Thursday, April 28, 2005

Reviewer 1 - Representations and Warranties

From the website of Pacific Plans before it was taken down.

With all of the sound and fury being generated by those who favor the rehab plan and complain about the selfishness of those fighting the rehab, it may be good to step back and look once again at basic principles underpinning this fiasco.

Preneed plans are financial instruments which are regulated by the Securities and Exchange Commission. As part of the regulatory process of the SEC, all methods and manner of selling to the public are scrutinized and pre-approved by them. This forms part of the "Truth in Advertising" doctrine so that investors are not misled or make incorrect assumptions when parting with their money as they make their investment decisions.

Brochures, advertisements, sales presentations of agents are representations made by the the issuer of the financial instrument. Many of the posters of comments in this blog have consistently recalled how some of their sales agents (who Pacific Plans is fully accountable for) used to talk about the financial integrity of the Yuchengco Group as well as the guaranteed features of their preneed plans. Apologists for YGC will naturally call this hearsay and unfortunate interpretations.

But we only need to look at the webpage above to see that the word "assurance" is used. For the lawyers, the words "assurance", "guarantee", "insurance", or "rely" have very specific meaning and obligations . This webpage forms part the SALES REPRESENTATIONS made by Pacific Plans and therefore Pacific Plans and SEC are fully aware of the what they were selling and the contractual obligations they were binding themselves to..

As many of you know, the Pacific Plans website was taken down almost immediately after the TRO was granted. Fortunately, through benefactors, we have been able to preserve key evidence such as this which shows that the planholders could not have misunderstood the guarantees being made by the sales agents.

60 Comments:

At Thursday, April 28, 2005 4:50:00 PM, Blogger Punzi said...

Of course, have some former and present sales representatives available to assist and testify for your cause, with their sales kits and brochures if possible...

Just some unsolicited advise.

 
At Thursday, April 28, 2005 5:27:00 PM, Anonymous Anonymous said...

When it comes to selling pre-need plans, any agent will say PPI will assure you of your kid's education no matter what because PPI is backed by Yuchengco Group of Companies. Now that PPI wants a rehab and won't be able to meet their obligations, they will use the fine prints as an excuse. It's like they are saying...you didn't read the clause close enough. In the end, we can't trust any companies anymore. If we lose, many pre-need companies will do what the Yuchengco's did. The bottom line here is that we trusted the company so much and assured our children that they can be in any school because we are secured with PPI. For the love of our kids, let us unite and give it a fight. We have made many sacrifices already. We all can't wait for 2010. Although the coalition mean well, many may prefer the PPI rehab and let's respect that. For those who won't agree with PPI rehab, let us work together and respect each other's views. Let's stick to issues and not personalities. We ought to listen to the positive and negative side so we can plan our strategies well. This fight is not only for PPI planholders, it is also for the planholders of other preneed companies who may plan to backed out of their obligations. Kudos to the organizers!

 
At Thursday, April 28, 2005 6:07:00 PM, Anonymous Anonymous said...

Let take a look at THE YGC VISION

We are a customer-focused group of companies.

We provide integrated, world-class products and services, delivering superior valu throughout the lives of our customers.

We are dynamic and professional organization, continously improving our competitive capabilities and fully responsive to the national interest and the needs of our stakeholders.

We work as synergistic team and build mutually rewarding partnership to sustain our growth.

We stand behind our commitment: Integrity and Service Excellence, aimed at enhancing the quality of life of our people.

THE BLUE HEXAGON SERVICE QUALITY CODE

We believe that customers are our reason for being. We listen to them and understand them. We offer them the best products and services.

We believe that to achieve this, we need to continously improve ourselves. We have to be more sensitive to their needs and wants.

We believe that teamwork will deliver this commitment. We value and help each other and the communities we serve.

We are YGC. This is our future. This is our battlecry: YGC=EXCELLENCE

Taken from the YGC book Title THE DRAGON IN THE EAST, page 171.

 
At Thursday, April 28, 2005 6:25:00 PM, Anonymous Anonymous said...

Boycot the YGC
RCBC BAnkard Inc.
EEI Corporation
House of Investment-Daiei Trading Company, Inc.
House of Investment- Eisai Pharmaceutical, Inc.
ipeople, Inc.
Izuzu-Manila, Commonwealth Branch
Malayan Reinsurance Corp.
Malayan Zurich Insurance Comp.
Mapua Institute of Tech.
Nippon Life of the Philippines,Inc.
Lifetime Plans
Philrock Inc
RCBC Forex Brokers (RCBC Forex)
RCBC Savings Bank
Tokio Marine Malayan Ins. Co.
Yuchengco Center for East Asia(De La Salle University)
Honda
Grepalife

 
At Thursday, April 28, 2005 6:44:00 PM, Anonymous Anonymous said...

Beware of the pro-rehab party of enlightened planholders. They intentionally used the "PEP" to confuse the Coalition PEP anti-rehab. If they really have only a difference of opinion, why would the pro-rehab intentionally use the name of PEP to confuse the coalition members.

Please judge for yourself.

God Bless.

 
At Thursday, April 28, 2005 7:40:00 PM, Anonymous Anonymous said...

I dont like to understand what Pacific is saying that the deregulation of tuition fees in 1991 caused them not to be able to pay for the tuition of our children right now!!!

My God, way back in 1991 they knew what is happening now is bound to happen. They have preapred for this scenario by discontinuing the sale of tradition plans. WHY THEN ARE THEY HIDING BEHIND THIS GOVERNMENT PROVISION NOW...

They should have informed us of this in 1991 and offered us an option back then. BUT THEY DID NOT!!! For 14 years, they made us believe that they would pay for my daughters college education, and now 3 weeks before enrollment period, just when our 14 years of waiting to avail of our plan - this happens.

I will not buy the explanation that way back in 1991, they thought they could sustain bec they stopped selling na nga, eh so ibig sabihin, hindi na kaya. ANG GALING NYONG MAKIPAGLOKOHAN -- YNG NAGTIWALA BA INYO ANG NILOKO NYO.

MGA MAGULANG RIN KAYO KAGAYA NAMIN. ANG KAIBAHAN NGA LANG, KAYO KAYANG KAYA NYONG PAG ARALIN ANG MGA ANAK NYO NA WALANG EDU PLAN NG PACIFIC... KAMI NAGTIWALA SA INYO, PERO NILOKO NYO KAMI!!!!!

 
At Thursday, April 28, 2005 8:07:00 PM, Anonymous Bing said...

To pep coalition

scan and send images? I can even give to the coalition the yuchengco book entitled Dragon in the East. My whole support.

 
At Thursday, April 28, 2005 8:16:00 PM, Anonymous Bing said...

PPI are not paying initial availment of those scholars whose age 16. Kasalan ba ng bata kung kung capable siyang mag-aral ng maaga or accelerated siya? Kagaguhan di ba? Contract stated that; you can use the plan once it is fully paid!!!!

 
At Thursday, April 28, 2005 8:19:00 PM, Anonymous Anonymous said...

me mad and angry

 
At Thursday, April 28, 2005 9:11:00 PM, Blogger lando said...

Although we believe in legal battle vs. pacific mgt. we suggest rally in front of RCBC. legal battle may exceed even up to 2010 or which maybe infiltrated by pacific deep penetration lawyers. Rally bu planholders and scholar surely would take swift reaction from pacific or elase may result to negative image,hopefully not bank run, to RCBC Yuchengco's major business.
Let us attend the first hearing at Makati RTCand then proceed to RCBC on May 25, 2005 with our family wearing black arm band.
For legal option, Pacific have money and lawyers...,for rally we have the number--23,000 scholars and the parents, many of whom wanted to contribute with fight against Yuchengco.

