Uneasy like Sunday morning

(This is a draft of a chapter of a commissioned biography. Permission to publish it in its raw form has been secured on the condition that the names of persons and some companies be changed.)

It wasn’t exactly easy like Sunday morning.

But it was nevertheless the last day of the weekend, a day when people sat back, put their feet up, and relaxed; a day when the world took things slow and shifted to a lower gear, the better to prepare for the accelerated pace of another work week.

For Antonio Valencia (not his real name), June 16, 1974 was a Sunday unlike any other.

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Court orders UCPB to pay client P1 billion

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A PASAY Court has ordered the United Coconut Planters Bank (UCPB) to pay a client an estimated P1 billion after the lender was found to have overcharged E. Ganzon Inc. (EGI), a real-estate developer with properties in Metro Manila. Besides involving attorney’s fees, court suit costs, damages, and interest, the amount covers the various forms of overpayment collected by the Philippines’ thirteenth-largest lender from EGI from April 2000 to May 2001.

In a decision dated December 18, 2007, the court said the company only owed the bank a total of P618 million overall.

In mid-1998, after EGI failed to keep its debt payments current, the lender collected P400 million more than the principal through various transactions undertaken from April 2000 to May 2001. These transactions included foreclosure, or repossessing mortgaged properties whose values were previously agreed upon, and dacion en pago, which allows the use of real-estate assets to pay for debts, provided that both the creditor and the borrower agree on the properties’ values.

Besides declaring that EGI’s debts were already fully settled, the court also instructed the bank to pay the company some P158,378,177.82 in excess of foreclosure proceeds plus 12-percent interest per annum from April 13, 2000 until full payment. This is in addition to P166,127,368.50 in dacion en pago payments plus 12 percent interest per annum from May 8, 2001
aa until full payment, P32,296,77.78 for repossessing movables, furniture, fixtures, and equipment plus 12-percent interest from April 13, 2000 until full payment; P87,578,846.60 for repossessing 28 condominium units in EGI-Rufino Plaza in Taft Avenue plus 12-percent interest until full payment; P1.55 million in court filing fees, P30 million in moral damages, P10 million in exemplary damages, and attorney’s fees equivalent to 10 percent of all amounts due the plaintiff.

“All in all, total payments of plaintiff EGI to UCPB is P1,070,719.368.50, this amount representing the combined value of the foreclosed properties and the properties subject to dacion en pago,” said the decision, penned by Judge Jesus B. Mupas of Pasay’s Regional Trial Court Branch 112.

The UCPB’s lawyer in this case, Atty. Eduardo de Mesa, said he has already filed an appeal to reverse the lower court’s decision.

“EGI is just looking for a way to skip paying its obligations,” de Mesa told the BusinessMirror in a Monday phone interview.

The court had also said that “UCPB committed breach of contract when it foreclosed some of the properties of EGI at merely P723,592,000. The correct valuation of the foreclosed properties is P904,491,052 and it is this amount that must be deemed to have been paid to UCPB when the foreclosure was effected.”

According to the ruling, EGI claimed that “the principal loan amounts, interest charges, transaction costs were padded to reflect a bigger amount of indebtedness.”

For this reason, EGI filed a separate criminal case in a Makati City court against six bank officers in October 2001. Among those named in the suit included Lorenzo V. Tan, the bank’s former president, Jeronimo Kilayko, UCPB corporate secretary and University of the Philippines law professor Virgilio Jacinto, UCPB first vice president Enrique Gana, UCPB vice president Jaime Jacinto, and UCPB assistant vice president Emily Lazaro.

Among the 42 universal and commercial banks in the country, the United Coconut Planters Bank ranked thirteenth in terms of total assets. As of December 2006, its assets amounted to P107 billion, up by 3 percent in the same period in 2005. The bank’s total contingent account in 2006 totaled P41 billion. (With Jesse Edep)

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Originally entitled “UCPB told to pay overcharged debtor,” this story was published at BusinessMirror’s January 23, 2008 print and online editions.

