Under Gloria Arroyo, employing similar gambits, the government attempted to raid a conglomerate whose media affiliations posed problems for Arroyo’s incumbency. Never mind that the targeted institution was a public utility critical to the economy and where political infestation might be toxic. Never mind still that in both instances of capital intervention, share values did not simply distort, they changed the risk profiles of the pensions involved.

At the business school where I handle the finance and credit management programs there is an ironic truism bandied about as an absurdity and as an introduction to credit. When asked as to who is at the losing end of a hundred peso debt between a creditor and a debtor the usual answer is that the borrower has the larger burden. However, when asked as to who loses when the amount is in the hundreds of millions, ironically, the lender has the larger liability. Such bias underlies debtor relief and protection under Chapter Eleven and most bankruptcy laws.

The severity of the truism has been demonstrated repeatedly where huge creditors fall from non-collectible debt. Perhaps the best example in recent times is the failure of Fannie Mae and Freddie Mac and other liquidity providers and guarantee agencies in the face of recent U.S. sub-prime mortgage defaults.

In the Philippines debt deficiency judgments are often biased against lenders. Creditor giants can be toppled, their coffers fleeced and pillaged.

Of the funds vulnerable to poaching, pensions are probably the most victimized. Innate characteristics render it susceptible. Using a watershed example from the middle of the last century spanning over fifty years and arraying details against inherent pension vulnerabilities we will illustrate a classic modus confronting pension funds.

Albeit an ancient case where both memory and documentation fade with the passing of time, it quickly turns relevant given the modus operandi employed and the reality that corrective processes and statutory reliefs not only plod excruciatingly slow but can be waylaid. In this example, one pension stands to lose beyond Php 1 billion – an amount the victimized pensioners cannot risk to folly and fraud.

By its very nature, pension funds are mandated to allot a portion of its portfolio to financing the debts of members. Unfortunately this captive debtor market presents relatively higher risks.

Aggravating the charge, pensions are obligated to offer concessionary terms often mismatched with a debtors risk profile. Had the choices been wider and the market more competitive, risk premiums would have compensated. In a pension’s portfolio, they don’t. This vulnerability is remedied only by belated foreclosures.

In our benchmark case, in the 1950’s, one pension had lent over Php 3 million against mortgaged parcels of land that were to be developed into a residential subdivision. These were eventually foreclosed when the debtor failed to repay. The pension then liquidated the mortgages and its owners had changed several times over in the course of time.

Another vulnerability of pensions is that its funds are like gold-gilded beacons that attract all sorts. Moreover, because they are pensions and await pay-outs based on the actuarials of members, they are intrinsically long-term and relatively dormant.

That’s an additional risk faced by pensions. The time element and the dormancy render these financial sanctuaries and repositories vulnerable to controversial claims. More when these are saddled with documentation and records often archived in equally dormant morgues and crypts.

Desecrating sanctuaries is not uncommon. It simply takes an army of smart-ass lawyers to comprise a raiding party. In our case, decades after the liquidation of securities to pay for the debt, an individual claiming to be a widow of the original debtor’s son appears with a Php 1 billion claim. The widow claimed that part of the assets that secured the loan were never mortgaged to the pension but was included in the liquidation after mortgages were foreclosed. She demanded restitution.

The sudden appearance of widows is classic and pension history and lore is populated with these, compelling us to view resurrected claimants as another form of vulnerability.

The pension replied that the claimed lots were indeed never part of the mortgage, having been excluded in the mother title, and sold to third parties, not by the pension fund but by the original debtor outside of the loan transaction. In fact 60% of the claimed lots were sold by the borrower prior to the loan and thus could not have formed part of the mortgage. Records and documents show ownership in the names of third-party purchasers and not under the pension’s assets. A pension cannot pay what it never owned.

It is unfortunate that pension funds bear inherent defenselessness. It’s bad enough that state pensions are used for political ends. Academic vulnerabilities however turn even more tragic when the pension involved might be our Government Service and Insurance System, and that the funds exposed to the controversial claims of widows and their attorneys are those of the already victimized public school teachers, elderly and disabled pensioners and lowly-paid government employees.

He didn’t come with a swarm of guards, in he strode in sombre black – bright, naked. His face was clear though, belying the long day of endless talk and consultation. I have met many politicians in the last year and a half. Sins committed in wielding power weather faces quickly. Lying and cheating shadow eyes. Too, I have become quite adept at detecting bullshit. I do not impress easily. I was neither impressed nor lied to.

He sat in comfort in front of us, the bloggers on either side, cameras in corners. It was an intimate tête-à-tête. I was less than 1o feet away. One quivers in the presence of power, invisible strings pull the spine to straight, the feet to point in the correct direction. One is instantly on alert – as when a predator eyes her prey. I felt no such tension in the presence of the son of Ninoy and Cory Aquino. I took pictures freely, tried to key in notes, whispered side comments with other bloggers. I slouched.

