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OpinYon Issue14

OpinYon Issue14

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Published by: Sara Jane on Nov 23, 2010
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NOVEMBER 22 - 28, 2010 Vol. I, No. 14
San Miguel und-raising sparks alarm bells
Can Small Medium Enter-prise Market absorb San Miguel Corp.’s huge unding requirement.
Opinon inspi
 Ater 13 issues, theOpinyon’s editorial sta, as with Linggoy Alcuaz, takepride in the papers strong stand on issues o the week.The paper takes positionon national issues withoutbeing partisan.In answer to accusation thatit is an opposition paper, we say it is hard hitting butnever partisan. It politicizeseconomic issues and giveeconomic perspective to po-litical issues. We are guidedby this editorial policy.
Read page 4
publisher’s notes
ISSN 2094-7372
The Only Opinion Paper, We Take A Stand
stoRy on PAGE 2
By Al Labita 
Who is MVP? He may have built a ormidable businessempire and reaped prized accolades, but behind the açade o corporatecoups hides what critics tagged as “unethical” dealings in the past.
Ramon m. BoRRomeo 
Ramon is an executive who enjoys cooking occasionally for family and friends.
Solo V. TiBe 
Solo is engaged in litigation and management consultancy.
Consumer pain, utility in system loss
P-Noy’s WastedInheritance
We politicizeeconomic issuesand give economic  perspective to political issues
New columnists, new perspectives 
n o V E M B E R 2 2 - 2 8, 2 0 1 0
te ol op Paper,
We Take a STand
Take, or instance, thePhilippine Long DistanceTelephone (PLDT).Until now, taipan Alonso Yuchengco can’t get over thatincident in 1995 when he was“orced” to yield his amily’sinterests in PLDT to Manuel V.Pangilinan in his bid to seizecontrol o the telecom giant. At the time, Pangilinan– oten reerred to as MVP-- acted as managing direc-tor and chie executive ocero First Pacic Co. Ltd, theHong Kong-based fagship o Indonesian tycoon SoedomoSalim.Salim, whose core busi-nesses range rom banking totrading, noodles manuactur-ing and property ventures, wanted to expand to the Phil-ippines. And that task ell onMVP who started his career asan investment banker.In PLDT’s buyout case,MVP reportedly pulled stringsin high places with no less thanthen president Joseph “Erap”Estrada and his “corporategenius” Mark Jimenez as his“acilitators” supposedly or a“ee.”
“Unholy alliance”
That caught the eye o Senator Panlo Lacson who,in his privilege speech in 1998,exposed the “unholy alliance”between Erap and MVP.“The bigger and moreimportant question remains: What was the deal in pesosand centavos between Mr.Estrada and Mr. Pangilinan, i any. Or, should we rather ask,how much was involved?,”Lacson said.Oodles o money allegedly changed hands in the PLDTdeal. A P100 million checkpurportedly issued by MVPto Erap was later traced by probers o his corruption caseto the “Jose Velarde” bankaccount.The lawmaker’s expose’marked the rst time thatMVP’s name was dragged inthe tricky politics o business. Yuchengco, ounder o theRCBC banking group, con-rmed Lacson’s expose’ andcomplained that he was sub- jected to alleged harassmentand arm-twisting by MVP’sminions to sign a waiver.He held roughly an indirecteight percent equity in PLDTthrough a holding rm, thePhilippine Telecommunica-tions Investment Corp., PLDT’scontrolling stakeholder led by the Cojuangco amily.
Bowed to pressures
Though Yuchengo’s inter-est in PLDT was deemed aminority, he had an ace uphis sleeve -- his right o rstreusal. Meaning, he had theright to match or exceed any bid.To MVP, the taipan was ahindrance to his grandioseplan to conquer PLDT andhe had to resort to all meansand at all costs to hurdle suchobstacle. And indeed he didsucceed. In no time, the taipanbowed to pressures.Poor “Tonyboy” Cojuangco.For a time, MVP allowed himto remain as PLDT non-exec-utive board chairman. MVPeventually yanked him outand took over as chairman.Tonyboy’s ate could likely beall on current Meralcochair Oscar Lopez. Though hisamily still holds a minority stake at over 13 percent, thatcould eventually be dilutedas MVP is poised to raise hisstake in Meralco rom 41 to 46percent.Until now, not a ew clanmembers still agonize overhow they lost the covetedpower rm to MVP.They eel betrayed thatthe purchase deal worked outearly this year by Pangilinan,the “point man” o wealthy Indonesian tycoon Salim, waskept under wraps all along. Ater steering Meralcoor 24 solid years, raising itsprole as one o the country’smost protable rms, ManuelLopez suddenly ound himsel booted out by Pangilinan aspresident and chie executiveocer.
