Click below for:
Position paper of CODE-NGO on Peace Bonds
Statement of the Freedom from Debt Coalition on PEACe Bonds
Ang CODE-NGO ay organisasyun ng grupo nina Social Services Secretary Dinky Soliman.
Ito ngayon ang interesante. Noong binabatikos ito noong 2001 sa Kongreso, ang nagdedepensa kina Soliman ay si Mikey Arroyo, anak ni Gloria Arroyo, na doon ay kongresista ng pangalawang distrito ng Pampanga (ang nanay niya ang may hawak ng puwesto nay an ngayon) na ngayon ay miyembro pa rin ng kongreso ngunit bilang kinatawan ng mga security guards at tricycle drivers.
Maala-ala nating DSWD secretary rin si Soliman nang panahon ni Arroyo dahil aktibo sila sa tinatawag na “civil society groups” na nagpatalsik kay dating Pangulong Estrada at naglagay sa Malacañang kay Arroyo noong Enero 2001.
Marami na ang nangyari sa loob ng sampung taon. Nagkasamaan na ng loob ang mga Arroyo at ang grupo nina Dinky. Nang lumabas ang eskandalo ng “Hello Garci” tapes, at nabuking ang pandaraya ni Arroyo sa 2004 eleksyun, nag-walkout sina Soliman kasama ang ibang miyembro ng gabinete (sila ang tinatawag na Hyatt 10).
Ngunit ang P35 bilyon na pabigat sa mamamayang Pilipino ay nandyan pa rin.
Gusto ko lang linawin dito na bilib ako sa kakayahan ni Soliman bilang DSWD secretary. Masipag siya at alam niya ang kanyang ginagawa.
Ngunit sa kaso ng Peace Bonds, naniwala ako na masyado nilang nabaluktot ang mga regulasyon para sa kanilang interes. Masasabi nga natin na nagsamantala sila sa kanilang pagka-close sa kapangyarihan na si Gloria Arroyo noon.
Hindi ako masyadong magaling sa usapang pera ngunit ito ang pagkapaliwanang ng Freedom from debt Coalition na noon pa ay bumabatikos sa Peace Bonds.
Noong 2001, naisip ng pamahalaang Arroyo na mangutang ng P10 bilyon sa pamamagitan ng treasury zero coupon notes (yun na nga ang Peace Bonds) at ito ay gagawin ng Rizal Commercial Banking Corporation ( RCBC ).
Nanalo daw ang CODE-NGO sa auction kung sino daw ang hahawak nito. Paano naman pala hindi mananalo ay wala namang nakaka-alam tungkol sa proyekto na ito dahil sila pala ang may pasimuno nito.
Ang in-charge ng proyekto ay si Marissa Camacho, kapatid ng Finance secretary noon na si Joselito Camacho.
Kumita ang CODE-NGO nina Dinky ng P1.8 bilyon sa pagbenta ng bonds na yun. Ano ang kanilang kapital? Koneksyun at laway.
Sa ganitong usapan, naala-ala ko ang bilyun-bilyun din na coco levy funds na kinasasangkutan ng negosyanteng si Eduardo “Danding” Cojuangco at ang kontrobersyal na loan ni Roberto Ongpin sa Development Bank of the Philippines na binili niya ng Philex shares at tumiba siya ng sangkatutuak na
pera.
Pareho rin ang kapital nila ng CODE-NGO: kuneksyun at laway.
———————————————————————–
Statement of the Freedom from Debt Coalition:
PEACe Bonds: Unresolved, Ten Years On
Two weeks from now, the Filipino people will be PhP35 billion poorer and deeper in debt from a multi-billion financial controversy brought forth by the equally controversial Arroyo government and which was deemed by its NGO beneficiary as an “innovative fund-raising mechanism” to fight poverty.
