Thursday, August 04, 2005

Napocor's Boast

Napocor expects to break even this year


STATE-OWNED National Power Corp. (Napocor) said Wednesday it expected to finally break even this year, after losses going back to 1998, as it cuts costs and looks to higher revenue in the wake of tariff hikes.

The power producer registered a net loss of 29.9 billion pesos in 2004, a significant improvement from the previous year's 117.02 billion loss.

Napocor was earlier this year allowed to raise its electricity tariff by an average 0.0556 peso per kilowatt-hour.

That followed a rate hike of 0.98 peso per kWh approved by the Energy Regulatory Commission in September last year.

In a statement, Napocor said it expects its interest expenses to decline to 22.64 billion pesos this year from 30.25 billion pesos in 2004, after the national government early this year absorbed about 200 billion pesos out of Napocor's total debts of 500 billion pesos.

Napocor said it also expects to reduce its operating expenses due to stringent cost-cutting measures implemented this year.

"This includes the economic dispatch of its power plants as well as an improved generation mix that will see an increased utilization of the cheaper fuel types of hydro, geothermal and natural gas, and a reduced utilization of oil and coal, which are more expensive," it said.

The rate hikes and debt transfer were meant to attract bidders for the generation and transmission assets of Napocor.

Nieves Osorio, president of the Power Sector Assets and Liabilities Management Corp (PSALM), the state agency tasked to sell Napocor's assets, said Napocor planned to borrow 200-400 million dollars in the second half of the year, possibly through a bond issue in the international market.

She declined to give details. With


Breaktime: If it ain't broker
Conrado R. Banal III
Inquirer News Service

NOBODY could say if the officials of the central bank, the Bangko Sentral ng Pilipinas (BSP) one-day passes from basement ward attendants, but they actually tried their luck at … well, peace talks.

Heading the BSP peace panel was the new capo de tutti capi of the country's monetary and financial system, BSP Governor Armando Tetangco.

Apparently, Tetangco wanted to broker peace between the two warring groups of stockholders at Equitable PCI Bank, the country's third largest bank in assets.

Featured in the squabble were the Go family, who owned 25 percent, on the one hand, and on the other the state-run pension funds Government Service Insurance System (GSIS) and Social Security System (SSS) plus Trans Middle East of the Romualdez family and the group of mall mogul Henry Sy, which together owned about 47 percent.

In the BSP-brokered peace talks, Tetangco's panel spent roughly 30 minutes with the Go family, led by Equitable PCI chairman Antonio Go, before the Go family sued for snacks.

The GSIS-SSS-Trans Middle East-Sy group, also known as the government side, got a treat from the Tetangco panel when it faced them for hours.

Nobody could say if the ease by which the Go family hurdled the BSP brand of peace process was any indication of which side Tetangco was leaning on.

* * *

IT SEEMS the Tetangco panel needed to work more on the government side, because the Tetangco panel gave the government an offer it could just refuse.

In effect, to bring about peace in the bank, the Tetangco panel simply wanted the government side to give way to the Go family.

After all, the Go family wanted to control the bank, with their 25-percent ownership, at the expense of the GSIS and the SSS.

Sure, by suggesting that GSIS and SSS should give way to the Go family, Tetangco and company probably only wanted to protect public interest.

The GSIS and SSS, as you know, invested only P16 billion of our retirement, disability and death benefit funds in Equitable PCI Bank about six years ago.

Our pension funds also have nothing to show for their investments in the bank up to now. In fact, the market value has been cut by about half.

For our sake, the Tetangco panel proposed three innocent-sounding steps toward peace in the bank -- i.e., status quo in the stranglehold by Go family.

And they were that the two sides (1) keep the management, (2) stop the filing of court cases, and (3) split the board seats between them.

By the way, in another stroke of brilliance to protect public interest, the Tetangco panel also told the two sides to stop talking to the media. Hmmm.

There, it's the media menace all over again. At the first sign of trouble, we always get the blame. It's as if we are the ones fooling around.

