Monday, April 25, 2005

Setting up Reviewers for Planholders

There is a bitter irony in our situation that we feel that there is a need to set up a "review class" for all planholders so that we all have a firm grasp of the legal, regulatory, and ethical issues that surround the rehabilitation of Pacific Plans. We also will try to condense the numerous helpful comments and insights into simpler language because not everyone is a corporate lawyer nor a sophisticated money manager.

We want to make sure that all planholders are aware of their full rights and entitlements under the law as well as the having everyone understand why the actions taken by Pacific Plans are deplorable and ill-advised.

Pacific Plans and YGC do everyone a disservice by offering to "better their offer" or to entice planholders into a compromise agreement without offering to discuss their legal obligations and the true entitlements of planholders. They prefer to talk about the intricacies of Actual Reserve Liabilities and why they did not foresee the tuition increases in order to defuse the attention...all irrelevant.

LET US BE VERY CLEAR ABOUT THIS.

The bedrock principle here is honoring contractual obligations that have been freely entered into by the parties. Write-offs due to bad investment decisions are for the account of the owners of the company. Pacific Plans wants the planholders absorb the mistakes of the owners. Planholders are not equity investors (SEC take note please!) nor did they buy these instruments for speculation. These instruments were peddled and purchased as insurance / assurance by heads of families for a secure future for their children.

Before Lifetime Plans was created, Pacific Plans was profitable. In addition, the parent company of Pacific Plans is equally profitable and in no danger of bankruptcy. In short, the financial means to absorb the write-offs are well within the means of the owners to honor their contractual obligations.

Why YGC chooses not to do so is the matter that the PEP Coalition legal team will investigate and challenge.

36 Comments:

At Monday, April 25, 2005 3:40:00 PM, Anonymous AL said...

True.

We are not suppliers whom they can suspend payments to.

They peddled these plans for the promise of an assured education for our children regardless of the tuition fees.

If they go scot-free on their culpability, this will become a very bad precedent. Other companies may use this strategy to free themselves from responsibilty.

What the Yuchengcos did is utterly irresponsible. They have hurt the very core of what family values should be.

 
At Monday, April 25, 2005 4:14:00 PM, Anonymous Anonymous said...

I checked my policy contract and indeed in Section XV (previous post) it states the PPI is not liable due to changes in government regulation or principle (implying tuition fee deregulation). if this is our bedrock principle,
of honoring contractual obligations that have been freely entered into by the parties, then we might have a weak case. I am not a lawyer but PPI might have a valid exit. Do we all have section XV in our policy contracts?

 
At Monday, April 25, 2005 4:48:00 PM, Anonymous Anonymous said...

Re PPI's escape clause, i.e. if there is a adverse gov't rule, it seems to me (and I'm also not a lawyer), but for this clause to be a valid defense, PPI should have declared a force majeure right after the time government deregulated tuition fees. Certainly it should have done so by 1992 when it stopped selling the traditional plan, for this management decision clearly shows that it was aware of the implications of the deregulation. Having failed to do so, they should not belatedly cover their mismanagement in not declaring force majeure a long time ago by using this escape clause, which they never used as a defense in the first place.

 
At Monday, April 25, 2005 5:17:00 PM, Anonymous Anonymous said...

Sec XV is a catch-all clause that appears in standard business contracts where a future government regulation may prevent Pacific Plans from HONORING its obligations.

The inapplicability of hiding behind the force majeure argument as noted by the poster above is valid. The deregulation happened more than 13 years ago!!! It's too late in the day to use that to justify inability to honor obligations due to poor forecasting.

Besides, how do you explain the fact that there more than 50% of the plans are still unavailed? (ie. 34K plans in effect of which 16k are currently availing). Do you think there are 18,000 children out there who are 13 years old or more that are not yet in grade school??? Pacific Plans must have had one hell of a record breaking sales push in 1992 before being surprised by the deregulation and deciding to wind down the program!

And, if the PPI management claims their awareness of the problem as early as 1992, why did they
allow the secondary market for unavailed educational plans to continue to trade quite actively and have prices continue to spiral upward.

It would appear to be beyond simple negligence that the unavailed plans were not immediately repurchased by Pacific Plans if they had already foreseen, as they claim, that they had seen the portfolio shortfall problem as early as 1992. Had they retired the unavailed plans, then we would not have the problem that they claim today.

