'Golden parachutes'
'Golden parachutes'
Posted 11:41pm (Mla time) Mar 13, 2005
By Neal Cruz
Inquirer News Service
Editor's Note: Published on page A14 of the March 14, 2005 issue of the Philippine Daily Inquirer.
IT looks like many people, including officials in the Arroyo administration, do not believe that her government is going to last long. This early, they are already providing for their future, like rats deserting a sinking ship but with balls of cheese in their mouths. So many shady deals are being discovered, with tens of millions of pesos for kickbacks to the smart ones who cooked up the deals. The P593-million Minimi deal in the Department of National Defense is just one of these. The latest is the privatization of one of the functions of the Bureau of Treasury, which will provide golden parachutes to retiring government and private officials.
The administration wants to transfer the Registry of Scripless Securities from the Bureau of Treasury to a private corporation called the Philippine Depository and Trust Corp. (PDTC). The registry is a record of the loans and debt documents of the government. A private corporation will henceforth do the recording, as though the officials of the Bureau of Treasury do not know how to do such a simple thing. The corporation will collect a fee based on the amount of debt. The Philippines has a peso debt amounting to P3 trillion, so you can imagine how much the PDTC will rake in. The PDTC admitted that it would net at least half a billion a year (but I think this is a very conservative estimate), this only for registering the debt papers.
Even as it will make the shareholders of the PDTC very rich, the transfer will discourage investments in government securities and raise the country's debt burden. It will raise the cost of investing in government securities. Instead of the interest earnings going to the investors, a large part of it will go to the PDTC; instead of the government getting all that it borrowed, part of it will also go to the PDTC; thus the government will have to borrow more to finance its needs. And PDTC officials will go sailing merrily in their golden parachutes just by recording government debts.
The Constitution and pertinent laws are very clear on the functions of the Bureau of Treasury. One of them is to keep the record of government securities. But the Department of Finance and the Bangko Sentral are so hot about the transfer of the Registry of Scripless Securities to the PDTC that they fired the national treasurer, Norma Lasala, a respected banker, just four weeks after being appointed into the position for refusing to endorse the transfer. Appointed to replace her is one Omar Cruz (who he?) whose marching order is to implement the transfer.
Sen. Aquilino Pimentel Jr. will give more details on this deal in a privilege speech today, and he will ask Finance Secretary Cesar Purisima and Bangko Sentral Governor Rafael Buenaventura to reconsider this questionable proposal that favors a private entity at the expense of the people.
By the way, there is a common thread running through the shareholders of the PDTC: they are all alumni of the American Citibank.
* * *
Methinks the administration is going overboard with this privatization mania. Like a drug addict, alcoholic or black sheep of a family, it is selling all the family's assets to satisfy his money needs.
Before the PDTC, the government wanted to privatize the Bureau of Internal Revenue, an idea also cooked up by American lackeys. Imagine the tax collection and part of the Bureau of Treasury, whose job is to keep the funds and keep track of government money, in the hands of private corporations whose primary motive is profit. The government also is in the process of privatizing the National Power Corp., whose job is to provide the people with a basic service, electricity. It has already privatized another basic service, the distribution of water. Next, it will privatize the Bureau of Customs.
This has been proven to be wrong, as shown by the fiasco that is Maynilad Water. The privatization of transportation in Metro Manila has also been proven to be wrong, as witness the traffic nightmare, the colorums, and the corruption. All the cities in the world with efficient transportation have systems run by the government. Not in the Philippines.
After selling Fort Bonifacio, the government now wants to sell the National Mental Hospital and Welfareville compounds, the Veterans Memorial Medical Center, and the Bilibid Prisons in Muntinlupa. It also wants to privatize the Social Security System and the Government Service Insurance System. It has already sold the Tutuban Railroad Station which it now needs for the planned North Rail and the South Rail.
It almost sold Fort Aguinaldo until they were told that they cannot because the deed of donation by the Ortigas family has a provision saying that if the government doesn't need the camp anymore, the property will revert back to the Ortigases.
It sold control of Petron and now we are reaping the whirlwind of that folly. Had Petron remained in the control of the government, it could have countered the greed and opportunism of the other oil companies. But in private hands, it is now a member of the oligopoly raising their prices at will and the government and the people are helpless to do anything.
The privatization rush is not only because the government is bankrupt and needs money. I think the other reason is that administration officials are providing themselves with golden parachutes-through generous commissions from the privatization sales-for the future, when President Macapagal-Arroyo is no longer in power and they are out of their jobs.
