VIRTUAL REALITY: Time to buy stocks

By Tony Lopez

Banks have reduced the in­terest rate they offer for deposits, from an average of 2 percent before the current financial crisis to half a percent this year. The shenanigans of the Legacy Group of businessman Celso de los Angeles have become public knowledge. Pre-need plans have gone out of fashion, thanks to Legacy, the failure of CAP and the controversy behind Pacific Plans. Insurance also offers doubtful outlets for investment following the losses of AIG, mother company of the Philamlife group in the Philippines. AIG lost a whopping $61. 7 billion in the last quarter of 2008, the biggest quarterly loss in US corporate history. AIG has received $170 billion in US government loans and capital infusion, yet is giving away huge bonuses to its officers and employees (using American taxpayers’ money). Not surprisingly, Obama is outraged, and so is the American public.

Amid this backdrop, investing in Philippine stocks is suddenly an attractive option. Stocks are selling at nine times the earnings of their companies. Ayala Corp. sells for only five times expected income. If you can wait for two years, there is a good chance you can double your money if you buy stocks now.

Companies listed in the Philippine Stock Exchange represent the country’s largest, the crème de la crème of local business. Many have been around for at least 100 years and are venerable names–like, Ayala (175 years old), Bank of the Philippine Islands (157), San Miguel (119 years old), Meralco (90 years), Philippine Long Distance Telephone (81 years), Tanduay (71 years), and even SM (51 years old). These companies have seen wars and revolutions, survived ups and downs, ridden booms and busts. In other words, they are stable.

Meanwhile, the economy, is projected to grow between 3 percent and 4 percent this year even while two-thirds of the world is in recession.

There is plenty of money. Banks are awash with cash. People have money. Filipinos save an average 28 percent, as a ratio of GDP, equivalent to P2.1 trillion. Filipino expats, ten million of them, remitted $16.4 billion in 2008 on top of the $15 billion they remitted in 2007. In January 2009, they remitted $1.3 billion, up 0.1 percent from January 2008. The Arroyo administration has plenty of cash, with P330 billion in stimulus plan. That money is now being spent on infra and transferring cash to the poor.

Beginning this year, corporations will make an additional 5 percent on their income as a result of the reduction of the corporate income tax to 30 percent from 35 percent. Also, says PSE President Francis Lim, “corporations are now subject to higher corporate governance standards. There is transparency and accountability in large-scale projects.” Lim has worked on a number measures to improve the attractiveness of the stock market and encourage more savings, by workers and would-be retirees. Among these reforms are: the Real Estate Investment Trust or REIT, the abolition of the documentary stamp tax and the IPO tax, the PERA Law, and the Corporate Recovery and Insolvency Act.

The REIT law grants incentives to property companies that have a regular stream of income and declare 90 percent of that as dividends, provided at least 30 percent of their ownership is held by the public thru listing in the PSE. The dividends declared are not taxed.

The PERA Law encourages workers to set aside P100,000 every year (P200,000 for families) for investment in listed stocks. All income from this investment is tax-exempt.

Both the REIT and the PERA Law seek to tap the vast savings of OFWs for investments in the stock market. OFWs remit only a third of their total income and keep the rest because there are just few outlets for their savings if they remit everything to the Philippines. The Corporate Recovery and Insolvency Act provides for orderly bankruptcy and insolvency proceedings for corporations.

The overall effect of these proposed reforms is to encourage more investments in the stock and increase the number of corporations going public. This will spur investments, the formation of more corporations, the setting up and expansion of businesses, resulting in a dynamic and fast growing economy and greater wealth benefits to a wider segment of the population.

FROM THE CAPITOL: UC Eligibility Proposal

By State Senator Leland Yee

On December 9, the University of California (UC) presented to California legislative staff a proposal to modify eligibility standards for freshmen students. Upon reviewing their proposal the Joint Asian Pacific Islander (API) Legislative Caucus along with various community partners are urging the UC Board of Regents to postpone the confirmation of UC eligibility requirements. We are requesting more studies and public hearing to ensure the proposal will fulfill the University of California and California State Legislature’s commitment to diversity.