All this was happening where the Pacific Plan officers avowedly knew the problem.

Not only do the excuses and alibis not wash, they only serve to fuel more and more awkward questions for SEC and other regulatory investigations.

 
At Monday, April 25, 2005 5:46:00 PM, Anonymous Anonymous said...

What do you suggest those whose plans have been transferred to Lifetime Plans? Can we pull out our funds or are these also covered by the court freeze order? Do you suggest we pull out?

 
At Monday, April 25, 2005 5:54:00 PM, Blogger R said...

It's the story of our life, planholders such as ourselves who only have our children's future in mind will become unwilling victims to a family whose wealth can sustain its future generations. It is so unfair, where is justice, Mr. Integrity?

 
At Monday, April 25, 2005 6:04:00 PM, Anonymous Anonymous said...

I guess even if they declared force majeure in 1992 versus now, there would still be a lot of us complaining. It is a question of whether declaring force majeure in 1992 and everyone becomes unhappy (fewer persons availing) or now(serviced a lot). Maybe they did now so that they would have already serviced more so there will be fewer complaints(32000 vs 80000?). Whatever the case, I am more mad at my friend (had 20 plans at one time) who took advantage of me without revealing not explaining the true nature of my fixed-plan(open to force majeure). Sad to belong in the 32000.

 
At Monday, April 25, 2005 6:31:00 PM, Anonymous Anonymous said...

Just read in the business section of STAR newspaper today of RCBC's plan to buy 2 other banks.

Yan ang walang pera !!!

 
At Monday, April 25, 2005 9:32:00 PM, Anonymous Anonymous said...

What legal action can we take against those agents who sold the plan after 1992? The agents should also be held liable since they are aware that the open-ended plan was not to be offered to new investors.

 
At Monday, April 25, 2005 9:36:00 PM, Anonymous Anonymous said...

Yup! I also read the section in Phil star which states that RCBC is eyeing two commercial banks, one is PBCom and the other is one of the top ten (10) commercial banks. They are also waiting for BSP to lift the moratorium for bank expansion because they already have twenty (20) new branch sites in mind that will form part of their expansion and they will apply for licenses once the moratorium is lifted. But come to think of it, this may one their ways of covering up for the agitation that they feel from the withdrawals that their bank is nursing. We should really let the yuchengcos feel that we mean business....boycott all their businesses. E.g. go to other honda dealers for your repairs & car services, not honda caloocan or quezon avenue. Am sure every little thing we do will go a long way and they will feel the snowballing effect.

 
At Monday, April 25, 2005 9:44:00 PM, Anonymous Anonymous said...

I hope the delayed reaction from a concerned government body like Mr. Purisima's will not simply be a lip service to console the planholders. If he is sincere in his intentions, then let us commend him for it.

 
At Monday, April 25, 2005 9:48:00 PM, Anonymous Anonymous said...

I watched the ANC show a while ago. PPI really had no intention to show up. Naisahan tayo doon. Tutal, Ces Drilon perfectly pitched in as their spokesperson. Notice, she had not a single word of sympathy for the planholders. I think they are slowly inching their thrust on renegging their obligations to the secondary plan holders. Kitang kita sa mga tanong ni Drilon. Remember, a lot of the secondary market buyers are yet to avail of their plans. Afterall, if they successfully drop this account, a big chunk of their obligation will be erased.

 
At Monday, April 25, 2005 10:33:00 PM, Anonymous Anonymous said...

Can we pls get interviews with other newscasters such as Mel Tiangco? I'm so disgusted with Ces Drillon.

 
At Monday, April 25, 2005 11:07:00 PM, Anonymous onewithallofyou said...

I agree. It seems Ces Drilon could not hide her bias against PPI planholders. She mentioned at least a couple of times that the planholder should have thought twice before buying such a plan, which she implied was too-good-to-be-true in the first place. I sure hope she does not intend to put up her own pre-need business.

 
At Tuesday, April 26, 2005 12:28:00 AM, Anonymous Anonymous said...