Posted 11:41pm (Mla time) Mar 13, 2005
By Neal Cruz
Inquirer News Service
Editor's Note: Published on page A14 of the March 14, 2005 issue of the Philippine Daily Inquirer.
IT looks like many people, including officials in the Arroyo administration, do not believe that her government is going to last long. This early, they are already providing for their future, like rats deserting a sinking ship but with balls of cheese in their mouths. So many shady deals are being discovered, with tens of millions of pesos for kickbacks to the smart ones who cooked up the deals. The P593-million Minimi deal in the Department of National Defense is just one of these. The latest is the privatization of one of the functions of the Bureau of Treasury, which will provide golden parachutes to retiring government and private officials.
The administration wants to transfer the Registry of Scripless Securities from the Bureau of Treasury to a private corporation called the Philippine Depository and Trust Corp. (PDTC). The registry is a record of the loans and debt documents of the government. A private corporation will henceforth do the recording, as though the officials of the Bureau of Treasury do not know how to do such a simple thing. The corporation will collect a fee based on the amount of debt. The Philippines has a peso debt amounting to P3 trillion, so you can imagine how much the PDTC will rake in. The PDTC admitted that it would net at least half a billion a year (but I think this is a very conservative estimate), this only for registering the debt papers.
Even as it will make the shareholders of the PDTC very rich, the transfer will discourage investments in government securities and raise the country's debt burden. It will raise the cost of investing in government securities. Instead of the interest earnings going to the investors, a large part of it will go to the PDTC; instead of the government getting all that it borrowed, part of it will also go to the PDTC; thus the government will have to borrow more to finance its needs. And PDTC officials will go sailing merrily in their golden parachutes just by recording government debts.
The Constitution and pertinent laws are very clear on the functions of the Bureau of Treasury. One of them is to keep the record of government securities. But the Department of Finance and the Bangko Sentral are so hot about the transfer of the Registry of Scripless Securities to the PDTC that they fired the national treasurer, Norma Lasala, a respected banker, just four weeks after being appointed into the position for refusing to endorse the transfer. Appointed to replace her is one Omar Cruz (who he?) whose marching order is to implement the transfer.
Sen. Aquilino Pimentel Jr. will give more details on this deal in a privilege speech today, and he will ask Finance Secretary Cesar Purisima and Bangko Sentral Governor Rafael Buenaventura to reconsider this questionable proposal that favors a private entity at the expense of the people.
By the way, there is a common thread running through the shareholders of the PDTC: they are all alumni of the American Citibank.
* * *
Methinks the administration is going overboard with this privatization mania. Like a drug addict, alcoholic or black sheep of a family, it is selling all the family's assets to satisfy his money needs.
Before the PDTC, the government wanted to privatize the Bureau of Internal Revenue, an idea also cooked up by American lackeys. Imagine the tax collection and part of the Bureau of Treasury, whose job is to keep the funds and keep track of government money, in the hands of private corporations whose primary motive is profit. The government also is in the process of privatizing the National Power Corp., whose job is to provide the people with a basic service, electricity. It has already privatized another basic service, the distribution of water. Next, it will privatize the Bureau of Customs.
This has been proven to be wrong, as shown by the fiasco that is Maynilad Water. The privatization of transportation in Metro Manila has also been proven to be wrong, as witness the traffic nightmare, the colorums, and the corruption. All the cities in the world with efficient transportation have systems run by the government. Not in the Philippines.
After selling Fort Bonifacio, the government now wants to sell the National Mental Hospital and Welfareville compounds, the Veterans Memorial Medical Center, and the Bilibid Prisons in Muntinlupa. It also wants to privatize the Social Security System and the Government Service Insurance System. It has already sold the Tutuban Railroad Station which it now needs for the planned North Rail and the South Rail.
It almost sold Fort Aguinaldo until they were told that they cannot because the deed of donation by the Ortigas family has a provision saying that if the government doesn't need the camp anymore, the property will revert back to the Ortigases.
It sold control of Petron and now we are reaping the whirlwind of that folly. Had Petron remained in the control of the government, it could have countered the greed and opportunism of the other oil companies. But in private hands, it is now a member of the oligopoly raising their prices at will and the government and the people are helpless to do anything.
The privatization rush is not only because the government is bankrupt and needs money. I think the other reason is that administration officials are providing themselves with golden parachutes-through generous commissions from the privatization sales-for the future, when President Macapagal-Arroyo is no longer in power and they are out of their jobs.
posted by Dante at 12:00 AM
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