 
At Friday, April 29, 2005 7:28:00 AM, Anonymous TLS said...

Just saw the dong puno live show this 1-2 am. Kudos to Winnie and especially Philip for staying on course and not being misled and redirected by the napaka-habang, walang kabuluhang pinagsasasabi ni Garcia (and he’s supposed to be a ceo?) that was only meant to push their rehab plan and extol the “virtues” of PPI and Yuchengco management in trying to come up with an “equitable solution” in light of an imagined liquidity problem that only PPI/Yuchengco management created in the first place.

It was a shaky start, with the team having to sit and listen to Garcia’s ramblings about discount rates and inflation-proofing and following that line of discussion but at least for the rest of the show, the critical points were made.

TO ALL PLANHOLDERS, AVAILING AND NON-AVAILING, MAKE SURE YOU KNOW AND UNDERSTAND THESE:

1) the basic and most important premise is that PPI/Yuchengco broke its contractual obligations by manufacturing a liquidity problem and then running for protection through a petition for rehabilitation
2) there is NO BASIS for discussion about a rehabiliation plan, much less the PPI/Yuchengco offer for conversion of their obligation into something else that has even less chance of being paid. ANG HINDI NAIINTINDIHAN NG MARAMING PLANHOLDERS, AVAILING OR NON-AVAILING, NA NATUTUKSONG TANGGAPIN ANG OFFER NG PPI/YUCHENGCO AY KAYA BAYARAN NG PPI/YUCHENGCO ANG OBLIGATION NILA NGAYON AT MAGING SA MGA DARATING NA TAON.
a. Mali na sabihing isu-subsidize ng non-availing ang availing planholders dahil ang lahat ng plano ay may katapat at angkop na pondo sa trust fund. Ngayon, ang anumang pagkukulang, KUNG DARATING MAN (dahil tandaan, until 2004, PPI had the highest or was in the TOP 3 in terms of Trust Funds and did not have any Trust Fund deficiencies), ay isu-subsidize DAPAT ng PPI/Yuchengco, HINDI ng sinumang planholder, availing or non-availing.
b. PPI/Yuchengco has almost 100 branches (at least bago nila inilipat ang titulo nito sa Lifetime Plans). Their operating expenses were bloated (again bago nila inilipat ang lahat ng empleyado sa Lifetime). On the closure/sale of branches/real estate alone, marami silang operating cost savings na dapat isinagawa kahit na WALANG LIQUIDITY PROBLEM. This is just another sign of mismanagement.
c. AT ANG REHAB PLAN AT 2010 OFFER NG PPI/YUCHENGCO AY WALANG KABULUHAN AT BISA. HINDI ALAM NG MARAMING PLANHOLDER NA KAPAG PINASOK ANG ISANG REHAB PLAN AT TINANGGAP ANG 2010 OFFER, PAGKAKATAON LAMANG NG PPI/YUCHENGCO NA PAHABAIN ANG PAGDURUSA NG PLANHOLDERS. WHY? BECAUSE THEY WILL HAVE THE LEGAL BASIS TO DRAG THIS ON FOR YEARS. HOY PLANHOLDERS! GISING! WALANG REHAB PLAN NA MADALING BINAYARAN ANG MGA CREDITORS. MAHABANG NEGOSASYONAN LAHAT IYAN. IN THE MEANTIME, “SITTING PRETTY” ANG PPI/YUCHENGCO. BALIK TAYO SA BASIC PREMISE NATIN: WALANG BASEHAN ANG REHAB PLAN AT 2010 OFFER NG PPI/YUCHENGCO. THEY DID THIS TO DEFRAUD PLANHOLDERS, BREAK CONTRACTUAL OBLIGATIONS AND COVER UP THEIR MISMANAGEMENT OF PLANHOLDERS’ FUNDS AND POOR FORESIGHT. ON NO TERMS SHOULD THE REHAB PLAN BE APPROVED, FOR ALL PLANHOLDERS.
3) It finally came from Tecson and Garcia: PPI/YUCHENGCO MADE A BUSINESS DECISION AND CHOSE TO DISENFRANCHISE (sa madaling salita – “eche puwera”) A MINORITY (para sa kanila) GROUP OF Traditional Educ. Plan PLANHOLDERS. Di na baleng mawala ang mga karapatan nitong mga planholder na ito. Ito daw ay para pangalagaan ang karapatan ng mas maraming Fixed Value planholders. SO KUNG PAGTUTUHOG-TUHOGIN NATIN LAHAT, THEY MADE SO MANY CONFLICTING AND SELF-INCRIMINATING STATEMENTS. LUMALABAS THAT, REALLY, IT WAS A SIMPLE “CUT LOSSES” BUSINESS DECISION. NGAYON, KAHIT SAAN MO TIGNAN IYON, MALI ANG PAMAMARAAN NA GINAWA NILA – WHICH WAS TO MANUFACTURE A LIQUIDITY PROBLEM AND COMMIT FRAUD (lawyers, you can even check your bankruptcy laws) BY ILLEGALLY TRANSFERRING ASSETS OUT OF PPI.
4) In fact, there really should be no basis for the court to issue that stay order and freeze PPI’ assets and prevent the payment of Planholders’ benefits. In the first place, PPI’S TRUST FUND IS NOT PPI’S ASSETS. PLANHOLDERS’ ASSETS ANG LAHAT NG NASA TRUST FUND. PPI IS ONLY THE “AGENT” OR LEGAL ENTITY NA BINIGYAN NG PLANHOLDERS NG KARAPATAN NA HAWAKAN ANG PERA NITO AT ILAGAY SA ISANG POOLED FUND “IN TRUST” PARA PALAGUIN. IT IS NO DIFFERENT FROM A PLANHOLDER GOING DIRECTLY TO A TRUST DEPT. OF A BANK OR FUND MANAGER, PLACING FUNDS AND GIVING THE TRUST OR FUND MANAGER DISCRETIONARY AUTHORITY TO INVEST THESE FOR A TARGET YIELD. THE PRE-NEED COMPANY JUST PROVIDES THE ADMINISTRATIVE OR BACKROOM SUPPORT TO FACILITATE PAYMENTS OUT OF THE TRUST FUND TO THE SCHOOLS OR PLANHOLDERS. BUT IN ESSENCE, IT REALLY JUST HANDLES THESE PLANHOLDERS’ FUNDS WITH THE FIDUCIARY RESPONSIBILITY OF GUARANTEEING EITHER A FIXED RETURN OR A RETURN AS DETERMINED ANNUALLY BY THE MARKET (MEANING THE SCHOOLS). Not a exact analogy but PARANG FLOATING RATE LOAN YAN NA REPRICING EVERY YEAR BASED ON MARKET, NA DAPAT BAYARAN NG UMUTANG, REGARDLESS KUNG ANONG RATE YUN.

TLS

 
At Friday, April 29, 2005 7:39:00 AM, Anonymous Anonymous said...

Here's a copy of an email from a bank employee regarding RCBC. I have removed/edited any reference to the person and the bank for his or her protection. Good for them!

