BSP squanders reserves

DIE HARD III / Herman Tiu Laurel / October 21, 2013 / Daily Tribune

In the midst of the US debt ceiling impasse and the losses it could inflict on the Philippines' GIR (Gross International Reserves) last week, in the report "Top economist chides Bangko Sentral ng Pilipinas for keeping too much GIR" The Tribune writer cited former Budget Secretary Benjamin Diokno's criticism of the BSP holding on to the equivalent to a year's imports and four times the internationally required level of foreign currency reserves the majority of which are in US dollars. One devastating cost is a crash of the dollar if and when a US default occurs. A few days later the BSP's Governor Tetangco and, separately, deputy governor Diwa Gunigundo skirted the implications of Diokno's comment on the GIR in the midst of the crisis.

Diokno's comment reminded me of my previous Tribune articles on the issue. One is my Sept.5, 2012 column "RP: Moody's 'walking debt?'" where I stated that Moody's and other rating's agencies' upgrade of the Philippines is just an enticement for the country and its people to take in more debt when the Philippines is awash in reserves with its $ 83-billion GIR — which in my reckoning is three times more than what the country is required to keep to cover three months imports. The interest on this dollar holding is much lower than the interest on the country's foreign debt and we argued that the huge GIR surplus should immediately be used to pay off the country's foreign debt of $63 billion.

Another article I wrote in early 2011 on BSP mismanagement of RP financial resources, I retrieved from the "Asia Finest Discussion Forum" site entitled "RP wasting $ 30-billion fund." It was prefaced by the site, "The Philippine political leadership and its Financial managers especially those in the BSP better flex their political muscle and show some sovereign testicles instead of being beholden to the Foreign Financial controlling interests led by the Dark cabals." That article I wrote focused on the wasted SDA (Special Deposit Account) that is now about P 1.7 trillion despite BSP reducing interest rates paid on it - from four percent in previous years down to today's 1 percent. In the discussion I touched on the GIR and a comment of former Neda chief Romulo Neri:

"… former Neda Chief Romulo Neri was of the opinion that our dollar reserves of $ 65 billion (2011) is substantially above what the IMF (International Monetary Fund)…. Neri …. believe(s) that 'we can, if we wish to, use perfectly legal means to liberate half of the fund ($30 billion) to jump-start a number of badly needed initiatives…" Neri added that these "… funds outsourced to external managers and invested in longer-dated maturity securities, … The BSP's external fund management program started in 1997 (FVR's time), when a portion of the gross international reserves was invested in long-term instruments. The BSP currently has 10 external fund managers including JP Morgan Chase." These external fund managers do not extend this services for free, of course.

Former Budget Secretary Diokno's comment on the wasteful BSP policy of excessive levels of GIR is actually years behind this columnist and others in raising the questions about the management of the GIR; but better late than never. However, Diokno's timing is good. The US dollar's current crisis highlights the issue for all to ponder and to come up with a responsive new policy. Why are we risking the collapse of about half of the $83-billion GIR if and when the US dollar crashes? Shouldn't the country use this amount to pay of the external debt ASAP? Why are the BSP bosses, Tetangco and Gunigundo insisting otherwise? Are "external fund managers" enjoying "financial pork" with local cohorts?

The questions raised on the BSP's policy on the high level of GIR involves up to P4 trillion of the country's funds and reserves. In interest cost alone it involves hundreds of billions. It involves the major drag on the Philippines' financial independence and economic development — the unnecessary foreign debt the country is carrying. It involves the risk of tens of billions of dollars in reserves that could lose half its value in the course of the US financial crisis. Compared to these issues the current and raging "pork barrel" controversy involves a paltry sum of only tens of billions of pesos, why have the media, the "sow-lons," PeNoy and the public devoted two manic months on the pork barrel controversy and almost nil on the GIR waste and other BSP funds issues?

Is there anyone left in this country, in the legislature or media or public not overwrought with the "pork barrel" scandal that can devote time to asking questions and delving into these BSP issues? The largest plunder is being conducted in the government's financial management sector with the "banksters" of Wall Street and the local financial mafia.