Noynoy rambles. He does not answer tout court. One can picture his thought processes – the ideas meander, linger on certain subjects even as they skim with quickly over others. He peppers his sentences with endless statistics. Mid-way I was bored. I blame it on the sound system. The audio inside the big hall was horrible.

I had prepared three questions, one on RH, one on rural development and one on public debt. By the time my turn came to ask, I had gotten so bored with the policy issues I’d changed my question. In the end I addressed my question in Filipino because I remembered he seemed to connect better with his audience speaking in the vernacular. What were you thinking as you were deciding whether to run for office after your mother passed away. Why would you take such a difficult job, cleaning after the Arroyo administration. Hindi ba parang kumuha kayo ng bato na ipupukpok sa ulo? I thought I heard snickers.

He answered, as with his previous answers, in that circuitous manner. The core message is lost in the minor crests and dips. His words traveled from his lips to my ears and my brain discerned that his answer, in brief, was that he could not miss the opportunity to create change. I sat back, unmoved. I did not get the answer I wanted. I was no closer to getting a better sense of his motivations for running as I had before sharing breathing space with the good senator.

But what did I expect? Noynoy does not have the gravitas of men and women who command loyalty by simply being. He has not the charm of his father nor a revolution brewing in his favor as his mother. All he has are his shoulders frail. Here is a man who had indeed chosen to pick up the biggest rock in sight and to willingly strike it on his head. And he does it not for naked quest for power. Megalomania is to Noynoy as sweet is to brick. These properties do not compute.

These days, his noticeably thinner body seems to bow under the weight of his assumed burden, this man who has had no great aspirations to power, this man who has had no messianic pretensions. In running for the highest office in the land at a time of great crisis, perhaps Noynoy only wishes to honor the memory of his mother and father, and in doing so resurrect in all of us what was was great and proud in the Filipino.

Dear Mr. Senator Noynoy,

Allow me the liberty of calling you by your nickname.

As you turn into ‘gold’  on your 50th summer  Filipinos are betting on you becoming this land’s 15th Prezident -  aA Presudent with a fresh, unquestioned electoral mandate, a mandate quite unlike the woman you are succeeding.

I realize you feel burderned.

Not only are you embarking on a task that your recently deceased mother took on in the aftermath of the Philippines world-inspiring people power revolt.

Your father’s martyrdom enabled Filipino to rediscover their commitment to democratic institution that the dictatorship left in tatters.

Your mandate, should you obtain it in our first ever computer-saided voting system, will allow the Philippines to vanquish the demon of Dagdag Bawas.

Yours will be a mandate  clothed with the political capital that you can expend to fight corruption, a mandate that can open the path to  effective and responsible governance, a mandate that can bring progress that trickles do to our poor toiling masses.

The news reports this weekened quote you as saying:

I really cannot focus on myself now and only The One who knows all things can say what will happen to me, and that includes getting married.

So how can one be selfish and think only about himself? I was talking to one of my friends and we said sometimes it could really be tiring. You want to just smash your head into the wall.

But you cannot turn your back on what you had seen all throughout your life.

So when (people) come knocking and say you still have to do something, there is no way you can say no.

You ask me about personal matters growing up. What I experienced was how it was being pressured (by the government) because my father was in the opposition.

Even their gardener, my nanny, and my father’s bodyguard were detained and tortured because of their connection to the Aquinos.

I will continue my advocacy for a corruption-free government.

Recovering the P280 billion lost in corruption every year would make a big difference in the lives of Filipinos.

I was in North Cotabato and saw the airport there still unfinished. It will only cost P100 million, such a small amount compared to what we lose to corruption.

Thank you for making these ’sacrifices’, Sen. Noy.

But talk is cheap.

I will paiently wait for those words to turn into action.

A final note – weeks ago you promised to tell  Filipinos you would decide on how to resolve the Gacienda Luisita Grarian reform promblem in a just and fair manner.

Have you forgotten yours?

Is this the same fate that awaits your other campaign promises?

If this is so, it may be best that you don’t make Ms. Shalani Soledad wait too long.

Happy birthday po.

This anonymous tipster sent me documents about the case. What I thought was a simple land dispute was even more complicated. It included fraud and what I think is a collusion between Optimum and some Bangko Sentral officials. I still have yet to find the people behind this case. What I know is that the person involved in this case is now in hiding. I wa also told that CB officials are mum on the case.

I’m publishing these documents for your appreciation. I leave it to you if you find it credible or not. You may just be as shocked as I was.

