, write me at Link Edge, 4th Floor 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. If you wish to view the previous columns, you may also visit my website at http://bizlinks.linkedge.bix.