In recent talks to reporters,Lopez could not hide his rus-trations over their company’ssudden change o ownershipin the blink o an eye. He venthis ire on patriarch Oscar ororging a “secret deal” withPangilinan.Until now, animosity stillpersists among siblings o theonce high-prole Lopez am-ily, the landed gentry in Panay island who used to controlMeralco, their crown jewel inthe power supply business.They have yet to gain a ullgrasp o how they lost Meralcothey inherited rom their greatgrandparents. More thanpesos and cents, Meralco wasintertwined with the Lopezamily’s tradition o businessacumen.MVP had previously eyedSan Miguel Corp (SMC),southeast Asia’s largest ood,beverage and packaging rm.But SMC chair Eduardo “Dan-ding” Cojuangco Jr. quickly rebued him.Danding, who had a tightgrip o SMC, likened MVP tothat o a “parachute investor” who he thought had no long-term interests in the company except to ride on its growthmomentum.Then came the governmentauction in 1995 o the 214-haprime property in Fort Boni-acio situated on the ringeso Makati city. The property isnow part o Taguig city basedon a Supreme Court ruling. An MVP-led group ten-dered a whopping 39 billionpesos bid or the property, thehighest among bidders, beat-ing Ayala Land, Inc.
But the Ayalas, embarrassedin losing out to a strange new-comer in the property busi-ness, blanked MVP in every step o the way in his eorts totransorm the sprawling areainto his envisioned “Globalcity.” Apparently stung by the dose o his own medicine,
ycegcMael Lpezocar LpezLacCjagcZbel de AalaEradaGkgweJmeezB KARLo GoMEZ
Consumer groups seeking tofoil the Manila Electric Co.’s(Meralco) plan to increase
energy rates might ndthemselves baling a newfoe. The debt-stricken Lopezeshave appointed Manuel V.
Pangilinan as their “legacy
asset’s” new chief, which iswidely believed to be a move
to save them from the brink of 
nancial demise.Pangilinan now sits as thepresident and chief execuveocer of Meralco, and controls
more than 40 percent of 
the country’s biggest powerdistributor’s shares throughPhilippine Long DistanceTelephone Co., Metro PacicInvestments Corp, and FirstPacic Holding. Meanwhile,Manuel Lopez remains a non-execuve chair. He publiclyexpressed his alacrity to buy
more shares to gain control of 
the ulity.In a published report,
Pangilinan sought to increasehis shares by up to 45 percent
by eyeing shares held by
Eusebio Tanco’s group.
Generally perceived by thepublic as a posive force toreckon with in the businesssector despite plagiarizinga commencement speech,
Pangilinan’s historic plunge
into the energy industry couldbe unwelcoming to the 4.8million capve customers of 
Under Pangilinan,
Meralco is seeking to invest
in generaon facilies thatare projected to deliver atleast 1,500 megawas for thenext ve years according toreports. These planned powergeneraon facilies may costthe power distributor morethan seven billion pesos,which will be charged to
customers once energy hikes
are approved. Pangilinanclaims that this strategy willlessen the generaon costs
that comprise 60 percent of consumer’s bills.
However, skyrockengpower rates pose a major chal-lenge to Pangilinan, includingconsumer advocates’ demandto refund the extra charges.In all these consumer issues,Pangilinan has kept mum andrefused to parcipate in the
ongoing hearing at the EnergyRegulatory Commission.
Also, the consumers aredoubul of the corrupon-free image associated with
With Meralco’s addion to
the roster of his gargantuan
acquisions, Pangilinan is
set to rule the local business
scene with a phalanx of HongKong and Indonesian-basedcohorts from First Pacic withquesonable moves andintenons.By becoming acve playersin the energy business, thequeson is what interestsFirst Pacic and its foreignenes have in managing and
controlling Meralco. Although
Pangilinan never promised asweeping change, the capvecustomers are entled to fulldisclosure of his objecves
that concern the management
and direcon of the company.Nevertheless, the obtrusive
capitalist trait of Pangilinan
which he shares with theLopezes will always be ahindrance to forging beerbridges to the consumers. Forone, his corporate orientaonalways seems to favor private
actors than consumers.
For consumer groups, thebale could be tougher withFirst Pacic at Meralco’s helm.
Captie customer’s new oe
Frm page 1
MVP gave up his interests inthe property and sold themto rival Ayala group even at aloss.That decision to divest only conrmed market talk thatMVP was not a long-term in- vestor and was only engrossed with his short-term passionor money.PLDT’s nancial ortune isaltering due to erce compe-tition in the telecoms market,the reason why MVP hasshited his ocus to Meralco asthe emerging fagship o hisbusiness empire.Like that o the ailed Boniproperty venture, it’s likely MVP will eventually dumpthe telecom giant and sell it o to a persistent suitor – taipan John Gokongwei – who previ-ously mounted a hostile bidto take over PLDT, but MVPblocked it. With MVP’s shiting or-tunes in the corporate world,the more things change, themore they remain the same.