* * *

AND so, since the Tetangco panel asked the two warring groups to stop filing cases, only two days after the peace talks, no wonder, the Go family filed three cases in succession.

Nobody could say if the Tetangco panel-brokered peace was part of the strategy, but the Go family filed a case before a Makati City court, another one before the Court of Appeals, and a third one before the Supreme Court.

All of the cases involved the 10 percent of Equitable PCI supposedly in "treasury shares," which the bank bought with its own money, not the Go family's money.

Six years ago, the Go family and the GSIS-SSS went into a joint venture to buy the former Philippine Commercial International Bank (PCI Bank).

The GSIS-SSS gave P16 billion in hard cash.

The Go family contributed fond wishes.

In other words, the Go family simply used the money of the bank in the joint-venture buyout. And all these years, the Go family has been using the "treasury shares" to help them keep control of the bank, even with only a 25-percent ownership.

In all those three cases, which the Tetangco panel supposedly did not want the warring groups to file, the Go family sought to keep their command over the "treasury shares."

* * *

EARLIER, a Makati City court issued an injunction involving those "treasury shares," in effecting negating a temporary restraining order issued by another Makati court on the same shares.

Down here in my barangay, where GSIS and SSS members struggle to make ends meet, that is also known as "forum shopping," meaning, it is bad.

Supposedly, a retired justice filed a case, asking the Makati court to force the corporate secretary of the bank, a young lawyer named Nilo Divina, to recognize those "treasury shares" at the last annual meeting of stockholders.

In other words, the Go family could use the "treasury shares" -- once again.

Another Makati court had issued a temporary restraining order on the same "treasury shares," saying that they could not be used at the annual meeting.

First of all, one court cannot issue an order against another court. That is the rule. Otherwise, the courts can do nothing but fight one another, much like our politicians.

Of course, there could always be millions of reasons a court would break the rule. In this case, unfortunately, the interests of SSS and GSIS members were not one of them.

* * *

IN effect, even if the case was supposedly filed against the bank, the restraining order actually favored the Go family at the stockholders' meeting.

And Divina, as corporate secretary, followed it willingly without much of a whimper.

At the stockholders' meeting, by the way, Divina took it upon himself to preside, taking the role of the chairman, who was none other than Antonio Go.

Divina, without much ado, threatened to throw out those who did not follow the script that the Go family had prepared for the meeting.

He just declared them out of order, including GSIS president and general manager Winston Garcia, who questioned the use of those "treasury shares" at the meeting.

In effect, the court injunction order told Divina to do something that was against the by-laws of the bank. Divina did not even protest against it.

Under the bank by-laws, you see, treasury shares cannot be used to determine the existence of quorum in the stockholders meeting.

The government side has been arguing, if that was the case, it followed that those shares could not be used to vote for board members.

For how can you use something that's not supposed to be there in the first place?

The government side complained that not only did the Go family, courtesy of the corporate secretary Divina, use the treasury shares to determine quorum, they also used the shares to vote for their nominees to the board of directors.

They of course voted for themselves. Oh, of course, and also their attack dogs!

* * *

SINCE the Go family disregarded the Tetangco panel no-court-case peace initiative, the government side thus also went straight to the Supreme Court.

Otherwise, the government side would have lost their battle for reforms in the bank by default. In college girl-speak, they were "making tulog in the pansitan."

And so it seems to me that the BSP-brokered peace served as a ruse. It could have stopped the government side from taking the initiative.

How else could you look at it? Look, one of the other proposals by the Tetangco panel was for the two warring groups to split the board between them.

That means, the Go side (with 25-percent ownership) would get seven seats, and the government side (with 47-percent ownership) would also get … well, seven.

Aside from its using bad mathematics, as in "25 equals 47," the proposal of the Tetangco peace panel reeked of a sellout -- with GSIS and SSS members as the merchandise.

Under the Tetangco panel's bright idea, the swing vote in the board, the one remaining seat, would go to management.