=======================

I do not mean to cause any jitters or panic, but it seems there are beginnings of a bank run at Rizal Commercial Banking Corporation
(RCBC). This has stemmed from the declaration of illiquidity of Pacific Plans, Inc. Apparently, RCBC may have been directly affected in spite of their denials. Our branches have been reporting large fund transfers from RCBC branches, including confirmed transfers to our Trust operations from RCBC Trust. As a matter of caution, it may be prudent and wise to move your funds elsewhere if you have them at RCBC before this whole thing snowballs and goes out of control. There are also merger rumors ongoing between our bank and RCBC. Apparently, the latter approached us offering to sell their shares, according to my Treasury sources. For your information.

 
At Friday, April 29, 2005 7:40:00 AM, Anonymous Anonymous said...

TLS, I understand what you and MOST of the bloggers here are saying. I've just been waiting things out to see what would come out of it. And from what I saw last nite, both the coalition and the Garcia-guy are arguing about two different things. And after watching, my stand is this: I AM NON-AVAILING, and I do not want to subsidize plan holders like you. SORRY. I'll take their offer. I WILL NOT RISK IT IN COURT.

 
At Friday, April 29, 2005 7:45:00 AM, Anonymous Anonymous said...

This comment has been removed by a blog administrator.

 
At Friday, April 29, 2005 9:12:00 AM, Anonymous Anonymous said...

For those calling for the downfall of the Yuchengco companies, let me ask you, what will happen to the Yuchengco employees and the Yuchengco business partners like the suppliers? Can our economy take this?

I think you guys are becoming irrational.

 
At Friday, April 29, 2005 9:16:00 AM, Anonymous Anonymous said...

To that bank employee making kalat about the transfer of funds from RCBC to his/her bank. Ingat ka lang. Baka tamaan ka ng kidlat for making those irresponsible statements. Baka kasuhan ka ng economic sabotage. Sa totoo lang, if what you were saying is true, bakit no mention about which bank you belong to?

 
At Friday, April 29, 2005 9:33:00 AM, Anonymous ULTRA TECHIE said...

To Bank Employee,

With what you posted, RCBC can now use the NBI to go after you and cite malicious statements encouraging economic sabotoge. Even if this site has no site statistics, blogger has. They can now request blogger to look at your ip address and then look you up here.

Don't underestimate the NBI. Remember the case a few months wherein they traced someone to an internet cafe and found the person who sent a malicious e-mail. If you are a competitor, it can be easily traced to you.

Pray that NBI doesn't go after you (or your bank).

 
At Friday, April 29, 2005 10:23:00 AM, Anonymous Anonymous said...

I watched Dong Puno and Debate last night with my scholars. After both shows, I felt confident that we can overcome the stay order. Of course, we should still be vigilant.

These were the important points I noted :

1). When the PPI lady atty. mentioned about their exit clause, Atty. Dong Puno said the word "estop" or a similar sounding word. If I'm not mistaken, I think this means that PPI's inaction in the last 12 or so years was tantamount to their waiver of this exit clause. Therefore, its useless for them to use this as defense.

2). When our Atty. Piccio mentioned the transfer of PPI assets not once but 3 times to different companies that caused the artificial liquidity problem of the present PPI, Atty. Dong Puno interpreted this attempted cover-up as FRAUD.

3). Mr. Orbos in Debate in his final statement / analysis said that the planholders are not in fault. The gov't must bailout PPI to protect the planholders and later go after the troubled company.


I think we should start planning beyond the lifting of the stay order. (eg. ask the SEC to return all plans and asset to PPI) so that we can evaluate the true financial condition of the whole pre-need operation of YGC.


Clearly, the Yuchengcos took advantage of the weakness of the SEC.

To the SEC : it is not too late to redeem yourselves. Help us planholders by returning the assets taken away from PPI back to PPI.

 
At Friday, April 29, 2005 10:28:00 AM, Anonymous Anonymous said...

To the prorehab and pro-Yuchengco group,
Like we said, you have your own blog now. Why don't you go and post there and stop bothering us? Or are you afraid nobody will read your post there? And hey, did you notice the incredelous and disgusted look of Winnie Monsod when she found out everything is in NAPOCOR bonds?

To the true PEP Coalition,
I'm so proud of you guys!!! I watched Debate and caught the last part of Dong Puno. You were great!

 
At Friday, April 29, 2005 10:43:00 AM, Anonymous marc said...

Well done, tls!

I should add that in the Dong Puno live show (I wasn't able to catch the Debate show on TV), Atty. Pecson stated categorically that the problem of Pacific Plans was illiquidity. Yet, after a few exchanges, I caught her saying that there were deficiency problems caused by deregulation. Well, even Mr. Garcia was challenging us if it was a good idea for the fixed benefit planholders to subsidize the deficiencies of the open-ended plans. So there are deficiencies! When were these deficiencies addressed? I thought this was an illiquidity issue? You are also right when you say that it should be the company that should pay for any deficiencies, not the other planholders...

Tsk, tsk, we should get copies of Dong Puno Live and get permission to distribute it in CD form to all concerned about the truth of the matter.

 
At Friday, April 29, 2005 10:45:00 AM, Anonymous Southridge dad said...

Bo Chanco couldnt have said it better in today’s Phil. Star. Yuchengcos better stick to the original agreement if they still intend to do business here. It will be a disaster to the YGC group of companies. My dad has spoken so highly of you which made us decide to buy (more than 10 both with PPI and Lifetime) because of the old mans name. I brought up this problem with my dad and up to now his kept his silence. He couldn’t believe it can happen under the old mans watch. To Mr. Yuchengco . What have we done to deserve this. If any of the Yuchengcos are around please we need an explanation but not the one your officers are floating around , it doesn’t make any sense.

I saw both shows last night but unfortunately the more PPI officers answer (although they were a no show in Pare and Mare) the more it doesn’t make sense. If its liquidity, then why transfer the assets to another company. If its deregulation of tuition, then why not inform us as early as the mid 90’s so everybody would have taken a cut. If its protecting the planholders of other plans, then why not inform the affected parties first before doing it behind everybodys back.

God Bless

 
At Friday, April 29, 2005 10:51:00 AM, Anonymous Anonymous said...

Those posting as pro-rehab or pro-yuchengco group i think those are the ones on the side of pacific plan in the show. And I think some of them are agents, ang kakapal ng mukha nyo after all na nangyari kayo pa ang may ganang magalit e samantala kumita din kayo in terms of commission sa policy na nabili namin.
The least you can do right now is to show compassion. ANG KAPAL TALAGA!!!

 
At Friday, April 29, 2005 11:28:00 AM, Anonymous mrcruz said...

Its a pity that this Garcia and Tecson are allowing themselves to be used by PPI. Perhaps, they wanted their contracts renewed and need to prove themselves to management before their contracts are renewed. (remember: they both admitted that they have a six-month contracts in yesterday's don puno live show).

The most important thing is to stay together and stay focus on our cause. We can win this battle. Let us continue to pray that we can have the resiliency.

God Bless us all!

 
At Friday, April 29, 2005 11:44:00 AM, Anonymous Anonymous said...

After watching the dong puno show, I was still undecided what is the best option for me.

I got to talk to my friend in the insurance business, and he gave me a totally different picture of what happened last night which totally opened my eyes.

Dong Puno was a director and a significant SHAREHOLDER, until 2? years ago, of Petplans which also sold traditional plans until recently. My friend found it funny who he acted as if not knowing anything about the industry. It seems the Petplans has major deficiencies in their trust fund as well.

My friend mentioned that other pre-need companies are utilizing this venues to veer attention way from them and to make sure that the rehab plan is blocked. Why? This companies won't be even be able to return original money put in by the planholders.

