Upbeat, but a sour note

The week’s business news has been uplifting. Although the peso has been a little unsteady on its feet of late, it has largely stayed on track at close to P52 but threatening to pull back even farther to P51. The prediction of its eventually pulling to P47.50 is deliciously drawing closer to reality, and all of us watching the business news with hawk eyes are blue in the face waiting for this to happen sooner. Eight years ago, after the 1997 havoc on our economy, friends and family at the UN told me their dire prediction — that the peso was going to hit a rock-bottom P50 to the dollar, and we all thought — nah, that’s pretty extreme. We were then at P40, and a P10 slide in the market was catastrophic and unimaginable. Well, we eventually hit more than P56, the lowest ever, and watched in envy as the economies of our neighbors in the Asean region pulled away from us, as tourism peaked in Thailand and the baht left the poor peso behind, as China slowly but surely took over our export market and the rest of the gang slowly overtook our labor market as well.

Well, the wheel is slowly turning. It’s painfully slow, but we’re finally moving out of the rut where we had stayed for close to a decade. The news that the venerable Cora de la Paz has been elected to chair the Equitable PCI Bank is also welcome news to many businessmen. I’ve had the pleasure of interviewing Cora, and her grasp of issues, her views and her singular drive to move the country forward despite the odds are what this banking institution needs to move on. Her sense of mission was infectious. Cora came to EPCIB with impressive credentials — she was chair of Joaquin Cunanan/PricewaterhouseCoopers Philippines and used her extensive background in this august firm to clean up the Social Security System when she took over a few years back. This development is certainly worth watching.

Some of the sluggish corporations are reporting remarkable turn-arounds, banks are back on track and healthy once again.

But what’s this I hear about the sorry state of Philcomsat?

Fellow Star columnist Mary Ann LL. Reyes ran a very interesting and well-researched item on the dizzying affairs of this erstwhile profitable company. By Mary Ann’s account, the company has been bleeding since this group led by a certain Victor Africa took over.

Is the coffee shop buzz that goes around saying that this Victor Africa has the Midas touch, in reverse – instead of turning to gold, everything he touches turns to trash? Some unkind soul even had the temerity to say that the companies in question, Philippine Communications Satellite Corp. (Philcomsat) and Philippine Overseas Telecommunications Corp. (POTC) have gone to the dogs ever since the takeover. Even if this is true, which I don’t say that it is, I would beg to disagree. I’m a self-avowed dog lover and I resent that. Dogs are clean. Gone to the rats, maybe? Rats are dirty.

Coffee shop habitués were just wandering if the man that’s being referred to as the leader of the group that allegedly illegally took over Philcomsat the same controversial person who was once barred from the Makati Sports Club, ousted from its board and then declared "persona non grata" by the general membership of the club? He allegedly took over the club physically by forcing through the locked gates, then barricading themselves in.

The caffeine addicts are saying that this could be the same person who was allegedly considered by the membership and board of an exclusive country club in Pasig as a nuisance member for picking nits within the organization, even costing the club a fortune by suing the club and its directors for every little silly thing that crossed his mind, like what some members described as his myopic dislike for stickers on his windshield because it distracted his view? The club’s stickers were a few inches in size, so how, pray, many of the members reportedly argued, can this obstruct anyone’s view? But, yes, he did file a case against the club for this because the club refused to make him an exception. If everyone, including all the directors, were willing to tack on one little sticker that identifies him as a club member, why should one nuisance member get away with a clean windshield? By the way, that case against the club he reportedly miserably lost.

I don’t know if it is the same person, but what I know for a fact is that there was that nuisance member of that exclusive club in Pasig who was really considered by the membership "en toto" as a real pain in the you know what.

What does not seem to make sense is how can a minority group wrestle control of erstwhile profitable companies? With an interest of only 7.1 percent, the second lowest block in the company (the lowest belongs to Sen. Juan Ponce Enrile’s family at 6.6 percent), how did he manage to bulldoze his way into the chairmanship of the Board? Or does the chair really have his name? The Securities and Exchange Commission and the PCGG upheld the recent elections of the board of these two companies, but of course, Africa and his group, according to Ms. Reyes, cannot be bothered by such trivialities.

Mary Ann interestingly reveals further that, prior to the takeover; these two companies were healthy, strapping corporations. That was in 2000. Prior to that, in 1999, Philcomsat reported revenues of P268.19 million, netting P100.2 million. The following year, they did themselves even a little better, with gross revenues of P298.87 and a net profit of P121.75. Now, wouldn’t you be interested in such companies?

Anyway, when this group reportedly took over in 2000 in a flurry of events which would make another blockbuster in the style of Steven Spielberg, Philcomsat flopped on its butt and laid a stinking egg. From stellar performances just the two previous years ahead, Philcomsat reported a net loss of P71.9 million. Does one need good mathematics to figure out what in heaven’s name happened to these two layers of golden eggs?

If the government has a stake of 35 percent in POTC, what is our government doing to protect its interest in this company? 35 percent of a company that grosses almost P300 million is still hot property, but this much percentage in a company that bleeds to the tune of several millions a year? Now, maybe you can understand why they’re not so interested anymore?

The battle rages on between the PCGG and the minority group. But what of the others in these multi-million companies? Where do they stand?

With the glaring reversal of fortune in both companies, where does our government stand, given that the Philippine government has the largest blocks in both companies? Are we just going to let these companies bleed to death? In their death throes, do we see some illegally entrenched directors happily on their way to the bank, inebriated with a false sense of power simply because no one has righted a wrong?

It’s about time somebody sits up and takes notice. We’re not talking peanuts here. Just simply cluck-clucking at the uphill battle PCGG nominee Manuel Andal is faced with isn’t going to solve the problem. The problem is as much ours as the rest of the stockholders of these two companies, because Juan de la Cruz has the largest stakes in both companies. And Mang Pando can certainly use that money to put some food on the table.

Mabuhay!!! Be proud to be a Filipino.

For comments: (e-mail) businessleisurestar@stv.com.ph