The new admissions proposal would affect the racial and ethnic makeup of UC’s eligibility pool. The percentage of Asian Pacific Islanders in the eligibility pool would shrink from 32.6 percent to 25.5 percent, including both guaranteed applicants and entitled to review applicants. The UC has not made available sufficient information on how or what aspects of the proposal would cause this decrease.

In a letter to the UC Regent, the Joint API Legislative Caucus has requested a more thorough evaluation of how the new SAT Reasoning Test conforms to the UC testing policies needs to be conducted. A formal evaluation is necessary to ensure that the decision to use aptitude tests over achievement-oriented tests does not adversely impact low-income and minority students.

The state’s Master Plan for High Education directs UC to select first-time freshmen from the top one-eigth (12.5 percent) of all graduates from California public high schools. The UC’s new eligibility proposal would significantly change which and how many high school graduates are eligible to attend the university. It would depart from the Master Plan’s target eligibility pool, increase uncertainty about who would be accepted, and affect the racial-ethnic makeup of UC’s eligibility pool.

California is and has always been a diverse state and it is evident in all of our UC campuses. I hope the Board of Regents recognizes the effort that it took to get us to this point, and does not brush it away with new policies that will have uncertain results.

STREET TALK: Criminal justice, Philippine style

By Greg Macabenta

Depending on which newspaper you read, Ping Lacson is either guilty as sin as the alleged mastermind in the liquidation of PR man Buddy Dacer and his driver, or the predictable target of criminal justice, Philippine style because of his relentless campaign against corruption in the Arroyo administration.

Reynaldo Berroya is either a seeker of justice or a vengeful former jailbird-turned-public official who wants to get even with Lacson.

Raul Gonzales is either acting true to stereotype as Gloria Arroyo’s hatchet man, ready to swing the ax on Lacson’s neck, or a do-nothing justice secretary who can finally score on a high profile target.

Don’t bet on knowing the truth anytime soon. First of all, the above scenarios are not necessarily “either-or.” Despite the seeming contradictions, there could be some truth to all the premises.
Surely, Ping Lacson didn’t develop his Dirty Harry reputation by being the chairman of the church choir during his stint as a police officer. Too many anecdotes portrayed him as a berdugo, they couldn’t all have been based on the fertile imagination of Carlo Caparas or the cinematic exploits of FPJ.

But he has also been a real pain-in-the-behind for Arroyo, her husband and her cabinet. It should be no surprise to anyone that their avenging angels are going after Lacson with every piece of evidence they can muster, whether truthful, half-truthful or fabricated.

Berroya is a former jailbird, thanks to Lacson. It is believable that he is also a seeker of justic e, especially if it means dishing it out to a sworn enemy.

Raul Gonzales is, without doubt, Arroyo’s hatchet man, but if he truly can convict a high profile target like Lacson, that would be a feather in his oft-tarnished cap.

In other words, it really shouldn’t matter if Lacson is prosecuted for reasons of political vendetta. If he is proven guilty, that would still be an achievement for an administration that has allowed too many obvious thieves to get away.

Having said that, it should also be noted that the criminal justice system in our country operates at several levels.

There is the press release level, which comes in two versions. That of the accuser and that of the accused. In advertising, the number or frequency of commercials or ads released for a brand is referred to as its “share-of-voice.” In the battle of press releases between the accuser and the accused, the applicable reference point is called “share-of-pocket.” The more reportorial and editorial pockets lined, the greater the share-of-voice.

At this level, also, the parties involved all manage to sound convincing, sure of themselves, ready to submit to lie detector tests or face investiga tors, prepared to back up leaked information with incontrovertible proof and, naturally, all vowing to see that justice and the truth prevail.
To the uninitiated, this can all sound so confusing. They couldn’t all be telling the truth, but which side is lying? This is where share-of-pocket and share-of-voice count, with the second being a logical consequence of the first.