Pacific Plans was the only one who got out early. All the others were too late to stop selling.

Therefore, I will now base my decision not on these websites but upon my own interpretation of options.

Good Luck to Coalition.

 
At Friday, April 29, 2005 12:52:00 PM, Anonymous Anonymous said...

Today's Cocktales column carried a supposed proposal from the YGC group. That new proposal is UNACCEPTABLE to me. Why should I be forced to enroll my kids at Mapua??!!

 
At Friday, April 29, 2005 12:59:00 PM, Anonymous Anonymous said...

From Boo Chanco's column:

"The Pacific Plan fiasco is a good case study in crisis management. How the Yuchengcos react, how they finally resolve the problematic situation will determine the level of trust the public will have on them as managers and guardians of people’s money in their banking and insurance businesses. The family has been eerily quiet for now.

While a Pacific Plans official told the ABS-CBN News Channel the Yuchengco Group of Companies will help Pacific Plans if only to keep the integrity of the other business units intact, he was unclear what form the assistance would take. It seems nothing short of direct infusion of fresh funds would be required to bail out Pacific Plans. While using resources of RCBC, for example, is not legally possible, nothing should stop the Yuchengcos from using family resources to rescue family honor that is now at stake.

Forget the legal aspects of the case for the moment. Forget even the money aspects in the short term. This is a public relations catastrophe, with very serious marketing implications moving forward. Pacific Plan itself is not as important as the Yuchengco brand name.

I am reminded here of the Tylenol case, a classic PR and marketing crisis management case study. Some psycho poisoned some Tylenol tablets and planted the product in a drugstore in the American Midwest some decades ago. I don’t remember the specifics of the case but I recall that there were at least one, maybe two deaths as a result of the adulteration.

Johnson and Johnson, disregarding the amount of money involved, ordered the recall of all Tylenol products still in the market all over the United States. This dramatic show of concern for the welfare of the consumer won it the respect of the public and eventually helped Tylenol recover as a brand. Money is not the issue. Lawyers are not the issue. Consumer safety is.

In the same way, the Yuchengcos must be aware by now, that at stake in this crisis is not Pacific Plans but their very ability to remain in a business that demands the total trust and confidence of consumers. For all we know, Pacific Plans may have followed the right legal procedures in filing for rehabilitation, but the public will judge the Yuchengcos based on how they take care of their clients. This is what the crisis is all about.

There is no doubt that Pacific Plans is a Yuchengco company. Its logo is the familiar logo shared by Yuchengco companies, like the very profitable and very solvent RCBC, Malayan Insurance, Great Pacific Life and a host of other companies. The trust and confidence the Yuchengco brand name enjoys was built through the years and its market value must certainly exceed the P300 to P600 million that is being quoted as the funds Pacific Plans need to get back on track and fulfill its obligations to clients.

It is also clear that in the case of education plans Pacific Plans promised to pay the cost of education, whatever it might be at the time the planholder needs it. So Pacific Plans as with CAP and many other education plans made some very wrong assumptions. Who could have predicted the Asian financial crisis? Who could have thought that government would deregulate tuition fees? But all that is beside the point. A promise was made and it must be fulfilled.

Making good on the promise is also socially important because the planholders are essentially from the middle to lower classes of society and have no other alternative to finance their educational needs but those easy to pay plans. A default has adverse impact on the trust our common people would have on our financial institutions and government.

If the Yuchengcos know what is good for them in the long run, they would make good on the promise, no matter what it would cost them now. That’s the only way they can protect the Yuchengco brand name, on which in turn, depends their bread and butter businesses in banking and insurance.

As it is, there seems to be an ill-advised concerted action to precipitate a withdrawal of confidence on their other businesses through text messaging. If text messaging can bring down the Erap administration, it can bring down a business empire. The argument seems to be, if the Yuchengcos appear to have financially mismanaged Pacific Plans, how sure are we that the banking and insurance businesses are not in the same predicament? Only decisive action from the Yuchengco Group can save the entire conglomerate from the after effects of this crisis.

I see the Yuchengcos with having more to lose in a failed Pacific Plan than the Sobrepeñas in a failed CAP. The Yuchengcos, unlike the Sobrepeñas, have a record of financial success and public service. It would be a pity to see all that hard work of the venerable Al Yuchengco and his ever dependable daughter Helen, go down the drain. I am sure the value of what they have accomplished is worth more than P300 or even 600 million, specially in terms of future value.

The other thing I worry about is the loss of confidence people would have on investment instruments in general. Pinoys have a low savings rate and for some reason, education plans are just about the only formal savings and investment plans that ordinary Pinoys have put their trust on.

If they cannot trust the respected Yuchengco name, how can they trust any of the others? In fact, some of the planholders are saying they bought their education plan from Pacific Plans precisely because of the seal of guarantee the Yuchengco name offers. Itaga mo sa bato, so to speak.

This crisis of confidence, first with CAP and now with Pacific Plans, could make it more difficult to develop a capital market here with broad based participation, a pet dream of top RCBC official and former Prime Minister Cesar Virata. That would set back our economy’s ability to finance its growth through domestic capital formation.

I hope the taipan and statesman Al Yuchengco sees the big picture here and does what is right to protect his legacy, his brand name and the Philippine financial market. Masakit man, kailangan panindigan. It’s that simple, assuming of course, they still plan to do business in this country.

 
At Friday, April 29, 2005 1:26:00 PM, Anonymous Anonymous said...

Pareng Oca's closing statement on his show last night hit the nail head on: this PPI fiasco is not just a Yuchengco crisis---it could very much turn into a confidence problem for the entire pre-need/insurance industry.

Pareng Oca's analogy of the US Savings & Loans crisis rings true: the government must bail out PPI or at the very least rectify this problem immediately before it causes the collapse of the entire industry, which would have serious repercussions on the whole RP economy. The government should then run after the erring parties to punish them and recover the funds used for the bail out.

 
At Friday, April 29, 2005 1:37:00 PM, Anonymous Anonymous said...

In last night's Dong Puno Live, I was spcially proud of how our Atty. Piccio's closed the show with his final statement. After all the ramblings of Garcia & Pecson about the 7% return and discounting and liquidity problems and deregulation and fortuitous events---Atty Picson looked both of them in the eye and said with conviction: Yes but remember YOU broke the contract, not US!" That, I believe sums up this whole problem and represents the battle cry we should all rally behind.

 
At Friday, April 29, 2005 1:55:00 PM, Anonymous Anonymous said...

In either the Inquirer or Star, Pacific Plans has an ad on how they intend to settle our claims. I suggest somebody cite specific figures ( a concrete example) to show what their figures really mean and post this in the blog because the percentages they cited looked very "reasonable" but when translated to real terms will see planholders shortchanged pa rin.

Another thing, last night at the show of Dong Puno, Garcia and Tecson constantly invoked the deregulation of tuition fees as the reason why they could no longer service our plans as promised. But was that not the precise selling point of their plans -- that regardless of cost of tuition upon availment, the parents need not worry as PEP would take care of the tuition? How inconsistent can they get?

 
At Friday, April 29, 2005 5:29:00 PM, Anonymous Anonymous said...

Did you notice that while PPI is saying that they will pay in Year 2010 at 7% interest, in reality, PPI is offering negative, repeat, negative interest. All you need to do is look at your respective letters sent by PPI.