It is widely held belief that Senator Manny Villar’s heavy spending in political advertisements was the chief factor that helped him narrow the gap between himself and presidential race frontrunner Senator Benigno Aquino III in the latest SWS and Pulse Asia opinion poll surveys.

The common belief goes that you need money to buy ads. The more ads you place, the more chances of getting your message across to voters. Therefore conventional wisdom goes that, in an election, the one who has the largest war chest wins. Even Noynoy bought it.

Certainly, money is a factor in an election. But does money, as the conventional wisdom dictates, necessarily translate into votes on polling day?

I used to believe the conventional wisdom until I got hold a few years ago of the 2005 New York Times bestseller Freakonomics, authored by economist Steven Levitt with Stephen Bubner. “Indeed, election data show it is true that the candidate who spends more money in a campaign usually wins,” writes Levitt. “But is money the cause of the victory?”

To figure out the relationship between money and elections, Levitt suggests considering the dynamics involved in campaign finance. “Let’s say you are the kind of person who might contribute $1,000 to a candidate. Chances are you’ll give the money in two situations: a close race, in which you think the money will influence the outcome; or a campaign in which one candidate is a sure winner and you would like to bask in reflected glory or receive some future in-kind consideration. The one candidate you won’t contribute to is a sure loser,” Levitt muses.

“Now picture two candidates, one intrinsically appealing and the other not so. The appealing candidate raises much more money and wins easily. But was it the money that won him the votes, or was it his appeal that won the votes and the money?”

Levitt says the answer to that question is very difficult to answer because voter appeal can’t be measured in numbers just like economic data. “It can’t, really – except in one special case. The key is to measure a candidate against … himself.”

You can gauge the money’s impact if you have two candidates running against each other in two consecutive elections, Levitt explains, and compare their spending and the election results. So Levitt pored over decades of U.S. election data.

“As it turns out, the same two candidates run against each other in consecutive elections all the time – indeed, in nearly a thousand U.S. congressional races since 1972,” Levitt finds.

“What do the numbers have to say about such cases? Here’s the surprise: the amount of money spent by the candidates hardly matters at all. A winning candidate can cut his spending in half and lose only 1 percent of the vote. Meanwhile, a losing candidate who doubles his spending can expect to shift the vote in his favor by that same 1 percent. What really matters for a political candidate is not how much you spend; what matters is who you are.”

So, the key to victory is to tell voters who you are, make sure that what you say matters to voters, and get your message across clearly. If people buy what you’re saying, you win – whether or not you’re selling truth or lies.

Pres. Arroyo was in Iloilo to inaugurate an IT project.

So when a journalist asked her about the dismal ratings of her anointed ‘presidentiable’, Gilbert Teodoro, she got angry and, according to reports, nearly walked out of the news conference.

Trademark GMA.

Imperious as she is, she deals with people, journalists in particular, only on her terms.

Come to think of it. Her ideological clone (read trapo), Manny Villar, sports the same emperor’s clothes.

He ignored the Senate’s hearings about his conduct in the C5 road project, delivered a speech making blanket denials before leaving in a huff, then made sure the senators loyal to him boycotted the censure vote.

The duo don’t realize that people see through those clothes, transparent as they are.

What do the clothes reveal?

The arrogance, the unwillingness to reply to legitimate public queries, selective readiness to account for their actions as officials of the land, and the inability to read the writing on the wall.

The atheists and the Freedom from Religion Foundation were up in arms and vexed with the idea that federal funds would be spent to favor Mother Teresa’s Catholic faith and therefore infringes the first amendment and demolishes the wall between State and the Church. It has long been laid to rest that government money cannot be spent to favor one religion unless the activity has a secular purpose. Mother Teresa who was beatified by Pope John Paul II in 2003, was not overly partisan over her faith as she found compassion and had lived with Muslim, Hindu and Buddhist in India. She has not called members of the other faith “infidels”.

She would be honored for her humanitarian efforts and for touching the lives of millions of underprivileged children and adults all over the world and not for her being a Catholic, though it was her faith or her misgivings about it that made her persevere through the darkness of apathy in our midst.

Her service to humanity dims whatever religious faith she may have. It is very easy to find secularism the way the postal money would be spent in this regards.

Postal officials though had expressed surprise at this protest considering that the USPS has a long list of previous honorees with strong political backgrounds, including Malcolm X, the former chief spokesman for the Nation of Islam and Dr. Martin Luther King, Jr., a Baptist Minister and co-founder of the Southern Christian Leadership Conference.

It seems that there is only a constitutional breach of the “first amendment” if a Catholic believer is about to be honored by the State and not when other members of the faith would get the accolade.

While the issue of separation of State and Church was enshrined in the first amendment only as safeguard against the State’s dispensing undue favor to a particular faith over another, the atheists have read it to mean that the State can favor other religious groups other than the Catholic faith.