This is all based on the principle that “He who buys the most media support gets to be believed,” a variation on Joseph Goebbels’ theory that a lie repeated often enough will be taken for the truth.

Then there is the second level where the backroom negotiations occur. Oftentimes, it’s a game of blackmail and counter-blackmail.
I’ve got the goods on you.

Oh yeah? I’ve got the goods on you, too.
I’ll pin you down first.
Do that and I’ll expose all the skeletons in your closet.
Maybe we should talk this over.
Yeah, maybe we should.

The next day, both accuser and accused appear before the media to announce that “It was all a misunderstanding.”

Peace follows – until one of the parties decides to double-cross the other. Then the excrement once more hits the fan.

And then, there’s the third level, which is where the truth really is.
The trouble with the truth in our country is that it implicates too many people, not just one or a couple. Oftentimes, the accuser turns out to be as dirty as the accused, not to mention several others who would not have been drawn into the case if those involved had been more reasonable – that is, if they had agreed to just talk things over.

This is the reason why most celebrated cases involving high ranking officials and prominent personalities are never resolved, after reams of press coverage and pompous announcements by authorities. The collateral damage is considered unacceptable.

It is often at the second level where these cases end up. The quid pro quo is what results. The accusers and the accused who are also often the blackmailers and the blackmailed agree to back off and leave each other’s skeletons in their respective closets.

If this were not the case, why haven’t those who claim to have the evidence in hand made their findings public? If they have the goods on Lacson, what’s keeping them from ordering his arrest?
On the other hand, if Lacson is as blameless as he vigorously claims to be, why doesn’t he have affidavits from the very same persons who are said to be implicating him, clearing him of any involvement?

And why did these police officers go into hiding in the first place?

Frankly, I don’t think the protagonists in this shadow play really want the truth to come out. I think they would all rather agree on a détente. No more corruption exposes by Lacson and no more ambition to become president. No more anti-Lacson inquisitions by the Arroyo government and all the grisly cases simply left to gather dust.
Such is criminal justice, Philippine style.

(gregmacabenta@hotmail.com)

TELLTALE SIGNS: What goes around

By Rodel Rodis

When the news article about my Ninth Circuit case (“Cops can’t be sued in ‘counterfeit’ arrest”, San Francisco Chronicle, March 10, 2009) appeared in the paper's on-line edition (sfgate.com) more than 98 comments were published in the first 24 hours.

One of the first comments came from “Akit” who wrote: “Let me get this right... the Walgreens manager used the special marker to prove its authenticity, and it was authentic. But they still called the cops who arrested him for being a fake? If the cops were smart, they would have used the marker to test it themselves, and wham! Can I get my change for my purchase? Problem solved.”

A comment from “szander” echoed the same sentiment: “So the manager at Wallgreens used a special pen to determine that the bill was legitimate and called the police anyway? Why, then, was the guy arrested after it was proven that the bill was authentic? That sounds incompetent to me.”

Quite a number of comments asked why I did not sue Walgreens instead. Well I did. In fact, as a result of my lawsuit, Walgreens fired the manager (Dennis Snopikov) and hired a Filipino, the first to be promoted to store manager in San Francisco. Walgreens also issued a public apology and paid my fees.

The transcripts of the 911 taped call of the Walgreens manager revealed that Snopikov had merely expressed a suspicion that the bill may be counterfeit, he did not claim that it actually was a fake. It was the police officers who jumped to that conclusion without conducting any investigation and that is why I sued the two police officers who were responsible for my false arrest (Sgt. Jeff Barry and Officer Michelle Liddicoet).

In their depositions, two of the San Francisco police officers who arrested me (Liddicoet and James Nguyen) stated that they thought the bill looked genuine to them when they examined it. In fact, at the police station, after Nguyen removed my handcuffs and informed me that the Secret Service had verified that the bill was genuine, Nguyen even boasted to the other police officers that he knew all along that the bill was genuine.