In my case, my high school scholar has availed of P70,014 in his 1st year. PPI estimates availments in the next 3 years at the same amount (completely ignoring possible tuition fee increases). Now, Pesos 70,014 for 3 years will amount to P 210,042. Deducting the P 35,000 tuition support, the resulting PPI obligation amounts to P175,042 over the next 3 years. Compare this amount to PPI’s computed Maturity Value on July 31, 2010 of Pesos 145,400.

If I am entitled to P175,042 in 2005-2007, and PPI delays these payments to 2010, and considering that there is an interest earning of 7%, shouldn’t the amount increase? Yet, PPI is going to reduce, not increase, the amount by giving only P 145,400 in year 2010.

It is easy to compute the correct maturity value in 2010. The P35,042 due in 2005 will earn 7% interest per year over 5 years to 2010. The P70,042 due in 2006 will earn 7% interest per year over 4 years to 2010. The final P70,042 due in 2007 will earn 7% interest per year over 3 years to 2010. The total of all these, or the correct maturity value in 2010 is P226,653. This is 56% higher than what PPI would have us believe as the proper amount.

How is PPI trying to hoodwink us into accepting their erroneous computation? Their method, as shown in their letters to us, is to multiply the amount of their future obligation by a low number, in my case by 64%. This is supposed to “de-escalate” their future obligations to 2004 values (not 2005), by assuming an interest rate, according to my computations, of over 20% per year. Then, they escalate the supposed 2004 value by 6.5% every year (not even 7%) up to 2010.

What is the concept behind PPI’s computation? The “de-escalation” to 2004 values is like theoretically advancing payments to us, and for that we are paying PPI over 20% interest per year advanced. (Note that even if the money is already due today in 2005, PPI is able to de-escalate by choosing 2004 as base). On the other hand, when the payment is delayed from 2004 to 2010, PPI is offering only 7% (I compute only 6.5% in their formula).

What crazy method is this? When PPI theoretically advances the amount to us, we pay them over 20%, but when PPI actually delays payment, they give us 6.5% interest.

While the delay in payment is in itself unacceptable, PPI even tries to cheat us by reducing the delayed amount by a very large percentage.

 
At Friday, April 29, 2005 5:54:00 PM, Anonymous Anonymous said...

This comment has been removed by a blog administrator.

 
At Saturday, April 30, 2005 1:36:00 AM, Anonymous Anonymous said...

You guys were great in both dong puno live and debate! you made the pacific rep. in dong puno spill out valuable info. Kudos to all of you!! Just a word of caution, that garcia guy is trying to pit the availing and non availing against each other, saying that they will have to subsidize the avaling planholders, etc. trying to cover up their fraudulent transfer of assets and greed. We should stay vigilant! continue the tx messages letting as many people know of the devious methods the yuchengcos are applying to their businesses. They may hawak the judge and govt agencies, but they cant hold the outrage of the public which can destroy even the biggest business empire.again thanks to you people who are fighting for our rights! we really appreciate it even if we dont personally know you. God bless you all!

 
At Saturday, April 30, 2005 4:59:00 PM, Anonymous Anonymous said...

it is very clear that we pays for an educational plan for which ppi has gauranteed to pay "no matter what the cost", there is not a singLE government policy that was to introduce to restrict or expand this commitment, so what is ppi telling us, they said that government deregulate the tuition fee limitations, this has nothing to do with our contracts, otherwise if they would accept the ppi reasoning, ppi might as well includes in their position that there are many laws that were pass from 1992 up to present, the governement allows the peso to devalue from 1992 up to the present, oil deregulation law was passed, etc. clearly ppi is just trying to escape its obligation and it seems they are doing it quite well, but to those agents and its newly hired president and lawyer, how much are you paid, it would have been better that the money that was paid to you to promote a rotten alibi was instead used to pay us planholder and asked those wise guy, the real owners to meet us face to face, they are afraid that they cannot protect their own ass, that is why they hire other people to do for them

 
At Monday, May 02, 2005 5:54:00 AM, Anonymous Anonymous said...

It is plain and simple. PPI/Yuchengco is using the rehabilitation law to avoid payment of their Obligation to traditional education plan holders. Nasa kanila na ang ating pera, eh bakit pa nila ibabalik sa atin to?

The letter of PPI about their plans to convert our trad plans to fixed value plan is a legal document. We must answer them back, also in writing, that we are rejecting the offer. Di sapat na tayo ay nakasama lang sa coalition.

I am confused on our dates: When are we going to show up at the Makati RTC to object rehablitation plans?? Is it May 16, May 25 or May 26? Sorry guys, i do not want to miss this, so will somebody pls. advice?

God works in myserious ways, like David of Goliath!
Ang lakas ng walis tingting ang ating ipaglaban!

 
At Monday, May 02, 2005 10:45:00 AM, Anonymous Anonymous said...

if you have a yahoo address go to no2pep2010 in yahoo groups. Some interesting stuff in the files section. spread the word.

 
At Tuesday, May 03, 2005 2:15:00 PM, Anonymous Anonymous said...

We continue to honor our obligations

Posted 08:08am (Mla time) May 01, 2005
By Ernesto Garcia
Inquirer News Service



Editor's Note: Published on page A16 of the May 1, 2005 issue of the Philippine Daily Inquirer


AS emotions subside, people would view Pacific Plan's actions since 1990 as one continuing commitment to honor its obligations.

So let us go back to 1990, the year all open-ended education plans were in effect doomed by a radical change in government policy: from capping tuition increases to no more than 10 percent to allowing unlimited increases.

That stroke of deregulation was the single biggest cause of the problems PPI and other similarly situated pre-need companies now face. The degree of their present problem is a function of how management reacted then.

PPI reacted prudently when it stopped selling the open-ended plans in 1992, two years after partial deregulation and two years before the 1994 full deregulation. The handwriting was on the wall and it took heed. Still, PPI had roughly 90,000 open-ended plans sold from 1986 to 1992.

PPI paid all the tuition claims, regardless of amount, in the past 14 years although its contract explicitly freed PPI from paying the extra costs. Early this month, it went to court to seek suspension of payments and approval for a rehabilitation plan.

When PPI did this, it was accused of a lot of things. But did it really renege on its obligations? Don't the Yuchengcos and their other companies have the moral obligation to pay? Did PPI cheat its plan holders when it spun off its fixed-value plans? Was PPI unfair to its plan holders? Very simply, why doesn't it just pay?

To put things in perspective, everybody must realize companies with open-ended plans have a problem and it was beyond their control.

Deregulation was a ticking time bomb. Companies with the most number of open-ended plans will suffer the most. No company could match, much less surpass, with limited income the unlimited yearly increases the schools were charging.

PPI does not have the most number of these plans but it is the bravest to face its problem squarely and to provide a solution. It is a controversial solution to those affected, but PPI will be vindicated sooner than later that it did right.

What did PPI do right? Let us count the ways.

1. PPI stopped selling these plans in 1992. That was one move that proved critical because it was able to contain the injury. The more of these plans a company has, the worse off it is.

2. PPI has not exercised its right under Section XV of its contract. It could have taken legal cover from this but so far it has not.

3. PPI put in P1.5 billion to pay the runaway tuition. This is one reason it paid in full all tuition claims in the past 14 years. It has so far sent to school 56,000 scholars and at most 18,000 are not yet availing themselves of the benefits-a modest number by industry standards mainly because of No. 1.

4. PPI sold instead fixed-value plans, where benefits are defined. PPI sold more than 400,000 of these. But it eventually had to put these in a separate company because the 34,000 open-ended plans continued to be voracious eaters of corporate funds. It separated the two types of plans through a spin-off, a perfectly legal action that is done all over the world. Without this move, the whole body of fixed-value and open-ended plans would have suffered. So why not take steps to keep the 400,000 healthy?