Love, compassion and justice which are the basic tenets of almost all religions on earth should have been the bedrock of every government. It is in our effort to detach these lofty principles from the government that makes our bureaucracy evil and corrupt.

The SWS says these are the twelve leading senatorial aspirants. Who among them will go one to take office after May 10?

“Derelict?”

“You haven’t heard of Toto’s testimony on the events that led up to the massacre?” I asked.

“I just arrived, my friend,” he replied.

“Then I’ll update you.”

“Shoot.”

“Shooting came at the end, buddy. Anyway, the feud started in 2006 when Toto decided to run for governor against Ampatuan Sr.”

“The killings started in 2006?”

“No, Ampatuan was able to dissuade Toto from running.”

“How?”

“He told Toto three new provinces would be created and one would be for him.”

“Great.”

“Unfortunately, Toto’s province never materialized.”

“And that’s when the killings started.”

“No, because Shariff Kabunsuan province was created and Toto’s brother, Freddie, would, by law, become vice-governor.”

“And Freddie lived happily ever after,” he smiled.

“No, Freddie was not allowed to assume office because Ampatuan preferred Toto.”

“And that’s when the killings started.”

“No, because two new municipalities were created specially for brothers Freddie and Sajib.”

“And peace reigned.”

“No, because in 2007, Toto was again thinking about running for governor.”

“And that’s when the killings started.”

“No, because Ampatuan, accompanied by Toto’s uncle, Congressman Pax Mangundadato, called on Toto. Uncle asked nephew not to challenge Ampatuan and nephew told uncle he wouldn’t.”

“And Ampatuan lived happily ever after.”

“No, because Toto changed his mind again.”

“What happened next?”

“Soon after Toto reneged on his word, the provincial police director of Maguindanao confiscated the guns of Toto’s municipal police, for inventory purposes.”

“Inventory as a precautionary measure, clever,” he said.

“Another precautionary measure followed. This time the Maguindanao police chief, backed by the 76th and 601st infantry battalions disarmed the police force of Pandan where Toto’s brother was mayor.”

“And that’s when the killings started.”

“No, because the next day, July 9, 2009, Toto went to Pampanga to personally report the incident to Gloria Arroyo. She immediately phoned AFP chief Ibrado and ordered the guns returned.”

“So she believes in a level playing field.”

“In a strange way, yes. But Gloria worried the situation would get out of hand. So 11 days after Toto’s visit to Pampanga, Gabby Claudio, her chief political adviser, tried to reconcile the feuding clans. But no ‘kissy-kissy’ took place. A second meeting on Aug.11 also failed.”

“And that’s when the killings started.”

“Not yet, because Toto asked then defense secretary Gibo Teodoro to relieve Maguindanao police chief Dikay and Col. Medardo Geslani, head of the 601st IB, and Teodoro said he would look into it.”

“And Toto lived happily ever after.”

“No, because nothing happened. But Teodoro met with Toto again on Oct.10 and told Toto, “Don’t run for governor. I care for you a lot, Toto. You know those people (Ampatuans) are prone to violence.’”

“That’s all Teodoro did?”

“Yes. But in early November, the month of the massacre, former congressman Prospero Pichay of Lakas-Kampi phoned Toto and repeated Teodoro’s warning.”

“So Toto was warned but he didn’t back off and so…”

“You’re blaming the victim.”

“Am I?” he taunted.

“Yes, like Gloria’s mouthpiece Gary Olivar.”

“Really?”

I quoted Olivar, “In terms of fair warning and due notice, it seems that we were not negligent. I’m not sure what else ought to have been done. At the end of the day, it was the decision of the candidate if he would proceed with his candidacy based on the information he had received.”

“He’s right,” my friend insisted.

“Gloria could do nothing beyond warning Toto?”

“What else could she do?”

“Plenty, read the riot act to both factions, replace the police and military units assigned there, disarm both sides …”

And that’s when my supposedly clueless friend suddenly quoted Teodoro.

“When I became defense secretary, there were threats from the MILF, a possibility that war could erupt, Christians were fighting, and kidnappings were happening all over the country, so we cannot disarm. We couldn’t sustain it and it could have lead to more trouble,”

“Well, Gloria found the political will to disarm Maguindanao after the massacre, didn’t she?” I shot back.

“Obviously her newborn political will was the stepchild of her political won’t.” He laughed.

I’m reserving comment for now and will defer to thre boys and girls in the room to take the first crack.

Here is how the presidential aspirants are doing, as tracked by the Social Weather Stations.

(Graphics from ABS-CBN News On Line, candidates’ avatars added)

The story is here:

http://www.abs-cbnnews.com/nation/02/01/10/aquinos-lead-down-7-points-january-sws-survey