At a time when the public is reeling from the negative impact of the unmitigated increase in the prices of goods and services, and the Aquino government’s unwarranted under-spending combined with the catastrophes brought about by the recent super-typhoons, to carve out PhP35 billion from the people’s coffers—which is bigger than the 2012 budget for the government’s Conditional Cash Transfer (CCT) program—is unacceptable, especially if the public will be paying for something whose regularity comes under serious question.
We talk here of the PhP10 billion, 10-year treasury zero coupon notes also known as the Poverty Eradication and Alleviation Certificates or PEACe Bonds awarded by the Arroyo Government to the Rizal Commercial Banking Corporation ( RCBC ) in behalf of CODE-NGO whose leaders were then close to the Government, and re-sold by the organization to RCBC Capital.
Exactly ten years ago, CODE-NGO, an NGO consortium, which tacitly supported the rise to power of the Arroyo government after People Power II, participated in this auction and benefitted from the windfall of PhP1.8 billion in profits from the resale of these bonds in the secondary market. CODE-NGO said that the money was used as an endowment fund to finance anti-poverty projects. However, the transaction was besieged with criticisms, some of which came from the Philippine civil society itself, to which it is a part of. While many said that the intent behind the project was laudable, it was also argued that such a deal gave the impression that an NGO was entering into an irregular and unethical transaction with the government.
Despite attempts of CODE-NGO to defend the transaction, they were hounded by the perception coming from many in the civil society community that this was nothing more than a political transaction, a “rent-seeking activity” that granted special privileges and benefits.
We, from the Freedom from Debt Coalition feel that it is precisely because of this disturbing perception that the facts must be laid bare and the truth be revealed. Being a member of the broad civil society community devoted to the advocacy of exacting greater transparency and accountability on the government’s fiscal dealings, and which has worked closely with different NGOs and social movements, we believe our coalition has a responsibility to push fellow civil society advocates to ensure that transparency must also be present among those that seek to hold government accountable.
Reviewing the Review
For this reason, we embarked on a comprehensive review in 2002 to shed light on the Peace Bonds issue. Unfortunately, we realized that the lingering negative perception about the controversial bonds is not entirely unfounded. We found out that rules were relaxed and circumstances which tended towards rent-seeking took place which led to CODE-NGO getting the endowment of PhP1.8 billion and a commission of PhP140 million.
To refresh our memory, an FDC paper titled “On the Matter of the Peace Bonds” (2002) presented some of the alarming issues uncovered by our review.
• CODE-NGO lobbied hard with the Arroyo government to sweeten the bond with tax exemptions and eligibilities.
• It then tried to ensure its targeted PhP1 billion profit by keeping the deal all to itself in a negotiated sale.
• When that was not possible, the ensuing bidding revealed features that would favor the most prepared – CODE-NGO had worked on the deal longer than anyone else, was intimately familiar with the details, and whose bank was prepared way ahead of its rivals.
• CODE-NGO kept the sweetest eligibility to itself — the security/statutory deposit eligibility and asset admissibility for insurance companies and sought its approval only after it had won the auction in its entirety.
• It purchased the bonds with money it did not have and sold it to investors affiliated with the very bank that underwrote the deal, namely, the Rizal Commercial Banking Corporation (RCBC). For this, it earned a staggering amount of PhP1.8 billion in gross profits. CODE-NGO then distributed its windfall, paying its financial advisers and RCBC at least PhP400 million in fees.
• Finally, it kept 10% of the PhP1.4 billion, roughly PhP140 million, for itself, then set up the Peace, Equity, and Access for Community Empowerment Foundation (Peace and Equity Foundation) with a permanent endowment of roughly PhP1.3 billion.
Straightforward Conclusions
From the aforementioned facts, we could arrive at eight (8) straightforward and irrefutable conclusions:
1. An NGO, then close to the Arroyo government and which didn’t have PhP10 billion but enjoyed exclusive information on the transaction was able to buy 10-year treasury zero coupon notes worth PhP10B and re-sell it to RCBC for PhP11.8B.
