Monday, April 25, 2005

A Test for Mr. Purisima and the SEC

from ABS-CBN Interactive 22 April 2005

Purisima orders SEC to probe Pacific Plans
(highlights made by author)

It took more than 5 business days to get any kind of decisive pronouncement from a ranking government official. 5 days of turmoil, 5 days of anguish. Secretary Purisima, show us your leadership and demonstrate your effectiveness in enforcing regulations in place that companies need to comply with first before any petition for a TRO can be contemplated. Since there the plans are SEC-registered securities, put your foot down in terms of investor protection, fiduciary responsibilities and truth in advertising provisions with respect to the way securities can be sold.

Finance Secretary Cesar Purisima on Saturday ordered the Securities and Exchange Commission (SEC) to investigate pre-need firm Pacific Plans Inc. after the company suspended payments to its planholders.

"I am calling the SEC to investigate the Pacific Plans case immediately with a view to protect the interest of the planholders," Purisima said.

He added: "The SEC should look beyond the rehabilitation plan [of the company] and review all the filings to check if they have lived to their fiduciary responsibilities."

Purisima also said SEC, acting as the government's corporate watchdog, must ensure that Pacific Plans did not violate the Securities Act and other laws.

He said the SEC's investigation will likewise include a check on the pre-need firm's parent company and its officers. Pacific Plans is majority owned by tycoon Alfonso Yuchengco.

He also ordered the SEC to check inter-company transactions and representations to ensure that all channels are reviewed for the benefit of the planholders.

Purisima's directive stemmed from the petition filed by Pacific Plans with a Makati City court recently.

The petition calls for a suspension of payments to planholders and rehabilitation.

The company said it might not be able to pay future claims because school tuition had been increasing at a tremendous rate ever since the government removed a 10-percent cap on tuition increases in 1990.

"The deregulation of tuition has caused a tremendous rise in the cost of education, which in turn put an enormous pressure on traditional (open-ended) plans and their respective trust funds considering that pre-need companies dealing in such securities could not pass on the additional cost to their planholders," the company said.

However, the company said that it is offering planholders an annual interest of seven percent on open-ended educational plans redeemable only by 2010.

"This will be a compounded interest that will start from the time that the planholder completed payment of the plan until 2010," Jeanette Tecson, company spokesman, said in an earlier interview.

She added: "This means that if a educational planholder was fully paid by 1997, then the interest will be from 1997 to 2010."

Tecson said the 2010 encashment will coincide with the maturity of dollar-denominated National Power Corporation (NAPOCOR) bonds that will bring in an estimated $51.8 million to the company.

Tecson said the firm will pay roughly half of 16,000 planholders filing educational claims for school year 2005-2006.

She said the company will pay most of the educational claims for non-exclusive or less expensive schools but will only shoulder less than half the claims of those enrolled in schools with high tuition.

Under the payment scheme, the company will disburse P28,000 for semestral planholders, P29,000 for annual planholders and P22,000 for trimester planholders. The payments started April 18.

Other schedules for payment to planholders are: April 19- May 25, April 20-22, April 25-29 and May 9 onwards. Those who or those who missed their schedules can go to the company office in Makati from May 2-7.


At Monday, April 25, 2005 10:29:00 PM, Anonymous AL said...

This is definitely fraud and someone has to answer for it!

At Monday, April 25, 2005 10:31:00 PM, Anonymous Anonymous said...

excuse me, i'm getting a little desperate here so pls SOS.

can anyone give me contact number of the spokesperson of the group? our newspaper would like more coverage of this and a more in-depth article.

you can contact me at 0918-9442641.

alcuin papa

At Monday, April 25, 2005 11:20:00 PM, Anonymous Anonymous said...

We must keep up the political and PR pressure. We must keep Pacific Plans in the defensive and put them in front of public opinion.

This is the only way I can see those ESTAFADORS to be ACCOUNTABLE for their own FUCK UPS.

At Monday, April 25, 2005 11:53:00 PM, Anonymous May said...

I think the Pacific Plan "brains" underestimated the power of the parents and the power of the children who are the real victims here.

They did not anticipate such passionate response from the planholders they defrauded.

We should keep on the flames aburning by remembering we are doing this for our children.