It has been a known rumor in the broadcast industry that ces drilon will only do things that will advance her interests, both professional and financial.
Knowing fully well that a broadcasters' role has to take an objective stance, her seemingly biased innuendos are highly suspect.
Could she have been bought by the Yuchengcos?
. . . your guess is as good as mine

 
At Tuesday, April 26, 2005 1:00:00 AM, Anonymous Pia said...

What integrity can you expect from a woman who would stoop so low as to rush for priority by jumping surreptitously over a long line of waiting customers at a Mango sale.

 
At Tuesday, April 26, 2005 1:48:00 AM, Anonymous Anonymous said...

For a while, she was busy with her cell phone while on air. How rude and impolite! Was she reading a script sent by the Yuchengco camp?

 
At Tuesday, April 26, 2005 2:25:00 AM, Anonymous Anonymous said...

Ces Drilon has finally showed her true color. The agenda for the show on ANC was to refute and downplay the grievances of planholders. She made a fool of herself and just lost her credibility as an objective newscaster. How many times did she repeat that planholders should be happy that they are getting 7% interest on the principal? The issue here is about the binding contract for an EDUCATIONAL PLAN. It is not about investing in a Certificate of Time Deposit. Pacific Plans peddled false hopes. After getting our money, screwed the future of our children, the Yuchengco daughters took advantage of their clout in this GMA administration,which by the way ends in 2010, they acted in bad faith and believe that they are UNTOUCHABLES. Ces, you're now in the payroll of the Yuchengco's?

 
At Tuesday, April 26, 2005 7:09:00 AM, Anonymous Anonymous said...

Announcement: We are once more invited at Dong Puno Live on Thurday, Apr. 28 (Taping on Wednesday 1pm). A staff of the show assured us that PPI representatives would be coming in fact they are inviting some sales associates to come to the show. We are inviting planholders to come with us. Kindly txt Leo 0919-4235789 for confirmation if you could join us.

 
At Tuesday, April 26, 2005 9:03:00 AM, Anonymous MOM said...

PPI's non- appearance in already two talk shows is a strategy. They want to hear everything from our camp first then present their position against what we have aired so far. They put themselves in a position where they don't show up when invited. They want to show how powerful they are when they simply call the network and say they will go this time.

Iba na ang rich and powerful. Isang tawag lang nila, pinapansin agad.

 
At Tuesday, April 26, 2005 9:08:00 AM, Anonymous Anonymous said...

I would like to contribute a possible counter argument as against the alibi being used by PPI for their unethical and irresponsible action to suspend payments. Particularly their reason of the more than 10% increase in tution fees due to gov't. deregulation, coz in my case, I am a holder of non-exclusive plans for elementary, high school and college. Presently, availing of the 4th yr. high school, I have checked all my previous availments, the yearly increase of my availments was not more than 10%, so how can PPI say that they are losing money on the non-exclusive plans.
With regards to the exclusive plans which have increased up to 20-30%, I think PPI should have approached or consulted these exclusive plan holders for a compromised reduced % increase on these plans, and not unilaterally suspend all types of payments.
Bakit idadamy pati mga non-exclusive plans na hindi naman sila nalulugi!!

 
At Tuesday, April 26, 2005 9:20:00 AM, Anonymous Anonymous said...

I am a planholder and a first time poster. I am deeply affected by this turn of events. I am glad that this coalition was formed banding us together. Judging by the quality of posts here, I can safely say that we are all educated people. It is just sad that our cause is now becoming fanatical instead of having principle and dignity. We don't know the whole truth and thus we cannot judge. We are here to seek answers. I don't know Ces and have never met her and I dont even know any of her friends. It is just sad that we cannot accept that anyone who goes against us is under someone's payroll. So, if this goes to court and we lose, then they are also under the payroll? Who will we accept that has a different opinion from ours as being principled? I believe in our cause but fighting for it with pride and dignity, not as fanaticals - Blue Eagle

 
At Tuesday, April 26, 2005 12:48:00 PM, Anonymous Anonymous said...

I know of an organization that has pulled out millions from RCBC to deposit in Equitable. There is a rumor going around, apparently, that there will be a bank run on RCBC in a few days. Also, fund managers are jittery over the coming May 25 court decision and rallies, trouble etc. that may occur on that day. It's easy to sew panic, it seems. Once people's confidence has been shaken, then nothing is safe. The Yuchengcos should keep that in mind.
I am hoping that they have taken this drastic step not permanently, but so that they can bargain from a strong position. Should we not discuss what compromise agreements we could negotiate? Their position now is not to honor the traditional plans. Maybe we should demand that they phase them out gradually. For example, they could honor them only for the next seven years, enough to honor one grade school plan. It would give people time to sell their unavailed plans to parents who would use them immediately. Hopefully, those like me who bought on the secondary market would have a chance to get their money back.