5. Even before this, PPI wrote many schools to buy thousands of scholarships for its beneficiaries and pay in advance the whole four-or five-year courses. Not one agreed to the offer of a 10-percent annual increase. PPI pleaded. It failed.

6. PPI bought back plans but the secondary market, which it has no control of, has brought prices to unreasonable levels.

7. After the spin-off, PPI was left with the 34,000 plans. It had looked for ways to limit liability on the open-ended plans by offering to swap them with fixed-value plans. But time was not on its side. Enrollment was creeping in fast. It had more than P300 million in cash left and $52-million worth of government-guaranteed bonds that would mature in 2010. Of the 34,000 plans, 16,000 are due for enrollment; the rest, the majority, would be due to file in the coming years and obviously would be disadvantaged if assets are liquidated now. Something must be left for them.

8. So PPI went to court early this month. While it sought for suspension of payment, it asked the court to allow it to use its remaining P341 million in cash to support the tuition needs of the 16,000. PPI knew it had to help pay the tuition because it is enrollment time.

9. PPI proposed to return all the premium payments plus seven percent net compounded interest to the 18,000 non-availing plan holders. For the 16,000 who are already availing themselves of the benefits, PPI offered tuition support, which is part of the discounted balance of remaining "availments," plus seven percent net compounded interest that they are entitled to. All these depend on the court approving its rehabilitation plan.

10. If some opponents succeed in blocking the rehabilitation, PPI would likely be forced to Square One with all the problems and no solution, or into liquidation and sell its $52-million worth of bonds before maturity. If sold now, these bonds would fetch P550 million less than if they are redeemed by 2010. This loss, all plan holders must absorb.

PPI has done more as an exercise of its obligation, legal and moral, to its plan holders. When the time bomb ticks its last, PPI will be remembered as the company that offered to return the plan holders' money plus more while it still could, and took a lot of beating for a misunderstood but correct decision.

(Garcia is the president of Pacific Plans Inc.)

 
At Tuesday, May 03, 2005 4:20:00 PM, Anonymous marc said...

"10. If some opponents succeed in blocking the rehabilitation, PPI would likely be forced to Square One with all the problems and no solution, or into liquidation and sell its $52-million worth of bonds before maturity. If sold now, these bonds would fetch P550 million less than if they are redeemed by 2010. This loss, all plan holders must absorb." - by Ernesto Garcia

Wow, how glib! "Would fetch 550 million less that if they were redeemed by 2010"...Are you saying, Mr. Garcia, that the difference between the market value of zero coupon bonds with the par value of these same zero coupon bonds is a loss? You are comparing MARKET VALUE WITH PAR VALUE, DID I GET YOU RIGHT? But perhaps your arguments are correct.

If so, then let's all borrow 10 million cash from RCBC, buy a 10 Million par value, deep discount zero coupon bond maturing in 2010 (say, with market value of 9 Million), transfer all of our real assets (save for the zero) to another company, file for rehabilitation for the original company and tell RCBC to accept our 10 Million par value bond maturing in 2010 because we have liquidity problems (it's a zero coupon bond, after all).

Hey, and don't liquidate the 9 million now, after all, you lose 1 million if you get it now so why not wait until 2010 and get the par value.

Ha!

 
At Wednesday, May 04, 2005 4:53:00 PM, Anonymous TLS said...

What did PPI do WRONG? Let us count the ways.

1. PPI stopped selling these plans in 1992. That was one move that proved critical because it was able to contain the injury. The more of these plans a company has, the worse off it is.
FIRST OF ALL, TRADITIONAL PLANS ARE NOT THE PROBLEM. WHILE IT IS TRUE THAT TUITION FEES WERE DEREGULATED, WHAT NEEDS TO BE ADDRESSED IS THE REVENUE-COST MODEL USED. (Ta-tagalogin ko para madaling maintindihan) DAPAT ISINA-AYOS NG PPI/YUCHENGCO ANG COST MODEL NILA (IBIG SABIHIN, IBINABA DAPAT ANG COMMISSION STRUCTURE AT OPERATING EXPENSES PARA MAS MALAKI ANG MAILAGAY SA TRUST FUND. EVEN IF THEY HAD CONTINUED SELLING, HINDI PROBLEMA IYON KUNG IA-ADJUST ANG COST MODEL. ALSO, THE REVENUE MODEL OR PRICING COULD BE ADJUSTED TO FURTHER COMPENSATE FOR HIGHER TUITION FEES.
ALSO, PPI IN ALL THOSE PAST YEARS HAD HIGH OPEX (OPERATING COST TO REVENUES) RATIOS. THEY SHOULD HAVE REDUCED FIXED OPERATING EXPENSES ALSO, I.E., REDUCED BRANCHES, MANPOWER, ETC. BECAUSE THIS WOULD HAVE SAVED MILLIONS IN THE PAST YEARS.
IN ANY CASE, THEY HAD NO TRUST FUND OR ARL DEFICIENCY UNTIL LAST YEAR SO EVEN FOR THE TRADITIONAL PLANS, WALANG PROBLEMA NA SERBISYOHAN ITO, EXCEPT FOR THE LIQUIDITY PROBLEM NA GAWA-GAWA LANG NILA.

2. PPI has not exercised its right under Section XV of its contract. It could have taken legal cover from this but so far it has not.

THERE IS NO PROVISION IN THE PRE-NEED CONTRACT THAT EXPRESSLY STATES THAT TUITION FEES MUST BE REGULATED OR BE KEPT UNDER THE 10% OR WHATEVER TUITION FEE CAP. WALA! IT DOES NOT EXPLICITLY STATE THAT THE SERVICING OF THE BENEFITS TO PLANHOLDERS IS ANCHORED ON A FIXED, PROJECTED INCREASE IN TUITION FEES OF SO MUCH PERCENT. WALA! THE CONTRACT IS SILENT ON THIS BUT EXPLICITLY STATES THAT PPI WILL PAY OUT THE BENEFITS/TUITION FEES OF THE PLANHOLDER FOR THE SELECTED COURSE OR EDUCATION LEVEL OF THE NOMINEE. IYON MERON! THIS SECTION XV IS TO BE INTERPRETED ONLY IN EVENTS THAT ACTUALLY PREVENT PPI FROM PAYING OUT BENEFITS NOT EVENTS THAT MAKE IT DIFFICULT FOR PPI TO PAY OUT BENEFITS. TUITION FEE DEREGULATION MAY HAVE MADE IT MORE DIFFICULT FOR PPI TO MEET AND SERVE ITS OBLIGATIONS. BUT IT CERTAINLY DID NOT AND DOES NOT PREVENT PPI FROM MEETING AND SERVING ITS OBLIGATIONS. MALAKING DIPERENSYA ANG PANUKALANG BATAS NA IPAGBABAWAL ANG PAGSAGOT SA KARAPAT-DAPAT NA BENEPISYO SA PANUKALANG BATAS NA MAARING MAGPAHIRAP SA KOMPANYANG TULAD NG PPI NA SAGUTIN ANG KARAPAT-DAPAT NA BENEPISYO.

3. PPI put in P1.5 billion to pay the runaway tuition. This is one reason it paid in full all tuition claims in the past 14 years. It has so far sent to school 56,000 scholars and at most 18,000 are not yet availing themselves of the benefits-a modest number by industry standards mainly because of No. 1.

