E·N·Q·U·I·R·Y
DEMAREE J.B. RAVAL
DEMAREE J.B. RAVAL
Continuing plunder
Sunday, 07 13, 2003
Largely ignored in the wake of the never-ending string of anomalies being exposed these days is the continued dissipation of the assets of the Philippine Communications Satellite, Inc. (Philcomsat). [The Republic of the Philippines holds 34.9 percent of the shares of Philcomsat through its ownership in Philippine Overseas Telecommunications Corp. (POTC), the holding company.]
The magnitude of the plunder that has been wrought on the country’s pioneer satellite telecommunications company and once the biggest in the industry, has reduced Philcomsat to a hideous mutant of its old self, a corporate monstrosity that has gone financially berserk. Once a cash cow that streamed out P770 million in cash dividends to the national coffers, Philcomsat today is being led to pasture by two sets of hands tugging at opposite and contentious directions. It currently functions – malfunctions, would be the more appropriate word – with two sets of board of directors, one of them trying to seal deals that would leave its founder, Potentiano Ilusorio, turning over in the grave.
The company gobbles up over P1 million per day in operating expenses and is projected to spit out a loss of over P200 million this year. Worse, there is a mixture of improbable business ventures which were either financed or undertaken by Philcomsat. Imagine, if you will, the skewed business sense that prompted Philcomsat to pour outrageous sums into ventures that have nothing to do with its main line of business. What will it profit Philcomsat, for example, if it hands out a P390 million interest free loan and allows itself to get entangled in a highly-fraudulent real estate transaction disguised under a merger that translates to a total cost of P873,654,879.00 to Philcomsat? Add to that the perks that never seem to bottom out for its executives, directors and government representatives and you have financial ruin in astronomical proportions.
Philcomsat, to stretch the metaphor a bit farther, has gone out of orbit and is headed into deep space, dragging with it a payload worth billions – P2,455,293,409.17 as of CY 2000, to be exact. If this self-induced financial hemorrhage remains unabated and if the value of its shares continues on its downhill anemic plunge, the company can very well be expected to enter into its final gasp of existence this year or early next year.
Which brings us around to the unkind thought that maybe – just maybe – the Presidential Commission on Good Government (PCGG) is not aware of what is happening to one of its wards. If ever it is, perhaps, the awareness takes the form of an appalling indifference or, worse, a lack of firm resolve to put things aright in Philcomsat. One recalls the efforts of the Senate blue ribbon committee in 1989, when it put the PCGG on the carpet on account of anomalies in certain sequestered corporations, including Philcomsat. The blue ribbon committee had instructed the PCGG back then to supervise Philcomsat, among others, in accordance with the law and rules and to make them profitable. Fourteen years later, the unrestrained cycle of plunder of Philcomsat stands out as one of the most compelling reasons for the abolition of the PCGG.
The PCGG has been overseeing Philcomsat since 1986, when the government first sequestered a sizable number of its shares. Subsequently, these shares were surrendered, after a compromise agreement between the shareholders and the PCGG, and approved by the courts. The compromise resulted in the 34.9 percent stake of the Republic in Philcomsat, equivalent to three seats in the nine-person board. It is arguable since the shares now belong to the Republic and the company is no longer sequestered. Philcomsat should not continue to be under the auspices of the PCGG.
Given the cancerous state of Philcomsat finances and the political and corporate problems involving the competing boards, the current PCGG should allow the law and prior court decisions to operate in due course, and should respect the agreements made by its predecessors regarding ownership of shares, voting rights and the decisions that hew to the Corporation Code. The PCGG should also recognize that neither the PCGG nor POTC/Philcomsat is the forum where intra-family grievances should be settled or resolved – such feuds have their place in the courts where they already are being litigated. The PCGG should act expeditiously – right now and not fourteen years later – if we ever intend to bring back Philcomsat to its rightful, steady and profitable course.
If, despite this urging, the PCGG still remains indifferent, perhaps, now is the time for the Senate to act on Senate Bill 215 of Sen. Serge Osmeña, who is calling for the abolition of the PCGG. Osmeña’s rationale points out the PCGG was a creature born immediately out of the euphoric daze that enveloped those who thronged at Edsa in 1986. By Executive Order 1, Cory Aquino created the PCGG, to recover the ill-gotten wealth accumulated by the Marcoses and their cronies and prevent the dissipation of assets involved. Seventeen years after its creation, the PCGG has produced very little by way of substantial accomplishments and actual results to justify its continued existence.
Osmeña’s bill, therefore, proposes the abolition of the PCGG and the transfer of its functions to the Department of Justice, which is in keeping with the policy of trimming off excess units and streamlining the bureaucracy.
And before its bows out as an agency that has outlived its usefulness and frittered away its chances to greatness, the PCGG should crack the whip and put an end to the plunder of Philcomsat, if only to redeem itself from its unimpressive, lackluster and even questionable association with Philcomsat.
Details of the specific cases of plunder of Philcomsat assets will be presented in subsequent discussions in this space.
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