A reader's lament

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A review of “Long and tortuous road to coconut levy recovery” by Romeo C. Royandoyan
Published by Centro Saka Inc. (Philippine Center for Rural Development Studies)
Copyright 2007

NO question about it: Romeo “Omi” C. Royandoyan has done a lot to advance the cause of the Filipino coconut farmer.
Currently the executive director of Centro Saka Inc. (CSI), a non-government group which, among others, undertakes rural development studies, Royandoyan was among the farmer-representatives appointed to the board of the United Coconut Planters Bank (UCPB), thanks to court decisions which ruled that the lender was acquired using funds collected from coconut farmers.
Since farmers technically owned the bank—assets bought using their funds were therefore theirs—they were entitled to representation at the bank’s board, which, in turn, was made possible by the courts and the Presidential Commission on Good Government under the late great Haydee Yorac, shortly after Gloria Macapagal-Arroyo was swept to power in January 2001.
Although Royandoyan, together with fellow farmer rep Jose Ma. “Joey” Faustino, was later removed from the board—presidents are entitled to change their minds especially regarding Marcos cronies—his commitment has never wavered.
To this day, Royandoyan, Faustino, former general Virgilio David (who was brave enough to expose the coco levy scam during the Marcos dictatorship), and many others remain committed to see that the funds collected from farmers are used for their benefit.
After all, coconut farmers have suffered more than enough.
Besides being forced to pay for heavy levies which amounted to P9.6 billion (as of a 1986 audit), coconut farmers have never benefitted from these taxes.
Instead, through a series of complex arrangements which transferred public funds for private ownership, the levies were unlawfully used by Marcos crony Eduardo “Danding” C. Cojuangco Jr. to buy a bank (i. e. UCPB) and acquire a controlling stake—anywhere from 47 to 51 percent—in San Miguel Corporation (SMC), the Philippines’ largest food company.
Although coconut farmers have won significant legal victories against Cojuangco—in May 2007, the courts allowed the partial sale of UCPB and SMC shares, proceeds of which will be held in trust by the government for the farmers—they still remain uncertain when their protracted struggle will end.
Like any other oppressed, disenfranchised, and marginalized group in this country, coconut farmers and their interests are easily ignored, no thanks to a powerful, influential, and moneyed class whose intentions almost always run contrary to the greater good.
This is probably why Royandoyan decided to author a book about the contentious, complicated coconut levy issue: to let the whole world know about what is perhaps one of the biggest scams in Philippine history, perpetrated by one of the most powerful and influential Marcos cronies.
Entitled “Long and Tortuous Road to Coconut Levy Recovery,” the book, published this year, is the very first volume in what appears to be the CSI’s Rural Development Review series.
However, despite its numerous potentials for dramatic storytelling, the book reads like an academic paper.
Which is not flattering at all.
Nor does it help the coconut farmers’ cause.
Had it been written with the regular reader in mind—regular reader here defined as someone who knows absolutely nothing about the issue—the book could have had more chances of generating support for the farmers. In turn, more support could mean more pressure for government to set things straight, underscoring once more the power of the written word; a power properly harnessed by those who sought to change the world.
Unfortunately, of the book’s 184 pages, only a handful of passages
can be considered as powerful.
Rife with legalese, punctuated by vague sentences, the book’s text drastically lacks in narrative what it offers in the way of substance.
Which is unfortunate.
Instead of interpreting, laymanizing, and contextualizing the many legal and technical concepts surrounding the coconut levy cases—there are eight of them in all, one of which involves an attempt at acquiring a stake in Pepsi Cola—the book in its own obtuse way merely replicates whatever the courts have said, possibly contributing to the readers’ confusion.
Nevertheless, Royandoyan’s book—and CSI’s efforts to such work publicly available—represents an important step towards documenting what may very well be one of the largest crimes in Philippine history.