Liddicoet and Nguyen also claimed in their depositions that my false arrest was the result of a mix-up. The first two SFPD police officers to arrive at the scene, Sgt. Barry and Officer Barbara Dullea, reported a Code 4 - “situation was under control” (SUC)- to Liddicoet and Nguyen who unfortunately, they said, understood Code 4 to mean “suspect in custody” (SIC) and expected to see the suspect already in handcuffs upon their arrival. However, when they entered the store and saw it wasn’t the case, they proceeded to place me in handcuffs.

That’s the Keystone Cops “plainly incompetent” version.

The real story is that Sgt. Barry, the first officer to arrive at the scene, had a personal beef against me dating back to 1998 when our sons were 3rd grade classmates in a parochial school. While we were discussing a school policy, Barry started complaining about a City College policy of not allowing campus police officers to carry firearms on campus. He believed that this policy placed his brother-in-law at risk for his personal safety. As I was a City College Board member then, he wanted me to change the policy but I disagreed with his view.

So when Sgt. Barry saw an opportunity for payback five years later, he just couldn't resist it. He told Liddicoet (who had just arrived at the scene and who had asked him for a status update) “Oh it’s that lawyer, he hates cops”. (Honestly, I don’t). Liddicoet replied, “Don’t worry, Sarge, I’ll take care of him”. And take care of me she did.

Although Barry was the first to arrive at the scene, I didn’t recognize him because I was speaking with the store manager at the time. After I was placed in handcuffs in the backseat of the police car, I overheard an officer come up to Liddicoet who was seated in front of me and whisper to her: “Make sure my name isn’t on the police report, ok?” LLiddicoet replied "Yes, Sarge". I couldn’t see the face of "Sarge" as it was dark but I kept asking myself throughout the ride to the Taraval police station “Who is Sarge and why doesn’t he want his name written on the police report?”

So when I saw the police report which included Sgt. Barry’s name (Nguyen wrote it), everything finally made sense. Wow, I thought, this officer can carry a grudge.

The Ninth Circuit’s March 9, 2009 decision means that police officers like Sgt. Barry now have the power to arrest anyone that they have a personal grudge with and people like me can’t sue officers like Barry. It’s no longer a qualified immunity, it’s now an absolute immunity.

My long-time critic, Roy Recio, cheered the Ninth Circuit decision in an email to me a few days ago because, he wrote, “This is what you deserve”. The question is not whether I deserve it but whether Recio deserves it. He may one day find himself falsely accused of a crime and arrested even without probable cause. To make sure that it doesn’t happen again to anyone else and to compensate him for the embarrassment the false arrest may have caused him, Recio may file suit against the police officer. Ironically, his suit would then be thrown out of court because of the decision he is now cheering. If that happens to Recio, I promise I won’t email him to gloat that what goes around, comes around.

(Send comments to Rodel50@aol.com or mail them to the Law Offices of Rodel Rodis at 2429 Ocean Avenue, San Francisco, CA 94127. For those wishing to read the two Ninth Circuit decisions in my case, just log on to Rodel50.blogspot.com and click the links.)

VIRTUAL REALITY: Battle of the Titans

By Tony Lopez

There seems to be an undeclared war of the corporate giants. It is the race to create the Philippines’ mega conglomerate—the largest company in terms of scale and diversity of operations, combined sales and profits of its operating units or divisions, geographic reach, locally and globally; employment of manpower, technology and resources, and visioning for its businesses during the balance of the 21st century.

At the starting gate are three major groups—San Miguel Corp. under Chairman and CEO Eduardo Cojuangco Jr. and President and Chief Operating Officer Ramon Ang, Ayala Corp. under the brothers, Chairman and CEO Jaime Augusto Zobel de Ayala and President and COO Fernando Zobel de Ayala, and Manuel Pangilinan of the First Pacific Group of Hong Kong of the Salim Group of Indonesia. First Pacific, in turn, has controlling interest in two large Philippine companies—the Philippine Long Distance Telephone Co. (PLDT) and Metro Pacific Investments Corp.