HINDI NAMAN ITO KAHANGA-HANGA DAHIL IYON NAMAN ANG DAPAT LANG NILA GAWIN DAHIL MAY OBLIGASYON SILA AT KATUNGKULILN NA HARAPIN ANG PAGSERBISYO SA PLANHOLDERS. REMEMBER, NEGOSYO ITO. KUNG MALULUGI ANG STOCKHOLDERS NG PPI, PASENSIYA NA LANG. PERO DAPAT HARAPIN ANG LEGAL, FINANCIAL, FIDUCIARY OBLIGATIONS (we’re not even citing the moral and social obligations). HINDI MAARING SABIHIN TAMA ANG ISANG AKSYON DAHIL MARAMI NA ANG “NASERBISYOHAN” AT KONTI NA LANG ANG “MASASAKTAN”. WE ARE NOT TALKING OF NUMBER WEIGHTING AND AVERAGES HERE. KUNG HINDI NABIGAY NG PPI ANG KARAPAT-DAPAT NA BENEPISYO SA KAHIT ISANG PLANHOLDER, MALI AT WALANG MASASABING TAGUMPAY ITO. YOU FAIL JUST ONE PLANHOLDER AND THAT MEANS YOU ARE A FAILURE IN YOUR BUSINESS BECAUSE THAT IS THE WHOLE POINT OF THE BUSINESS.

4. PPI sold instead fixed-value plans, where benefits are defined. PPI sold more than 400,000 of these. But it eventually had to put these in a separate company because the 34,000 open-ended plans continued to be voracious eaters of corporate funds. It separated the two types of plans through a spin-off, a perfectly legal action that is done all over the world. Without this move, the whole body of fixed-value and open-ended plans would have suffered. So why not take steps to keep the 400,000 healthy?
SEE MY REPLY TO NO.3. FIRST, NOTICE THE LANGUAGE – “open-ended plans are voracious eaters of corporate funds”. HINDI NA NILA SINABING “TRUST FUNDS” KASI MALI IYON. THE OPEN-ENDED PLANS HAVE THEIR OWN TRUST FUND WITH NO DEFICIENCIES. SO DO THE FIXED-VALUE PLANS. NOW, BECAUSE HINDI NA NAGBEBENTA NG OPEN-ENDED PLANS, ANG PANGSERBISYO NITO IS TAKEN FROM ITS OWN TRUST FUND, NOT FROM THE TRUST FUND FOR FIXED-VALUE PLANS.
NOW, THEY’VE PROJECTED THAT IF TUITION FEES CONTINUE TO RISE, WITH THE LOW INVESTMENT YIELDS, THE TRUST FUND OF THE OPEN-ENDED PLANS MAY (EMPHASIS ON “MAY” KASI FUTURE ITO – WALA PANG CERTAINTY NA MANGYAYARI) NOT BE ENOUGH TO SERVICE FUTURE AVAILMENTS.
SO, AND THIS IS THE TRUTH, SA SALES NG PAGBENTA NILA NG FIXED-VALUE PLANS, THEY MUST NOW REDUCE THEIR PROFIT MARGIN AND ADD TO THE OPEN-ENDED TRUST FUNDS OR EVEN USE PART OF THEIR PROFIT MARGIN TO SERVE CURRENT AVAILMENTS. THE TRUST FUND FOR FIXED-VALUE PLANS IS SAFE AND INTACT.
SO MALIWANAG NA HINDI KINUKUHAAN ANG TRUST FUND NG FIXED-VALUE PLANS. ANG NAGYAYARI AY NABABAWASAN ANG KITA OR PROFIT MARGIN NG PPI/YUCHENGCO PARA MADAGDAGAN ANG “POSIBLENG” FUTURE KAKULANGAN SA TRUST FUND NG OPEN-ENDED PLANS (TANDAAN DIN NA UNTIL LAST YEAR, WALANG DEFICIENCIES SA TRUST FUND AT ARL ANG PPI).
SO KAILANGAN NILANG BAWASAN ANG COMMISSION SA AHENTE, O BAWASAN ANG OPERATING EXPENSES NILA (SWELDO’T BONUSES NG TOP MANAGEMENT, NO. OF BRANCHES, ETC.) PARA MATUGONAN ANG PAGDAGDAG SA TRUST FUND PARA SA OPEN-ENDED.
SO, IT IS SIMPLY FALSE AND A LIE TO SAY THAT THE WHOLE BODY OF
FIXED-VALUE AND OPEN-ENDED PLANS WILL SUFFER. NO!!! WHAT WILL SUFFER IS YUNG PROFIT MARGIN NILA ON FIXED-VALUE PLAN SALES.

5. Even before this, PPI wrote many schools to buy thousands of scholarships for its beneficiaries and pay in advance the whole four-or five-year courses. Not one agreed to the offer of a 10-percent annual increase. PPI pleaded. It failed.

AGAIN, THIS IS THE SAME AS OFFERING THE BUYBACK OF PLANS FROM PLANHOLDERS OR OFFERING PLANHOLDERS TO MAKE LOANS ON THEIR PLANS. ITO AY MGA STRATEHIYA PARA BAWASAN ANG KAUKULANG OBLIGASYON. LEHITIMO NAMAN ITONG MGA STRATEGY NA GANITO. PERO, AGAIN, PASENSIYA NA LANG AT HINDI GUSTONG TANGGAPIN NG IBANG SCHOOLS O PLANHOLDERS ITO. AGAIN, LET’S FOCUS ON WHAT PPI DID WRONG AND SHOULD HAVE DONE (see no. 4 reply). THEY MISMANAGED OPERATIONS AND EVEN DECLARED DIVIDENDS IN EARLIER YEARS. THEY EXPANDED BRANCHES AND INVESTED IN DUBIOUS INSTRUMENTS.

6. PPI bought back plans but the secondary market, which it has no control of, has brought prices to unreasonable levels.

AGAIN, SIMPLENG PANLOLOKO ULI ITO. SALES IN THE SECONDARY MARKET BOOST NEW BUSINESS OR INITIAL COLLECTIONS BROUGHT IN (ICBI), THE SALES INDICATOR FOR PRE-NEED COMPANIES. SO IT WAS TO PPI’S BENEFIT TO KEEP THE SECONDARY MARKET ALIVE. ALSO, HINDI NAMAN MABUBUHAY ANG SECONDARY MARKET WITHOUT PPI’S CONSENT SINCE ALL THESE SECONDARY SALES WOULD HAVE ADMINISTRATIVE PROCESSING FROM PPI.

7. After the spin-off, PPI was left with the 34,000 plans. It had looked for ways to limit liability on the open-ended plans by offering to swap them with fixed-value plans. But time was not on its side. Enrollment was creeping in fast. It had more than P300 million in cash left and $52-million worth of government-guaranteed bonds that would mature in 2010. Of the 34,000 plans, 16,000 are due for enrollment; the rest, the majority, would be due to file in the coming years and obviously would be disadvantaged if assets are liquidated now. Something must be left for them.