 
At Tuesday, April 26, 2005 3:02:00 PM, Anonymous kid of education said...

It's so unfair for pacific to do this because they were entrusted the payment of the tuision of the children like me. The plan was entrusted on them to be paid no matter how much it costed. We don't mean it to be illeagal but we are saying that it is immoral. There are alot of things that are legal but not moral like lotto. I know that there are people in the level that can do something about the payment but what will the people in lower levels do? They quit during the month of April and most schools' enrollment are also in April so where can the people get the money? Because of what they did, alot of children will not be able to go to at least a decent school to study in. They said that they're going to be bankrupt if they continue to pay but how much money does bankrupt sound to them, 10B pesos? One thing I can say is that THE YUCHENGCO HOLDING PACIFIC IS NOTHING MORE THAN A HEARTLESS BRUTE!!!
I hope that pacific will change their minds and come back to pay for at least the needy and the other scholars who do not have any money to use for their tiusion and their whole education.

 
At Tuesday, April 26, 2005 3:08:00 PM, Anonymous Kid of Education (12 years old) said...

It's so unfair for pacific to do this because they were entrusted the payment of the tuition of the children like me. The plan was entrusted on them to be paid no matter how much it cost. We don't mean it to be illegal but we are saying that it is immoral. There are alot of things that are legal but not moral like lotto. I know that there are people in the level that can do something about the payment but what will the people in lower levels do? They quit during the month of April and most schools' enrollment are also in April so where can the people get the money? Because of what they did, alot of children will not be able to go to at least a decent school to study in. They said that they're going to be bankrupt if they continue to pay but how much money does bankrupt sound to them, 10B pesos? One thing I can say is that THE YUCHENGCO HOLDING PACIFIC IS NOTHING MORE THAN A HEARTLESS BRUTE!!!
I hope that pacific will change their minds and come back to pay for at least the needy and the other scholars who do not have any money to use for their tuition and their whole education.

 
At Tuesday, April 26, 2005 4:47:00 PM, Anonymous Anonymous said...

The Yuchengco's virtually have control over media to keep the issue from blowing out of proportion. You would notice newspapers barely print anything about it, columnists keep mum about it, and even hosts of talk shows downplay the plight of the policy holders. The Yuchengco's are trying to bombard the people now with their "positive image" and "stable image" by using media to portray that "its business as usual." The PPI is an isolated case and all Yuchengco Companies are doing all right.

RCBC is bleeding thru bank runs that is still going on. In fact, they are heavily selling their inventory of government securities to address their liquidity problem.

We must continue in our endeavors to topple this "goliath". Only through our relentless desire to assure the education of our children, we must prevail and persevere no matter what the cost.
Remember: even a trickle of water can destroy/bring down the mightiest dam.

 
At Tuesday, April 26, 2005 5:09:00 PM, Anonymous Anonymous said...

As a Mapuan, Mapua Institute of Technology, I suggest that PEP Coalition involves the students of Mapua (United Mapuans/no to malayan, see their website) and well as the alumni. Mapua is one of the members of the Yuchengco Group of Companies and one of the schools that increased its tuition fees so much.

Also the students and the alumni of Mapua are fighting the Yuchengcos over the change of the name of their school/Alma Mater. They are suffering from the same hands that you PPI/PEP are suffering from.

Why not join forces. If interested, let us know how we can work together and where and when
we can meet. Please call Engr. Myra Torres of the National Association of Mapua Alumni at 660 7546.

Thanks,

 
At Tuesday, April 26, 2005 9:13:00 PM, Anonymous Anonymous said...

In response to the previous post from the Mapuan, I don't think our coalition has much in common with their concerns, other than a revulsion for the Yuchengcos. How can a dispute over a name change compare to the loss of our children's educational support? Sorry, I think it will be a mismatch.

 
At Tuesday, April 26, 2005 10:47:00 PM, Anonymous Anonymous said...