2. Other civil society organizations and social movements who may want to participate in the process and work together with eligible government securities dealers (GSEDs) were deprived of the opportunity to engage. The Arroyo government failed to do a road show for the bonds similar to what the deposed Estrada government did when it offered small-denominated bonds.
3. Virtually and singularly, CODE-NGO, without sweat earned PhP1.8B for zero coupon bonds that it bought with “zero money.”
4. The auction was done manually using fax machines to submit bids instead of electronic auction. At best, the auction can be deemed irregular; at worst, it could have been rigged, as manual auctions are more open to manipulations and leakages.
5. The money earned by CODE-NGO could have been the earnings of the government if RCBC directly bought the bonds from the government for PhP11.8 B. Thus, the public was denied PhP 1.8 billion in additional earnings.
6.CODE NGO engaged in a “simulated transaction” as the real awardee of the bonds was RCBC. CODE-NGO merely acted as a conduit.
7. Being a conduit with the sole purpose of earning only windfall profits, the PEACE Bonds have no exact value for CODE-NGO. Therefore, when it lobbied for eligibilities and special features for the bonds, it acted on behalf of RCBC. CODE-NGO admitted this, saying, “it is the only way the deal with RCBC could take place.”
8. CODE-NGO head Marissa Camacho and then Finance Secretary Jose Isidro Camacho are sister and brother, which raises the question of possible conflict of interest especially because CODE-NGO could enjoy undue advantage in the said deal due to information asymmetry. This was supported by no less than ex-President Gloria Macapagal-Arroyo when she issued an order directing her cabinet secretaries to prevent their relatives up to the fourth degree from deriving benefits from the said bonds.
New Questions
However, these conclusions also raised new and interesting questions, which merits no less than a full-blown appraisal of the transaction as well as the conduct of the organization and personalities involved.
For example, if indeed funds were extended to CODE-NGO by a private institution to buy the bonds, did not that financial intermediary recklessly risked its financial integrity and violated Bangko Sentral ng Pilipinas (BSP) rules on the extension of credit despite the lack of securities and safeguards, as well as a borrowing history, that would have merited the extension of credit?
Second, what are the terms of the credit extension and where are the documentation of the facility and the acceptance of the adequate security, collaterals, undertakings and guarantees, all of which would have proven the creditworthiness of CODE-NGO?
Third, there is a legal question raised that needs to be resolved. It surrounds the legality of the bonds issued. The Department of Finance is supposed to be responsible for the review, approval and management of all public sector debt, domestic or foreign. However, then Secretary of Finance Jose Isidro Camacho, who inhibited himself from the transaction, failed to sign the approval of the bonds.
These are some of the questions. Truth is, there are more questions that need to be asked such as whether CODE-NGO paid taxes for its PhP1.8B earnings, or, at least, for the PhP140M it retained. However, this will require CODE-NGO to open all its financial statements, which we believe would be better answered by CODE-NGO on its own accord.
To give CODE-NGO its due, it did try to present its side about the transaction. It argued that the deal was “legal,” “transparent” and “pro-poor.” However, based on the facts mentioned, one cannot help but conclude that the transaction carries features of cronyism and influence-peddling in the name of the poor. Not even the argument of good intention is enough to wipe away the stain that was left by this transaction or recover the diminished public’s trust in civil society organizations.
Worse, the deal contributed to the indebtedness of the Filipino people. This 16th of October, the government is scheduled to pay PhP35 billion in interests for the matured PhP10 billion bonds. This will impact greatly on the country’s coffers especially as the government tries to fund important social services even as it is criticized for not spending enough.
This issue presents a setback in both the state’s and civil society’s efforts to establish transparency, accountability and honesty in our political culture and structures. Hence, in its campaign to make the previous administration accountable for its colossal crimes, the Aquino government must put just closure to this issue by seeking the truth and making accountable those who may have erred. This is especially important, as some of the personalities implicated in this transaction are now part of the Aquino government. If the broad civil society community is willing to open a sad chapter of its history and re-open old wounds to rectify wrongdoings, then all the more that the Aquino government should do its part to facilitate this process.