PLDT’s nancial ortune is altering due to ercecompetition in the telecoms market, the reasonwhy MVP has shited his ocus to Meralco as theemerging fagship o his business empire.
te ol op Paper,
We Take a STand
n o V E M B E R 2 2 - 2 8, 2 0 1 0
Doing businessat the BOCnow aster
B Chito JuniA
Traders and importers who
are expecng their shipmentsfrom abroad to arrive in me
for the Christmas holidays haveevery reason to celebrate.
Doing business at the Bureauof Customs (BOC) today is notonly faster, but at a lower costas well, because of the fullimplementaon of its Importand Assessment System (IAS)and the enhanced Risk Manage
ment System (RMS) programs.
While barriers are in place to
detect quesonable shipmentsand high-risk cargoes, releaseof low risk cargoes and ship
-ments of historically compliantimporters can now be done in
30 minutes or less under theBOC’s IAS and RMS programs.According to Customs Com
missioner Angelito Alvarez, theIAS and RMS are just two of themany other programs the bureau isimplemenng to fulll its commit
-ment to deliver faster and world
class service to the public.The IAS’ Electronic toMobile (e2m) system coveringall the bureau’s ports andsub-ports totaling 48, enablesa faster end-to-end cargoclearance process through theuse of mobile broadcasngand internet/Electronic DataInterchange Connecvity.
The RMS operates like a
grading or rang system thatguides BOC personnel in thedeterminaon of low and highrisk cargoes, using the historical
compliance record of shippers/importers.
Based on set selecvitycriteria, all inbound cargoes’
risk levels will be determined.
Those falling under the lowrisk category will be allowedthrough the green lane forfaster processing, while othersmay have to go through strictinspecon in the red lane.In eect, the RMS establish
es a pre-arrival cargo clearance
process for low risk shipmentsand compliant shippers/import-
ers. This program is expectedto encourage and movate
importers to be compliant to
tari laws for faster facilitaon
and release of their shipments.Meanwhile, in its report
for the rst 100 days, thebureau consistently postedimprovements in collecon on amonth-to-month basis, surpass
ing last year’s cash colleconperformance by an averageof P 2.8 billion. As a result theagency’s total cash revenuesfor the period January toSeptember this year surpassedby P 25 billion what it earnedfrom dues and taxes during
the same period last year.
Vis a vis current year targets,
however, there have been
substanal shoralls owinglargely to contracons in theglobal market, the unusualsurge of the peso to the dollarand earlier tari restructuringin compliance with internaonal
The market has shown signsof curtailing the surging peso andthe bureau is pursuing revenueleaks in the past that could makeup for foregone taris.
Moreover, with the
enhanced RMS and IAS, theBureau’s performance in thecoming months is expected tobe even beer.
Originally, it was or low-skilled agri-cultural jobs mainly as plantation workersin Hawaii and then as ruit and vegetablearm workers in Caliornia. Virtually, allbecame permanent migrants. But withthe massive development o the oil andgas industries in the Middle East starting in the sixties, both the occupations andthe temporary 2-3 year duration o the work attracted many skilled constructionand engineering workers to the deserts tothe deserts o the Middle East and thento industrial and manuacturing plants inEurope and other Asian countries. They could earn much better salaries and stillcall the Philippines home.In the last ew years, however, thedominance o the male over the emalein the deployment o OFWs is ast dis-appearing. We have been witnessing adisturbing gender shit as women now outnumber men working in oreignlands. Today nearly 70 percent o OFWsdeployed are women. In the overseasemployment sector, experts claim thissituation is disturbing as women arethe most vulnerable and they work inlow-skilled positions oten without thenormally accepted protections aordedto males. Our domestic workers are notpart o the host government labor orcethus not covered by their labor laws.Lito Soriano, a labor migration expertand a ormer OFW in Saudi Arabia, saysmost o these women are employed asdomestic workers or the champions o industries, decision-makers, and in thehomes o business and government lead-ers in their host country.“As domestic workers they are thecountry’s best PR agents beore industry leaders as they earn the trust o their em-ployers. The trust they earn is a trust alsoearned or their country,” Soriano stated. At this point, domestic workerscomprise over 30 percent o properly documented deployments. To this mustbe added the illegal and human trackeddepartures.Earlier this year, a law was passed thatbans the deployment o OFWs to countriesthat do not have laws protecting migrant workers. Lito Soriano has expressed alarmon the eect o this ban.Following is an interview with LitoSoriano to have better understanding o Republic Act 10022.