What an usurper. After getting into Mapua, yuchengcos just increased the tuition in multiples? Maybe this is what pacific plans was referring to. Yuchengcos must have been the one who took advantage and raised tuition by as much as 36% , raked in money, and then declared pacific plans on the brink of bankrupcy and unable to honor their obligations.

 
At Wednesday, April 27, 2005 2:40:00 AM, Anonymous Anonymous said...

Blue Eagle (or so you say), I hope that what you posted was your first and last. Aren't you on the wrong side of the fence? It also seems that you are in the wrong website.

How dare you say that our cause is now becoming fanatical instead of having principle and dignity. You are just so "DENSE" and "BLIND" to what has been happening around you. Principle - this is the very reason why the planholders formed the coalition. It's not all money. We are thriving very hard to unravel the truth about Pacific Plans. Dignity - you are barking at the wrong tree. Tell that to the "other" party.

You said that you believe in the cause but fighting for it with pride and dignity. How then do you intend to do this? I don't think you know what your saying.

 
At Wednesday, April 27, 2005 11:32:00 AM, Anonymous Anonymous said...

i welcome mapua parents and students to join our cause as long as the issue they are fighting for is regarding pep trad plan - as sympathizers.

 
At Wednesday, April 27, 2005 11:37:00 AM, Anonymous Anonymous said...

to blue eagle - if we go to court and lose when facts show we are in the right - yes, they are under payroll. i am not a lawyer but i believe with any laws, the supreme foundation is the spirit behind the law, not the letter of the law. so if ppi wins this case, is the judiciary telling us now we can spin out our losing business and file for rehab or bankruptcy as well without consulting creditors ? okay yan - that is the best formula to ensure all business will succeed and quicken the death of all sour business. blue eagle, who are your customers, tell us and we will help them run their business like ygc did to ppi

 
At Wednesday, April 27, 2005 11:38:00 AM, Anonymous Anonymous said...

i welcome mapua parents and students to join our cause as long as the issue they are fighting for is regarding pep trad plan - as sympathizers.

 
At Wednesday, April 27, 2005 10:58:00 PM, Anonymous Anonymous said...

From a reliable source, it was the PPI officers themselves who killed this product. During the heydays - early 90's, the officers themselves would 100 to 500 plans each, pay only the first month's premium and then let the plan lapse. On the second year, they reinstate the plan and pay another 1 month's premium, and so on until they find someone who buys the plan at super super high premium!! The officers are THE people that MADE MILLIONS!!!!! PPI can identify them but PPI does not want to prosecute them. If fact they allowed this set up up to early 2000. IN SHORT, only a few people MADE MILLIONS out of the people who bought in the secondary market. I bought my plans only for personal use, not to MAKE A PROFIT. I have nine plans, only two availed. Somebody should go shoot those PPI officers who took advantage of the plans!!!!!!!!!

 
At Wednesday, April 27, 2005 11:05:00 PM, Anonymous Anonymous said...

From a reliable source, it was the PPI officers who KILLED this traditional educational plan. During the Heydays - 90's the officrs themselves bought over 100 up to 500 plans each. Their scheme goes like this: They pay the first month's premium, then let the plan lapse. On the second year, they pay another month's premium, and so on.... while looking for a buyer who buys the plan at super super high premium. These officers MADE MILLIONS OUT OF THEIR OWN COMPANY!!!! PPI knows these officers but PPI let them go... I understand those people were asked to resign sometime in the late 90's. But PPI should NEVER have let them get away with that kind of arrangement. Because of mismanagement, we are NOW THE ONES SUFFERING!!!!!!!! I believe this was the start of the planholders' problems. And PPI should not punish the Legitimate planholders!!!!!!!!!!! PPI is correcting their OWN mistake by taking OUT ON US - LEGITIMATE PLANHOLDERS!!!

 
At Wednesday, April 27, 2005 11:14:00 PM, Anonymous s said...

anonymous above should explain the situation about the 18,000 13-yr olds still not in grade one as posted by another anonymous on April 25, at 5:17:33 pm. I am sure just before Pacific stopped selling in 1992, the officers themselves bought all the remaining plans for themselves and made much premium. So those people who bought after 1992 from the seconday have been had. I am sorry to say I am one of those.

 

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