At Tuesday, April 26, 2005 12:17:00 AM, Anonymous MOM said...

On air Ces Drilon says "we planholders) should be thankful that Pacific is giving us 7% interest on our plans", and "why did we buy plans that are too good to be true"?

Oh,the Yuchengcos must really be jumping like monkeys in their seats after she has said that.

At Tuesday, April 26, 2005 1:34:00 AM, Anonymous Anonymous said...

Perhaps Ces Drilon does not understand what are fight is all about. It's not all about MONEY, girl! We just want a STOP to all the maneuvering of these rich and powerful families in the country. They feel that they can get away with everything.

At Tuesday, April 26, 2005 2:38:00 AM, Anonymous Anonymous said...

Questions to the lawyers assuming that the coalition submits an opposition paper:

1. To whom will the opposition paper be submitted? Is it to the same judge that signed the Stay Order, i.e. Judge Barza? But isn't this judge a close associate of the Villaraza law office? And this law office worked on this petition to the courts. Is this just a coincidence? We all know the answer?

2. What happens to the opposition paper? Will this be decided upon before the May 25 hearing? Or will a decision take long meaning the hearing can proceed pending decision on the opposition paper?

3. Assuming that the courts rule or decide in favor of the opposition paper, will the appeal process by PPI follow? Or the other way around, if the courts rule in favor of PPI, will the appeal process be undertaken by the planholders.

At Tuesday, April 26, 2005 7:06:00 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 7:52:00 AM, Anonymous Anonymous said...

Since the money we paid to Pacific Plans had been with them untouched, can we at least negotiate for a payment scheme more or less similar to the double your money in 5 years offered by some banks in the past? The 7% offered might not compensate for the long wait. Thus, if the plan had been paid say 10 years ago, then the amount should have been in 2010, 8x the amount paid by the planholder.

At Tuesday, April 26, 2005 10:59:00 AM, Anonymous Anonymous said...

For the next Dong Puno show, let's please come up with counter arguments similar to the ones we heard from the highly biased Ces Drillon.
It's possible that Ces Drillon was coached (not directly by PAcific), but via the ABS CBN management.
All the same, I'm very glad we're being given the chance to air our concerns.

At Tuesday, April 26, 2005 12:10:00 PM, Anonymous eilogt said...

This morning, DZRH interviewed Cong. Escudero and one of the topics is the Pacific Plans issue. Cong. Escudero asked the DOJ about the possibility of filing a large-scale estafa against Pacific Plans and its owners. DZRH called DOJ Sec Gonzales about the issue, among others. Gonzales' response was "eh wala naman nag-rereklamo" followed by a (sarcastic) laugh. HOW INSENSITIVE THIS GOVERNAMENT? MAS BULAG, MAS PIPI, AT MAS BINGI PA SILA than persons with disabilities.

At Tuesday, April 26, 2005 12:41:00 PM, Anonymous Anonymous said...

Is there someone in the group who is from DOJ? Please please please update your BIG BOSS on what has been happening around him. Hindi ba siya nagbabasa ng dyaryo (though wala naman talagang masyadong mabasa about the issue) o nanonood ng TV (again, wala naman masyadong coverage sa TV).

The question now is - Once the opposition paper is submitted to the courts, will the "good" Sec. already consider this as a "reklamo" so they can start an investigation (kuno!)?

Calling our legal team, please also submit a copy of the opposition paper to the Dept. of Justice when you do to the Makati courts.

At Tuesday, April 26, 2005 1:11:00 PM, Anonymous Anonymous said...


Legally, once the rehab plan is approved by the court, there is little that we can do. Look at what happened to the ASB/Luke Roxas creditors -- until now, they haven't been paid and they cannot do anything b/c of the legality of the rehab plan.


At Tuesday, April 26, 2005 1:52:00 PM, Anonymous Anonymous said...

To our research team,

Please check if former employees / officers of Pacific who are now in Liftime Plans or other Yuchengco affiliates (eg. Grepalife) still have their traditional educational plans.

Were they able to sell these plans before the stay order? Wouldn't this be like insider trading?

I was just thinking from the viewpoint of the Yuchengcos - I don't want disgruntled employees / officers who are also victims of the court order. I would find a way to appease my employees or else they might turn against me.