Thus, Equitable PCI president Rene Buenaventura, who would take the management seat, should become the most powerful man in the bank.

The Tetangco panel did not mind that Buenaventura was the same guy who, in past tussles between the two groups, forgot to stay neutral by siding with the Go family.

Which only makes you wonder where the Tetangco panel learned its math. No, don't tell me, not from the ward attendants! With


In fairness to Equitable PCI Bank directors, officers

Inquirer News Service

THIS is in reaction to Conrado Banal III's column, "If it ain't broker." (Inqurirer, 8/2/05) I have previously opted to remain silent despite the continuing tirades of Banal against the Equitable PCI Bank and some of its directors and officers, but I believe it is now incumbent upon me to react to his lies to do justice to the reputation of all the parties -- Antonio L. Go who represented the Go family, Social Security System president and CEO Corazon S. de la Paz, Government Service Insurance System president and general manager Winston F. Garcia, lawyer Ferdinand Martin G. Romualdez who represented Trans Middle East Corp., and lawyer Nilo T. Divina -- who attended the meetings called by Governor Amando M. Tetangco Jr. of the Bangko Sentral ng Pilipinas (BSP, the Philippine central bank) last July 20.

As president and CEO, I was requested to be present in two meetings. The meetings were called for the sole purpose of ensuring that the bank can continue to conduct normal operations and service the needs of its clients. It was clear to all the parties that any suggestions to be discussed during the meetings will all be pursuant to the said objective—the protection of the bank and its stakeholders.

Banal's statement that "the Tetangco panel simply wanted the government side to give way to the Go family" is a malicious lie which casts aspersions on all those who were in the meetings. Discussed in the meetings were three main topics:

1. To allow the Equitable PCI Bank's management to continue running the day-to-day affairs of the bank and to exercise its authority under the limits previously granted to it.

2. To minimize heated public discussions of the shareholder issues as these may cause undue concerns on the part of the bank's clients and depositors.

3. For the major shareholder groups, to continue discussions so that a final resolution of the various issues can be arrived at as soon as possible, including the final composition of the board, where all shareholder groups would have the proper representation by virtue of their proportionate shares in the bank.

I can attest that the discussions were very open and cordial. There was never any impression on the part of the shareholders' representatives that the BSP panel was taking sides.

It is very sad that Banal would make up a story portraying that the meetings, wherein he was not even present, had objectives other than ensuring the protection of the bank and its clients. I do not know what motivated him to insist on a particular column slant, which none of the parties in the meetings ever saw.

I also take this opportunity to comment on Banal's continuing lies against my person and his oft-repeated statements that I have been siding with the Go family. I believe that the best proof that this allegation is false and one that is not shared by any of the major shareholder groups is the fact that the existing management team under my leadership was elected by both boards of directors.

If it ain't broker – Breaktime, by Conrado Banal III (Aug. 2, 2005)

RENE J. BUENAVENTURA, president and chief executive officer, Equitable PCI Bank, Makati City

Digital Films

There's The Rub : Time out

Conrado de Quiros
Inquirer News Service

TIME out to talk about more serious things. There's a bit of good news amid the squalor of bad news in this country, and that is the lease on life digital and independent ("indie") films are giving the local movie industry.

In case you still haven't heard, the local movie industry is virtually dead. You can hear its dying gasps from here to Aparri. That industry, which used to produce close to 300 movies a year, is now producing only 70 or so. And the survivors aren't doing all that well. Reputable directors and actors have turned to TV instead, where work may not be vastly lucrative but it is at least steady. Their talents though are being frittered away in productions -- "fantaseryes" [TV fantasy series], "telenovelas" [TV soap], and so on -- that cater to the least common denominator. These are hard times.