Not to be ignored are three other large conglomerates, Henry Sy Sr. of the giant retailing chain SM and banking’s No. 1 Banco de Oro, George SK Ty of the Metrobank Group and Toyota, and Lucio Tan of PNB and Allied Bank, Philippine Airlines, Fortune Tobacco and Foremost Farms.

Two major developments triggered the Battle of the Corporate Goliaths. One is the US financial meltdown, which has spiked recession in two-thirds of the world and at the same time, created vast opportunities for mergers and acquisitions following the sharp declines in asset values.

The other is the massive expansion, almost overnight, of the San Miguel Group which has spurred a reaction from its rivals and would-be rivals, notably the Ayala Group of the venerable Ayala family and the First Pacific Group of Pangilinan and Antoni Salim.

It is a game of dominance and the stakes are high. They include control of major businesses in the Philippines, such as manufacturing, telephony, energy (from production, distribution, and supply and marketing of allied services and products), real estate, banking, water resources and the employment of and future of technology in these fields.

The race winner will determine how products and services will be produced, packaged and marketed and define the market and needs of the future.

San Miguel acquired significant stakes in Meralco and Petron and immediately, Ayala Corp. headman Jaime Augusto Zobel de Ayala recalled his top generals CEOs from Ayala Land Inc. and Globe Telecoms to headquarters to think of strategies and major acquisitions. The Ayala Group has piled up $500 million in investible funds to deploy.

For his part, Manny V. Pangi-linan has bought 10 percent of Meralco to observe how the San Miguel group will operate in the electricity distribution monopoly. MVP can provide a second opinion to Ramon Ang’s innovative ideas.

San Miguel has been acquiring all kinds of telephone technology—landline, wireless and broadband.

Becoming integral to wireless technology is global positioning system technology, knowing the location of your subscribers and customers, where and when they go to which particular place—at home, in the office, at the shopping mall, parking lot or car repair shop, coffee shop or restaurant, or in the neighborhood.

Crunching such mobile data and sensing consumer patterns will give a distinct advantage to a consumer product company like San Miguel in deploying its products and services. Wireless technology is also giving rise to technology platforms that deliver vital services, like health care, a field in which telco taipan Manuel Pangilinan has been investing heavily. Pacemakers and vital health signs can now be monitored wirelessly, thanks to mobile phone technology.

This early, San Miguel Corp. is studying how to pipe broadband data to the electrical outlets fed with electricity by Meralco, a recent acquisition, using the technology of Qtel, a recent partner. Pangilinan already uses Meralco posts to string PLDT’s landlines into households.

San Miguel, Ayala and Pangi-linan will fight it out in the next battleground—water, for which a major shortage is emerging.

On still another front, the winner and the major players in the race for No. 1 will have a say in the selection of the country’s leaders and the future and direction of the economy which has become middle class with per capita GNP income of more than $2,000.

So far, San Miguel has gained the upperhand. San Miguel Corp. has acquired 27 percent direct equity in Meralco plus another 10-percent owned by groups friendly to San Miguel Corp. for a total of 37 percent. San Miguel Corp. also has an option to buy 50.1 percent of Petron Corp., the country’s largest oil refining and marketing company.

E-mail Tony Lopez at biznewsasia@gmail.com

STREET TALK: Accusers and accused in Santa Banana

By Greg Macabenta

In the Central American Republic of Santa Banana, the ends of justice are always met.

Yes, they are always met with raised eyebrows, a snicker and a chuckle, a smirk and a frown, a puke and a spit, or with gales of laughter.

Nobody takes Senate Blue Ribbon Co mmittee investigations, impeachment charges, warrants of arrest, accusations of graft and corruption, even buy-bust stings (a-la FBI in the US) seriously.

In fact, even when somebody gets caught red-handed – literally with his pants down – he manages to get away with it by vehemently and vigorously denying it.

Politicians have become particularly adept at this, having had a lot of practice by cheating on their wives, being caught red-handed, denying it and getting away with it.

“Aha! I’ve caught you with your pants down with this woman!”

“What woman???? What woman???” (Meanwhile, the woman dashes out of the room.)