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Aquino-Rychtar-Abaya scheme

DIE HARD III / Herman Tiu Laurel / October 16, 2013 / Daily Tribune

Our commuting public, including this writer, owes Metro Rail Transit (MRT) general manager Al Vitangcol a debt of gratitude. Vitangcol did the study and recommendation that became the basis for the bids and awards committee (BAC) to set the optimum price of a little over $1.8-milion/coach.

Czech company Inekon, which triggered the allegations of $30-million "kickback" demands by certain Department of Transportation and Communications (DoTC) officials, proposed as far back as 2012 $3.3-million per coach. It is the Czech company that painstakingly networked with relations of the Aquino family, employing Steve Psinakis' nephew Yorgis Psinakis as agent, linking with Ballsy et al through presidential cousin Jorge Aquino-Lichauco and working the DoTC through Rene Limcaoco, brother of Cory Aquino gofer Dodi, among others we name in next columns.

The difference in price of what is now the lowest bid in the MRT3 supply of coaches contract at P1.8 million and below the recommended optimum bid price and the final offer of the Czech company of $3.05 million is between 47 coaches against 25 coaches. It is easy to imagine how much more room and comfort our daily MRT3 commuters including me, and my sons who commute to Makati and to La Salle Taft, will enjoy with 47 more coaches against 25 more.

It is clear now that Czech Ambassador Rychtar created the ruckus to sow confusion aiming to abort the best plans of dedicated DoTC officials like first-time government executive Vitangcol who is being made a villain and a fall guy instead of the ideal public servant that he has tried to be.

Al Vitangcol was recruited by former DoTC Secretary Mar Roxas from the private sector, but Liberal Party honchos higher than Mar Roxas (who could be higher?) had other plans for the DoTC. In came Liberal Party stalwart Joseph Emilio Abaya who's not been shy to tell friends that the DoTC is his stepping stone to the Senate in 2016 and then the presidency beyond 2020, hence he had also brought in cronies from the Philippine Science High School and entrenched vested interests with conflict-of-interest within the DoTC such as Manolo Maralit, Wilson de Vera, Marlo de la Cruz (this links to Korina Sanchez and Mar), Dan Palami and Allan Dilay (now GM of PNR) who are all connected with MRT3 maintenance contractors PH Trams and Global APT; and more on these people next issues.

Other than the P 1.8-million recommendation for the optimum price of new MRT3 coaches, Vitangcol radically improved operations: maintenance fee reduced from P1.4-billion per year to P700 million; Insurance cover from reduced from P200 million per year to P96 million; fare box collection increased from 3 to 4 million per day in 2010 to 6 to 7 million in 2012. Averaging the fare box collection to P6.6-million per day, times 365 days a year the total revenues would be P2.34-billion per annum. Take that and less maintenance and insurance cost the MRT3 would still be left with P 1.58 billion. How can the MRT3 be losing money? The truth is, the MRT3 is profiting handsomely and all is paid to the Equity Rental Payments.

MRT3 general manager Vitangcol has been "requested" by the DoTC secretary to go on "indefinite leave" from his post. While Vitangcol had willingly acceded to one or two previous requests to go on leave to clear the air and pending investigations, we are told by our sources that this time Vitangcol has directed the DoTC request to a lawyer. Apparently, this last request for Vitangcol to go on leave is to ease him out permanently, but that's not going to happen without the DoTC mafia of Abaya being the ones to get the ax from the public. We have been shown the paper trail of the Czech company Inekon, the formal communications and instructions from Psinakis, Limcaoco, through Lichauco, to DoTC officials and the trail leads back to the Aquinos, Inekon, Abaya and cabal.

The DoTC and Inekon are now obfuscating the issue using the Yellow controlled or influenced mainstream media newspapers and broadcasters have either never aired the information they have presented or the interviews they have given, and the two major newspapers have even twisted the information they have provided to implicate the "whistleblower" instead. The Tribune, some Internet bloggers and independent columnists have been the sources' reliable avenues to bring the truth about the DoTC-MRT3 scandal to light. At this point this writer believes the DoTC, Inekon and the Malacañang relations' objective is to create confusion, try to bury Vitangcol into obscurity and attempt to disqualify the winning bidder with the $1.8 billion/coach price to supplant this with Inekon's $3.0 million/coach.