The obvious way out seems to be for the industry to explore new avenues-new stories, new faces, new ways of filmmaking-to lure back audiences. But exploration or experimentation is the last thing producers want to do, given the high cost of making movies, particularly star fees, and given the not-so-sterling showing of movies that have done exactly that over the years. Their instinct has been to rely on formula, which demonstrably no longer works. It's been a chicken-and-egg situation for some time, one seemingly without resolution.

Digital and Indie films, which are often one and the same, may just have found the answer to it. They are relatively cheaper to make. And their makers can afford to experiment the way the producers of commercial movies cannot, or do not. They have lower costs-cheaper equipment, lower fees (the better-known faces are going to them for the psychic income more than the financial one)-and are in a better position to recover them even with smaller audiences.

Ellen Ongkeko-Marfil, the director of "Mga Pusang Gala" [Stray Cats], tells me she used digital cameras that cost P3,000 a day. Their analog counterparts range from P15,000 to P20,000 a day. Of course, the high-end digital cameras would have cost P40,000 a day, but only George Lucas' cousins in the Philippines would contemplate renting that.

Nap Jamir, the cinematographer of "Ang Pagdadalaga ni Maximo Oliveros," agrees and says the trick is using the P3,000-a-day digital cameras creatively to overcome their limitations. Lighting in particular can do wonders to hide the blemishes. Which he shows in "Pagdadalaga": the graininess shows only in the daytime street scenes, which look a bit overexposed.

If those two movies, "Mga Pusa" and "Pagdadalaga," are anything to go by, Filipino movies are more likely to recover faster than Filipino politics. Both represent the wave of the future in terms of infusing local filmmaking with new sensibilities. "Mga Pusa" makes the bigger gamble by aiming at a middle-class audience, with its middle-class themes, middle-class language (the dialogue is in English in many parts) and middle-class attitudes. It adopts a self-conscious or self-mocking stance toward this: One of its main characters is a romance novelist for a company whose editor cannot appreciate writing stories for the middle class because their audience is "masa" [masses]. In one scene, his editor tells him no masa woman lives alone, his premise for a story is implausible. His editor tries to corroborate this with his secretary who promptly answers, "I do."

I can only hope the movie itself meets with a long queue in movie houses defying "wise-money" expectations.

"Mga Pusa" tells of a gay man, Boyet (Ricky Davao), and his neighbor, a single woman, Marta (Irma Adlawan), who are at the mercy of their itinerant lovers. Its theme is (almost inevitably) that literal stray cats are more worth caring for than their human counterparts. It goes on to explore the relationships between Boyet and Irma and their lovers with impressive richness and complexity. One may quibble about the tone being a little uneven at times (it strives to maintain a tragicomic one throughout, though not always successfully) and with some parts being a little predictable, but those are nothing. They are more than offset by the movie's humongous virtues, not the least of them the acting and directing. Ellen essays one very mature and confident directorial job for a first outing, and the lead players are fantastic, Adlawan in particular.

The movie's many allures start off with its title, which of course is richly ironic, the coming-of-age, or into maidenhood, of a boy named Maximo. The curious title refers to a gay boy living in the slums with his family of petty crooks who falls in love with a cop, which divides his loyalties. That premise, while being dramatic, also risks being contrived, and the movie teeters on the edge of the latter in some parts. But it manages on the whole to walk the tightrope, and ferociously gracefully. The movie is at its best in exploring the relationships between the family members. It does a magnificent job not just giving a face to people who proverbially live on the knife's edge but in demolishing the stereotypes about them, which are really just two ways of saying the same thing. It gets a trifle shaky in the dynamics between (the quite literal) cops and robbers.

Michiko Yamamoto, the scriptwriter who also wrote "Magnifico," gets to be a better storyteller by the day. The performances are uniformly riveting, Ping Medina (Pen's son) is a revelation. But the plaudits easily go to Nathan Lopez (Maximo) who was given a special citation by the Cinemalaya Awards. It is totally deserved. That boy is going places, very far places.

What can I say? It's nice to know that art at least is flourishing in this country even if morals are not. Never mind the local movie industry. Do yourself a favor. Go watch these movies.