The plunder of Philcomsat

E·N·Q·U·I·R·Y
DEMAREE J.B. RAVAL

The plunder of Philcomsat
Sunday, 11 05, 2006

Now that the Supreme Court (SC) has, in no uncertain terms, upheld the power of the Senate to conduct hearings on the plunder of Philippine Communications Satellite Inc. (Philcomsat) and its 81 percent-owned subsidiary, Philcomsat Holdings Corp. (PHC), there should be no further delay in getting to the bottom of the mess that people in high places have chosen to ignore.

The magnitude of the plunder that has been wrought on the country’s pioneer satellite telecommunications company has reduced Philcomsat to a hideous mutant of its old self, a corporate monstrosity that has gone financially berserk.

There may be more surprises to be exposed about the plunder of Philcomsat. Sen. Richard Gordon and his Senate committee will just have to do it fast, put on record everything that has been documented by the Africa/Bildner group, the auditors, banks, car dealers, etc., and recommend the prosecution of those who helped themselves to the assets of what was once the biggest player in the telecommunications industry.

Once a cash cow that streamed out almost P800 million in cash dividends to the Presidential Commission on Good Government (PCGG), Philcomsat today has been led to pasture by a board of directors that seals deals that would leave its founder, Potenciano Ilusorio, turning over in his grave. Consider these transactions which anyone will instantly recognize as plunder: A cash outlay of P390 million for the purchase of 12 hectares of undeveloped, foreclosed land, preliminary to a merger with a realty company, wherein the beneficiary of both cash and merger is related to somebody big and powerful; an investment of P367 million in a company which doesn’t know shit about the difference between telekinesis and telecommunications, and which has since defaulted from its financial obligation and many more.

Philcomsat, like the satellite it manages, has gone out of orbit and is headed into deep space, dragging with it a payload worth billions. When Philcomsat was taken over by the group that devoutly wished the SC would prevent the Senate from conducting the investigation into the plunder, the value of the shares of government in the corporation was P1.4 billion; five years later, it is a measly P200 million. Philcomsat revenues hit P954 million some years ago; today, a niggardly P30 million.

Not content with demolishing Philcomsat, the vultures are now devouring PHC.

A PSE-listed company, PHC had average annual operating expenses of P35 million a few years back, but suddenly registered over P91 million in 2004, leading to a loss of P6 million, even on money market revenues of P84 million. For 2005, the operating expenses of P123 million coughed up a P23 million loss. The PHC directors set up a call center subsidiary which has since siphoned out over P100 million, and counting. The perks never seem to bottom out for PHC’s directors, including the government representatives and their collaborator in the PCGG, who can effortlessly duplicate the financial ruin in astronomical proportions — just like in its parent, Philcomsat.

If this self-induced financial hemorrhage remains unabated and the value of its shares continues on its downhill anemic plunge, the whole Philcomsat enterprise can very well expect to enter its final gasp of existence, if Gordon does not intervene soon.

Clearly, those who are brazenly pocketing the money, claimed — before the high court came down with its decision — to be untouchables, owing to relatives and friends in “high places.” There is no mistaking the identities of these predators, and the evidence so far has already detailed each and every act of every Juan, Manuel, Luis and Ricardo who milked the resources of Philcomsat, then moved to its subsidiary PHC. One of them is a suspended member of the Philippine Bar, who is facing as well a large-scale estafa case; he sits in the board of directors, tenaciously clinging to his seat despite the filing of a disbarment complaint against him by the rightful claimant to the seat. After all, a PHC director is entitled to a “modest” salary cum bonus of P360,000, but partakes of a generous “Representation/Entertainment/Dues” allowance exceeding P16 million in 2005; a P2 million “housing loan,” per director, at six percent interest; company cars like Jaguar, BMW, Land Cruiser and Expedition. Another director, benefiting from the Philcomsat largesse, used to reside at the backdoor to Malacañang, but now he has a sprawling estate in Ayala Alabang and a beach house in Bohol.

And then, again, Philcomsat has been incurring mounting legal bills and liabilities, resulting in expense outlays of approximately P335 million! Nothing can be more criminal than that.

Potenciano Ilusorio, whose brainchild it was to put up Philcomsat in 1965, told me once that his pioneering company brought the Philippines far ahead to the 21st century. The way Philcomsat has been looted the past five years, Ilusorio has been proven wrong. How sad.

The children of Ilusorio, together with the Africa, Benedicto, Poblador and Ponce-Enrile families, who comprise the majority block in Philcomsat, have been waging a lonely battle out there, against the plunderers. Now that the SC has given Gordon the go-signal to go after the plunderers, Gordon should move fast (as in a flash), have the warrants of arrest served on the plunderers, and hold the hearing scheduled for tomorrow.

The PCGG, on the other hand, should crack the whip on its commissioner who goes around town in a Camry, and assist Gordon in his investigation into the plunder, and thereby redeem itself from its unimpressive, lackluster and even questionable association with the plunderers.

Philcomsat and its subsidiary may yet be saved, and Ilusorio may yet be proven right.

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