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The plunder ‘elite’

DIE HARD III / Herman Tiu Laurel / 10/14/2013 / Daily Tribune

For three decades now we have heard and read how establishment institutions, from school books to Western media, such as Time/CNN, to local mainstream and the addled social media, have portrayed how "plundering" Ferdinand Marcos was. But the desire of BS Aquino, expressed through Speaker Feliciano Belmonte, to expand presidential discretion over, for instance, the disposition of government's share of revenues from the Malampaya natural gas facility reveals just who has the real plundering mindset. And it's none other than the jaundiced, Yellow Edsa I power elite led by the likes of the Aquino family and cronies such as Belmonte.

Marcos' earmarking of the Malampaya Fund to energy-related projects at the project's inception defined a clear sense of priority, propriety and foresight. It indicated the clear understanding of the Philippines' need for continued dedication to indigenous energy source development and protecting the revenues from the Malampaya project from diversion to anything other than that goal. Decades after Marcos set up the energy development programs to create a self-sufficient energy base for the country, we have been witness to a progressive dismantling of that energy self-sufficiency program and, now, the imminent threat of dissipating one of the last sources of funds dedicated to it.

Is the idea of dissipating the Malampaya Fund really BS Aquino's or is it simply Belmonte manipulating his little "tyke" from the Boston years of Ninoy Aquino's exile? The current House Speaker is seen as the epitome of the greed that marks the Yellow decades of governance in this country. In fact, if the public were to look for the root of the Priority Development Assistance Fund (PDAF) schemes, it should call for the investigation of Belmonte and his coterie known as "the Quezon City mafia" that includes Executive Secretary Jojo Ochoa and a one-time treasury chief who is a master in packaging financial instruments to plunder government coffers. Not surprisingly, Belmonte, in the name of BS Aquino, has now set his sights on frittering away the Malampaya Fund to "alleviate poverty and job creation."

Just think about it: BS Aquino and his top House henchman have passed a national budget of over P2 trillion every year. They have allocated over P100 billion for the anti-poverty conditional cash transfer (CCT) program the past years and over P48 billion for 2014. Yet one cannot see where the poverty and unemployment alleviation goes. It's so bad that even BS Aquino and Yellow crony Walden Bello had to admit that recently in the news article, "Global poverty down, Philippine poverty remains high," given the National Statistics Coordination Board data that 27.9 percent live below the poverty line. Worse, National Economic Development Authority chief Arsenio Balisacan, in "Unemployment rate inches up to 7.3 percent in July 2013," even had to admit that the "September 2013 underemployment rate rose to 22.7 percent — the highest since July 2006."

So why is Belmonte coming up with this scheme to divert the roughly P150-billion Malampaya Fund? With three years left of the BS Aquino administration, this gang is showing its intent on cleaning out every fund it can lay its hands on, no matter the scandal that may ensue. This proposal for opening the use of the Malampaya Fund to other than energy-related purposes will ensure its travel down the long drains of official greed and corruption.

While we are wary of any "ouster" moves against a government or president without a prepared alternative, I'm afraid we have to join the call as nothing may be left of the government treasury after BS Aquino and his Yellow cronies are through with it.

Although weakened by the sinking US dollar, the Yellow ruling class, being a collaboration of the US neocolonial overlords and their traditional financial-economic-political oligarchy, prevails because of divisiveness built into Philippine society — from obscurantist religious sects, a military indoctrinated against genuine nationalism, to the addled middle class and "social media," etc.

Impoverished Filipinos now see through the Yellow Edsa I "democracy" and "growth" frauds. Hope lies in the rise of reformist young officers, the militant nationalists, principled "rejectionists" of the Left, and the latent Edsa III forces (if revived in the face of oppression), among other reform movements.

But for genuine social reformers to win, weaving a thread of unity across the progressive nationalist elements is a precondition. Only a meeting of minds of these anti-Yellow forces will suffice.

The time to stop and end the plundering elite around BS Aquino and the Yellows is now. The opportunity to coalesce and win for genuine change is approaching with the anti-presidential pork crusade rising and the US continuing its downward spiral into social and political chaos that not even the resolution of its "shutdown" and its "debt ceiling" crises will stop.

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