“What woman???: Do you see a woman in this room???” (The wife sees no woman in the room and gives up in exasperation – she then cheats on the husband to get even).

And so, when a politician or the husband of President Gloria En Excesses Deo is accused by such venerable institutions as the Worldwide Bank of rigging the biddings on infrastructure projects funded by the international body and the bank shows documentary evidence to the authorities, all he has to do is vehemently and vigorously deny it. Then his allies in the Senate demand that the accuser provide proof.

“Here’s proof!” th e bank declares.

“What proof? What proof? Is this proof?” the allies of the accused ask with raised voices into the television cameras. “Thats only hearsay. You must produce solid proof!!!”

In Santa Banana, there is no such thing as the authorities following up a lead, investigating suspicious conduct and eventually coming up with airtight evidence. No sir. The accuser has to do all of that. So, if you’re not prepared to spend loads of money gathering evidence (and risking your life doing it), you better follow the advice of the Mafia dons, “Fuggedaboudit!”

In the end, nothing comes out of an accusation and the whole case is eventually forgotten. Of course, in the case of Worldwide Bank, it decides not to fund infrastructure projects in Santa Banana anymore, but then it is accused of discriminating against a poor, defenseless, T hird World country.

Then, there is the Santa Banana Senate which holds this regular showbiz extravaganza called the Blue Ribbon Committee hearing.

This is the favorite publicity platform of politicians intending to run for the presidency. It always gets a lot of media coverage and the members of the committee are able to wear their best looking suits (it’s sweltering hot in Santa Banana, but the politicians love to wear suits because they think they look good in them) and ask pointed questions like the DA’s in Hollywood films.

Of course, the responses are preditable. All the accused has to do is to either declare outright innocence, deny any involvement or invoke presidential executive privilege. Prying information from them becomes an impossibility.

E-mail Greg Macabenta at gmacabenta@hotmail.com

FROM THE CAPITOL: Language Access

By California State Senator Leland Yee

While speaking one’s native language is protected in cases of employment and housing under state law, such protections are not provided under the state’s civil rights act, which prohibits discrimination within business establishments.

As a result, I have introduced legislation, Senate Bill 242, to add the use of any language to the list of protections under the Unruh Civil Rights Act. Currently, the Act prohibits business establishments from discriminating on the basis of sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation.

The issue stems from a proposed policy announced last summer by the Ladies Professional Golf Association (LPGA) to suspend players who do not speak English. The LPGA later rescinded the proposal after I voiced my objections, together with over 50 civil rights organizations.

Unless English is justified by a business necessity, no one should be discriminated against simply for speaking their language. Senate Bill 242 will rightfully add language to the list of protected classes within California’s civil rights act.

In September of 2008, I led an effort to oppose a discriminatory policy by the LPGA which would have required players on Tour to be proficient in English starting this year. Despite there being no relevance to the sport, the LPGA claimed that it was important for players to be able to interact with American media and event sponsors. Ironically, many of the sponsors are international companies and a number of the tournaments are not held in the United States. No other professional sports league in the United States has such a mandate.

This year there are 122 international players representing 27 different countries, including Jennifer Rosales who plays under the Philippine flag. She became the first golfer from the Philippines to win on an LPGA tour in 2004.

It is quite disheartening that in the 21st century any organization would think such a policy is acceptable. Omitting qualified players from LPGA membership is inappropriate and unsuitable for the world we live in and poorly reflects on the increasingly diverse population of California and the United States. With the passage of Senate Bill 242 such discriminatory mandates will not only be unfair, but illegal.

Under Senate Bill 242, it would be a violation of state law for an entity to adopt or enforce a policy that limits or prohibits the use of any language in a business establishment, unless the language restriction is justified by a business necessity and notification has been provided of the circumstances and the time when the language restriction is required and of the consequences.

California is an increasingly diverse state and many businesses operate internationally. In order to protect our communities from discrimination and to ensure that international businesses want to operate in California it only makes sense that such discriminatory policies be prevented from undermining the progress we have made.