If the Yuchengco employees are also victims like us, can we find brave ones who can support our cause.

At Tuesday, April 26, 2005 3:06:00 PM, Anonymous Anonymous said...

PEP is offerring a measley 7%. If that was the investment opportunity I wanted, I would have rejected it. There were rates offering double your money in 5 years time and I don't understand why they think we are so stupid to agree to their offer.

To CES DRILON, I am not sure where you are coming from, but given your remark, are you admitting, PACIFIC PLANS was out to fool thousands of parents???? This is an insurance company! They should have looked at all angles of risks!

At Tuesday, April 26, 2005 9:44:00 PM, Anonymous Anonymous said...

Like other Cabinet members, Secretary Purisima serves at the pleasure of GMA, who is beholden to Uncle Al. Will the DOF Sec. defy her or capitulate just like in the recent San Miguel Corp. stock rights offering?

Makati RTC Judge Barza was a name partner in Carpio Villaraza Barza & Cruz - The Firm! Carpio is now a Supreme Court Justice and Cruz is now Defense Secretary. Villaraza is the favorite tenant of Atty. Mike Arroyo at LTA Bldg.

Presidential Spokesman & Press Secretary Bunye is the family friend/padrino of PPI's spokesperson Atty. Janet Tecson.

The relationship between the Yuchengcos and Malacanang is almost incestuous. We will never win in the courts.

Let's all work together to ensure our victory in the COURT OF PUBLIC OPINION!

At Tuesday, April 26, 2005 10:27:00 PM, Anonymous Anonymous said...

Kaya ba ni Cesar Purisima ito??

Lalo na kung iisipin natin na dating boss ni Purisima si RIZALINO ROY NAVARRO sa SGV??

At Tuesday, April 26, 2005 10:46:00 PM, Anonymous Anonymous said...


Page 19 of SEC document filed by Pacific Plans:

"The accounts were certified by the actuary of the Company who is accredited by the SEC. As of Dec. 31, 2003, MANAGEMENT HAS SUBSTANTIALLY COMPLETED THE VERIFICATION PROCESS OF 17% (!) OF THE PLANHOLDER DATABASE REPORTED IN 2002. The results indicated that this 17% of the planholder database represented MOSTLY PLANS WHICH HAVE BEEN SERVICED BUT NOT YET EXCLUDED IN THE PLANHOLDER DATABASE....."

This is POSITIVE PROOF that they manipulated their planholder database to:

1. oversell securities;

2. to sidestep any necessary contribution to the trust fund, hence the deficit;

3. siphon off planholders' hard-earned money to expand their business empire;

4. overstate the money expected to come into the coffers of Pacific Plans, so the Actuarial Reserve Liabilites would not look so bad; overstate the installment contracts receivables, so that IT WOULD LOOK LIKE THAT THE TRUST FUND IS EXPECTING MORE MONEY TO PUT INTO IT, WHEN IN FACT, THE PLANHOLDERS HAVE FULLY PAID FOR THESE PLANS.




At Tuesday, April 26, 2005 10:50:00 PM, Anonymous mrcruz said...

It is high time that the government help its people. The least it can do is to give the coalition a lawyer, media support or at least fairness in airing grievances of both sides, access to information or records, and all the help it can give.

At Wednesday, April 27, 2005 12:36:00 AM, Anonymous Hory said...

Why do I feel like the government is closing the barndoor after the horse has left?

At Wednesday, April 27, 2005 1:04:00 AM, Anonymous Anonymous said...

the horse just left leaving shit behind.

At Wednesday, April 27, 2005 12:24:00 PM, Anonymous Anonymous said...

Investigation to parent company of pacific plans, inc(grepalife) should start since ppi started selling PEP trad. am sure SEC they can find a lot.

At Thursday, April 28, 2005 6:09:00 PM, Blogger PARTY OF ENLIGHTENED PLANHOLDERS (PEP) said...

This comment has been removed by a blog administrator.

At Thursday, April 28, 2005 7:24:00 PM, Anonymous Anonymous said...


Do not shortchange the future of your kids!

At Thursday, April 28, 2005 8:35:00 PM, Anonymous Anonymous said...