AGAIN, THIS JUST REITERATES THE MISMANAGEMENT THAT PPI/YUCHENGCO DID. HINDI LANG P300 MILLION ANG PERA NG PPI BAGO ILIPAT ANG LAHAT SA LIFETIME. THE $52 MILLION-“WORTHLESS” OF GOVERNMENT BONDS WAS A DUBIOUS SELF-SRVING INTER-COMPANY TRANSACTION ITSELF, NOT AT ALL FOR THE BENEFIT OF THE PLANHOLDERS. WE ARE NOT TALKING ABOUT LIQUIDATING ASSETS FOR THE AVAILING AND NON-AVAILING PLANHOLDERS. WE ARE TALKING ABOUT PPI/YUCHENGCO MAKING AMENDS AND FIGURING OUT A WAY, TO THE POINT OF SELLING ASSETS, CLOSING DOWN BRANCHES, REDUCING THEIR PROFIT MARGIN, HAVING STOCKHOLDERS INFUSE MORE EQUITY, TO SERVICE CONTRACT- AND LEGALLY-STIPULATED BENEFITS OF AVAILING AND NON-AVAILING PLANHOLDERS.

8. So PPI went to court early this month. While it sought for suspension of payment, it asked the court to allow it to use its remaining P341 million in cash to support the tuition needs of the 16,000. PPI knew it had to help pay the tuition because it is enrollment time.

NO. PPI/YUCHENGCO PRE-EMPTED THE SEC AND FAST-TRACKED ITS PETITION FOR SUSPENSION OF PAYMENTS AND PETITION FOR REHAB (THOSE ARE TWO SEPARATE LEGAL ACTIONS) TO FURTHER “PRETEND” THAT ITS HANDS WERE TIED AND HAD NO MORE FUNDS BECAUSE IT KNEW IT HAD TO PAY FULL BENEFITS OF PLANHOLDERS BECAUSE IT IS ENROLLMENT TIME.

9. PPI proposed to return all the premium payments plus seven percent net compounded interest to the 18,000 non-availing plan holders. For the 16,000 who are already availing themselves of the benefits, PPI offered tuition support, which is part of the discounted balance of remaining "availments," plus seven percent net compounded interest that they are entitled to. All these depend on the court approving its rehabilitation plan.

SIEMPRE, KAPAG GUSTO MONG MAKALUSOT, KAILANGAN MAY IBIGAY KANG “PAMPALUBAG-LOOB”. SO PPI/YUCHENGCO ALREADY COMPUTED THAT GIVING THESE PREMIUM PAYMENTS PLUS 7% NET COMPUNDED INTEREST WOULD NOT HURT THEIR POCKETS. AGAIN, THIS PROPOSAL IS BASELESS O WALANG BASEHAN KASI NGA, KUNG HINDI NAGLOKO AT NAGLIPAT NG EARNING ASSETS SA LIFETIME AT HINDI NAGFILE NG REHAB AT SUSPENSION OF PAYMENTS, WALA LAHAT ITONG “PROBLEMA” NA HINDI DAW “KAKAYANIN” NG PPI NA BAYARAN ANG FUTURE AVAILMENTS.

10. If some opponents succeed in blocking the rehabilitation, PPI would likely be forced to Square One with all the problems and no solution, or into liquidation and sell its $52-million worth of bonds before maturity. If sold now, these bonds would fetch P550 million less than if they are redeemed by 2010. This loss, all plan holders must absorb.

BLOCKING THE REHABILITATION PLAN DOES NOT MEAN NA MAPIPILITAN ANG PPI/YUCHENGCO NA ILIQUIDATE ANG NAPOCOR BOND (NA, FOR ALL INTENTS AND PURPOSES, IS WORTH NOTHING ANYWAY SINCE NAPOCOR IS A LOSING GOCC ENTITY). BLOCKING THE REHAB PLAN MEANS PPI/YUCHENGCO WILL HAVE TO (see nos. 4 and 7 above) FIND OTHER MEANS TO FUND PPI. IF THAT MEANS RESTRUCTURING LIFETIME AND PPI TO RETURN ALL EARNING ASSETS TO PPI, THEN SO BE IT. IF THAT MEANS RCBC AND GREPA WILL HAVE TO LEND OR HAVE INTER-COMPANY ADVANCES, SO BE IT. IF THE YUCHENGCOS WILL HAVE TO SELL REAL ESTATE PROPERTIES, CLOSE BRANCHES, REDUCE OPERATING EXPENSES, SO BE IT. BOTTOMLINE IS, HINDI ANG PLANHOLDERS ARE DAPAT MANAGOT SA MISMANAGEMENT NA GINAWA NG PPI/YUCHENGCO.

PPI has done more as an exercise of its obligation, legal and moral, to its plan holders. When the time bomb ticks its last, PPI will be remembered as the company that offered to return the plan holders' money plus more while it still could, and took a lot of beating for a misunderstood but correct decision.

NO. RIGHT NOW, ITS ALREADY LOOKED AT AS THE COMPANY THAT RENEGED ON ITS OBLIGATIONS AND IS BRINGING DOWN NOT ONLY THE PRE-NEED INDUSTRY BUT EVEN AFFECTING ALSO THE LIFE INSURANCE INDUSTRY FOR A WELL-UNDERSTOOD (TRANSPARENTLY MALICIOUS AND FRAUDULENT) AND INCORRECT DECISION. EVERY SINGLE DAY THAT PASSES NA GANITO ANG SITUASYON ONLY REINFORCES THAT. ACTUALLY, ALL GARCIA. TECSON, ET.AL., AND PPI/YUCHENGCO ARE TRYING TO DO NOW IS TO DESPERATELY SAVE FACE AND JUSTIFY THEIR ACTIONS. BUT BELIEVE ME, WALA SILANG KAKAMPI. EVEN IN THE PRE-NEED INDUSTRY. GALIT SA PPI/YUCHENGCO ANG LAHAT FOR MAKING A VERY STUPID AND SELFISH MOVE. RENEGING ON OBLIGATIONS, KAHIT GAANO KAHIRAP GAMPANAN, IS NEVER ACCEPTABLE. BREAKING THE “TRUST” IN A BUSINESS BUILT FULLY ON “TRUST” IS SIMPLY THE BEST REASON TO SAY THAT THESE SUPPOSED “STEWARDS OF OTHER PEOPLE’S MONEY” SHOULD NOT BE ALLOWED TO CONTINUE ON MISMANAGING THE FUTURE OF PLANHOLDERS’ CHILDREN.

TLS

 
At Monday, May 09, 2005 10:14:00 PM, Anonymous Anonymous said...

The Mapuans fighting the Yuchengcos are experiencing the very same thing you are experiencing.

They (Yuchengcos) will claim 'silent majority' supports their plan.

They will demonize the leaders of your cause as the trouble makers.

They will divide your ranks by offering little bribes (yours is the 7%, ours is that we will keep the name for another 5 years kuno)and you should be thankful for their generosity.

They will portray themselves as people of integrity and there must be something wrong with you if you question them.

They will have hired people to infiltrate your message boards masquerading as one of you and sow doubts and intriques against your leaders.

They have the media covered, the internet is the only thing they can't control. Our sites have been hacked and attacked.

They will try to rationalize their actions using technicalities and legal jargons.

They will try to convince you that you are up against powerful people and that you can't win so you better accept their terms.

they will use every possible means to intimidate you and if they have to spread faeces in your rally path, they will and they have done it to us.

Let me tell you this, the Yuchengcos are very nervous right now. They know what can happen. Let's work together, make enough noise so that the media will lose credibility if they ignore us or trivializes us. Most of the Yuchengco business is very vulnerable now.

Let's be steadfast in our position. Let us show the world that we are really the victim, not them. Let us show the world that they are not sincere in dealing with us. In Mapua, they refuse to have a dialog (even if they claim so in the internet), they only have meetings that are only to disseminate information. They're not interested to listen to you. LET'S MAKE THEM LISTEN.

Mapua + Pacific Plan = Yuchengcos wake up call. The time is now.

 
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