OpinYon: Can you tell us about RA10022.Lito Soriano:
RA 10022 is an actamending RA 8042, the Migrant Workersand Overseas Filipinos Act o 1995. Basi-cally, the amendments aim to enhancethe protection o Overseas Filipino Work-ers or OFWs. These include Sec. 3 stating that a host country should have existing laws, protecting the rights o migrant workers, a signatory to and / or a ratieror multilateral conventions, declarationsor resolutions in relation to the protec-tion o workers and migrant workers,and have concluded a bilateral agreement with the government on the protection o the rights o OFWs. As a result, only a ew nations arelikely to meet the criteria mentionedand most o those which will be certi-ed as acceptable are highly developedcountries, thus, the Middle East, North Arican nations, and a number o jobdestinations in Asia that account or 70percent o all land based deployments areunlikely to meet the requirements. Thisnow will denitely aect OFWs as they  will lose their jobs.The government has also amendedthe section on penalties and nes. Thereis now an increase in penalties. I a per-son is ound guilty o illegal recruitment,the [recruitment] agency is also liable.Ngayon kahit hindi ikaw ang nagpa-patakbo ng kumpanya, at shareholderka lang, pwede kang isama sa charge atpwede kang makulong. A person willnow suer 12 to 20 years o imprison-ment and nes are increased up to P1 toP2 million depending on the gravity o the case. Also, ailure to submit reports isnow a criminal oense.
OpinYon: How will the law impactthe amilies o OFWs?Lito Soriano:
The ban on deploymentto non-compliant countries will causean alarming increase in the number o unemployed workers. These prospectiveOFWs have no other option but to seek jobs here. Since unemployment rate isballooning, returning OFWs will become jobless, as well.
OpinYon: What prompted the gov-ernment to pass the law?Lito Soriano:
RA 10022 embodiespast governments’ responses to seekgreater protections or OFWs. The pas-sage o this law without socio-economicimpact studies and proper scrutiny o theproblems concerning OFWs is an indica-tion that the government has overlookedmany areas which should have beencareully examined.
OpinYon: What does the govern-ment plan to do with the OFWs whoare let unemployed due to banningo some host countries?Lito Soriano:
Aside rom the insu-cient knowledge on the real situation o OFWs and their respective amilies, thegovernment has not exerted any eort tostudy the impact and implications o thelaw beore it is enorced. This has urthercaused the government to be unpreparedor circumstances such as massive losso jobs. Likewise, the government hasnot prepared a plan o action or OFWsseeking employment abroad.
OpinYon: Does this law encourage il-legal recruitment due to many restric-tions rather than preventing it?Lito Soriano:
Denitely, yes. As thepolicies get rigid, more migrant workers will opt to take illegal means or undocu-mented migration as an easy way out.Human tracking and corruption in ourairports will thrive.
OpinYon: Does the Philippine gov-ernment have the capability to lobbysuch changes in other countries?Lito Soriano:
I we believe it is thebest way to protect our workers, we couldhave used our long established goodwill with these host countries because we havebeen dealing with them and they havebeen our partners or the past 30-45 years.Diplomatically, this is a disaster o epic pro-portions. We are begging other countriesto provide protection to domestic workersthat we cannot give them here. We simply do not care or their welare. The othercountries are aware o this and we havebecome their laughing stock.
OpinYon: What will happen to OFWsin certifed or not-banned countries who will complain o exploitation,maltreatment, illegal dismissal?Lito Soriano:
The government hasnot crated any provision to cover casessuch as this in the implementing rulesand regulation o RA 10022. Ironically,the law which is supposed to protectthe migrant workers will invite moreproblems and issues concerning bothcompliant and non-compliant countries.
OpinYon: Will the law aect theexistence o recruitment agencies inthe country considering the act thatthere will be a decrease in numbero OFW deployment?Lito Soriano:
Yes, this will impactthe recruitment agencies as we expectlower number o overseas employmentopportunities and limited countries or jobdestinations. The government, however,has not expressed any initiative to respondto the issue on the existence o recruitmentagencies. Other labor exporting countriesexert huge eorts to replace Filipinos as thepreerred workers o host countries.
OpinYon: How do you eel as anagency owner, do you think thegovernment treats you airly as apartner o the OFWs?Lito Soriano:
The government ap-pears to be unjust in the creation o thislaw, not only or recruitment agencies butalso or OFWs and their amily as well.The government has positioned recruit-ment agencies as illegal even when theseare operating inside the law. Sadly, it isambivalent with respect to migration even when it uses remittances in recognizing economic sustainability and growth.
For many decades, about ninety percent o Filipinosworking in other countries were men.
OfW Deployment
B REA Ann sAntos
The ban on deployment to non-compliant countries will cause an alarming increase in the number of unemployed workers.These prospective OFWs have no other option but to seek jobs here. Since unemployment rate is ballooning, returning OFWs will become jobless, as well.

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