Punish original sinners in SSS rotten deals

It doesn’t help Fernando Poe Jr. any if his spokesmen distort history to prove his Filipino citizenship. In disputing the 1936 marriage contract of FPJ’s dad Allan F. Poe to one Paulita Gomez, they say it is fake "because typewritten at a time when typewriters were not yet in use." For the record, journalist and later anti-Japanese spy Manuel Arguilla wrote a short story, "Caps and Lower Case," in 1938. It was about his newsroom typewriter.

Typewriters were in use in the Philippines much earlier. On page 218 of her book, Turn of the Century, Gilda Cordero Fernando ran an old photograph of students of the first school of typing, stenography and bookkeeping. Cornejo Institute was opened by Miguel Cornejo in 1908.

It’s the electric typewriter that was not yet in use at the time. Which is why a lawyer is suing FPJ for forgery in submitting to the Comelec an alleged electric-typewritten birth certificate of 1939, signed by the attending physician apparently with a modern technical pen.

The USAFFE war medal of Allan is no proof either of being Filipino. Hundreds of Americans, Chinese and Spaniards were also given medals for fighting the Japanese – without becoming Filipino.

It may be easy, meanwhile, for a pol to deny kinship, as Sen. Loren Legarda does with FPJ’s suer Atty. Victorino Fornier, through her chief of staff Ding Panganiban. But it certainly is amazing for a pol to disown a campaigner. For that could dishearten other supporters.

* * *

Trust Henry Sy to grab a good deal when he sees one. Trust the SSS (Social Security System) to grab a bad deal when it sees one too. And that’s what Sy’s purchase of the SSS’ 29-percent control in Equitable-PCIBank is all about.

A careful reading of the agreement between Sy’s Banco de Oro (BDO) and the SSS will show that it is a no-risk, high-yield bonanza. Up for grabs are 188 million shares of the SSS at P43.50 apiece, or P8 billion total. BDO will pay only P1 billion in cash. Balance is payable only after six-and-a-half years, with about 10-percent interest compounded annually, or about P13 billion. That P13 billion is in the form of zero-coupon bonds that BDO itself will issue and which the SSS cannot use to pay its own debts. Yet BDO immediately will take control of the huge block of shares, enjoy voting rights, and possibly earn dividends. The same shares will be used by BDO as collateral for the virtual loan at up to 90 percent of the market value. The discounted valuation is unheard of in banks, which usually recognize only up to 80 percent maximum.

This is how it looks from the SSS side. It first bought almost half of the 188 million shares from Equitable at P97 apiece, for P7.5 billion total, to help the latter buy PCIBank in mid-1999. Upon the Equitable-PCIBank merger, the listed price started dropping. To prop it up, the SSS gobbled up more shares. The buying strategy flopped. By the time the SSS had plunked in another 8.5 billion for the second block, Equitable-PCIBank was trading at only P86 per share. Still and all, its total investment in the bank was P16 billion, later adjusted in the books to P14.2 billion. It is now selling at only P8 billion.

That’s not all. The original P7.5-billion binge sapped the SSS of cash. To be able to pay retirees’ pensions and other members’ benefits, it had to borrow P7.5 billion from the short-term market. When the loan matured, it sold blue-chip shares in Ayala, San Miguel, PLDT and Meralco – in a rush and at hefty discounts. That meant more losses than the original P7.5 billion.

SSS president Corazon dela Paz justifies the sale to BDO by stressing a premium tag price for the huge chunk of Equitable-PCIBank. The P43.50 selling price is 30 percent higher than the P33.50 on the last trading day of 2003, December 30, when she also signed it. That’s better than the P16 per share when she took over as SSS chief in 2001.

Still, the operative word is "now". Why sell now, when Equitable-PCIBank share prices are rising? It zoomed 26 percent in 2003, and could rise higher for a better selling price. Dela Paz has a ready answer. The SSS would recover part of its money, which it can then use "to invest ... in safe, higher yielding instruments." Indeed, interest rates have been rising of late. Then again, if now is the best time to sell, why do it via secret negotiations with BDO instead of a public auction that could fetch a better price?

Dela Paz seems to be following the example of her predecessors in giving away the money of the SSS – money owned by 25 million members and merely administered for them by Malacañang appointees like her.

The original P7.5-billion thrown into Equitable in 1999 was fraught with anomalies. It was made at the behest of then-president Joseph Estrada, on the whisper of supposed financial genius of an adviser Mark Jimenez. The Government Service Insurance System was ordered to pitch in P1.3 billion too. Kickbacks of P780 million reportedly went to waiting pockets in Malacañang. Former SSS president Carlos Arellano and GSIS chairman Federico Pascual have never been made to account for it.

SSS top managers had justified the buy-in with false studies. They broke procedures in rushing the purchase. They then followed up the original sin with the mortal sin of wasting another P8.5 billion. Estrada’s appointees in the SSS board of trustees willingly covered up the misdeeds with stamps of approval.

Some of the managers and trustees have since retired. Most remain in the SSS, drawing hundreds of thousands of pesos per month in pay and perks, and continuing the coverup. Arellano’s replacement as president, Vitaliano Nañagas, had tried to bring up charges against the crooks. They averted it by agitating the SSS employees union to call for his ouster. Now, with dela Paz, they are trying to close that chapter by selling out to BDO.

* * *

Catch Sapol ni Jarius Bondoc, Saturdays at 8 a.m., on DWIZ (882-AM).

* * *

E-mail: [email protected]