In its petition, PPI claimed while it can still pay the tuition fees at present,but, it may not be able to pay future claims because of runaway tuition since the Government removed the 10% cap on tuition increases in 1990.
1. IF such is the case, then why did they still sell those traditional plan up to 1992?
2. If you scrutinizes the general provisions of the policy of the contract, Section 1, stated that PACIFIC guarantees to pay, irrespective of cost at the time of availment, the tuition and other standard school fees for enrolment of the SCHOLAR in the Educational Program contracted by the PLAN HOLDER. Even in the certificate of full payment, PPI guarantees all the benefits and privileges the plan holder is entitled to as described in the agreement/contract which was signed by Rafe Diaz,and its various presidents Espiridion GA Heceta Jr, Sotero B. Balmaceda, Alfredo C. Antonio
, PPI claims themselves to be a Pre-need Specialist since 1967. I think so too. PPI is a specialist in DECEIVING, A LIAR, WORD WITHOUT HONOR. It’s a shame for the pre-need industry as a whole, due to the acts of PPI, I DARE SAY THAT the pre-need industry is DEAD. Shame to the name of YUCHENGCO, since their selling point which they always mentioned in their presentation with the plan holders, is that their founder is AMBASSADOR YUCHENGCO himself, that they have 2 trustee banks CHINABANK and RCBC BANK and SEC to regulate them.

At Thursday, April 28, 2005 8:39:00 PM, Anonymous she said said...

Paragraph 3 in their letter stated that PPI under the rehabilitation plan will replace open-ended plans with fixed value plans at no extra cost to all plan holders. The new plans in effect would give plan holders their money back plus more, such as:
1. It will carry roughly 7% annual return up to 2010.
2. It is backed up by government bonds.
3. Payments will be made by July 31, 2010 when the government bonds mature.
4. It is transferable and can be sold to other parties anytime before July 2010.
Under the proposed arrangement, plan holders would be able to cash in their new fixed-value plans only in 2010, approximating the maturity of government bonds which represent the bulk of PPI’s trust funds. No funds would be released until then. But these plans can be sold to any interested party at anytime as is the practice now.

Again, PPI put some sweetener in their grand deception plan, the 7% is not enough for the cost of medicine, professional help a plan holders might have to seek due to psychological anxieties, excruciating emotional turmoil, mental anguish, financial burdens of the plan holders.
Also the computation of 7% annual return should have started from the time, the plan holders paid the premium and not after the plan had been fully paid. Because if you put the money in the bank, it earned interest. NOW, the plan holder is at the mercy of PPI ,as to when it can dole out the money.

It stated that payment will be made by July 31,2010, WHEN THE government bonds mature, so between NOW and July 31, 2010, what do the scholar of the plan holders do? Plant camote? TIME is of the essence. Can we buy back the lost time? Can one put a price to the time? Better yet, put a halt to the time. The answer is NO. How can the plan holders sold or transfer their plans anytime before July 2010 ? the answer is glaring obvious CAN NOT.

At Thursday, April 28, 2005 8:42:00 PM, Anonymous I said said...

As a concerned citizen, should we BOYCOTT all companies connected or affiliated with YUCHENGCO GROUP, such as RCBC BANK, Grepalife (Great Pacific Life Assurance Corp.), Malayan, Insurance., Lifetime Plans, Inc. RCBC Securities, Inc.? BE VIGILANT.

When WEALTH is lost, SOMETHING is lost, when CHARACTER is lost, EVERYTHING is lost. Whoever designed these devious plan against the plan holders, is definitely unchristian, unprofessional of him or her.

At Saturday, April 30, 2005 10:07:00 AM, Anonymous Gin said...

I agree with eilogt and anonymous of april 26, 2005 12:41pm. We should give the DOJ our opposition paper as well. If fact, we can give DOJ a copy first. We donot have to wait for May 15, 2005. I heard that DOJ is "supposed" to act faster than the other govt agencies. I AM PRAYING I AM RIGHT... CALLING DOJ PERSONNEL! I am sure there are parents working with DOJ who are also victims, not necessarily those who own PPI but CAP, Prudential, Philam, etc. This is your chance to help build the education of our children and the future leaders of tomorrow.

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