FDC believes the path towards meaningful change allows no sacred cows. It is not selective in its quest to seek the truth nor is it forgetful of past transgressions, especially those that have yet to see the light of day.
Two successive administrations have already paid the price for corruption and political patronage. One was swiftly toppled by a popular uprising, so swift that it did not have the opportunity to see its midterm life; the other, while it managed to finish its tumultuous nine-year reign, will forever be consigned by history, together with the Marcos dictatorship, as one of the darkest chapters of our political narrative.
Since the end of the previous administration, there have been widespread sentiments that the light of truth will be shed on the transgressions of the previous leaders. The pervasive and systematic corruption of the previous government, the previous president most especially, has tainted the very institutions of government that were tasked to ensure transparency and good government. The current administration was elected precisely because of its campaign against Arroyo’s legacy of corruption and its promise to be the exact opposite of the previous administration.
As such, the Aquino administration must be different. For a government that prides itself as being supported by different civil society organizations and sectors, it must heed the call of the broad civil society community and the public.
Necessary Steps that must be taken:
1. Suspension of payments pending the result of an impartial and independent investigation.
Issues bugging the PEACe bonds like those of irregularity and uncertainty about how its proceeds were spent should first be brought to closure before the Government pays the principal and interest on the bonds. Congressional inquiry into this is an imperative. But if the House Committee investigation which turned out to be partial and devoid of transparency could no longer be saved, redirected and expanded, the President can take the initiative of conducting the investigation. The investigation must also include an Audit of how the proceeds from the sale of the bonds was spent.
2. Review of Policies
We call for the thorough review of policies such as rulings of the BIR, BSP/ Monetary Board, SEC, Insurance Commission and other agencies with regulatory or quasi- regulatory powers to avoid irregular bond transactions and sweetheart deals.
3. Legislation to curb political patronage
We have seen the passage of important legislation to curb political patronage and rid government institutions of corruption. However, especially at this point in history when we are still reeling from the ill effects of corruption by the Arroyo administration, we cannot be remiss and must ensure that our laws cannot favor or benefit select groups or individuals based on their loyalty to the powers that be.
4. Civil Society and anti-corruption advocates must abide by the very principles it expects from government especially in its transaction with government.
NGOs and civil society groups’ transaction and engagement with government must be marked by the principles of transparency and accountability. Those who call for clean government must abide by the same standards especially in their transactions with government. Transparency must begin with those who call for it.
Finally, accountability must pervade the civil society community. We cannot claim the moral high ground if we do not stand by it. Those who have done wrong regardless of their politics or connections must be made accountable before our laws
kung sino ang malapit sa kusinero at palaging doon namumulupot sa kusina kasabay nang paghawak sa palayok ang siguradong mauulingan.
kasabihan na nga ng mga taong gobyerno (sa ngayon, ha?) nariyan na sila bakit hahayaang iba pa ang makinabang, di ba?
meron bang umangat ang buhay sa PEACE Bonds na ‘yan? sila lang sigurong mga nakapalibot sa bunton ng grasya.
meron bang umangat ang buhay sa PEACE Bonds na ‘yan? sila lang sigurong mga nakapalibot sa bunton ng grasya.- MPR
Yan ang maganda ang tanong, Magno.
I remember seeing the list of the of groups that CODE=NGO would channel the Peace Bonds. I saw foundations of the Lopezes and the Ayalas. They are supposed to have programs in depressed areas.
I thought that these foundations were the social services arm of these rich companies.
Ang nangyari pala, thse foundations will avail of the money from the PEACe bonds (which would be paid for by the Filipino people)for their projects in depressed areas.
Di, pera din natin yun.
Ang galing talaga nitong mga mayayaman manggulang sa mga mahihirap.
Ang daming balimbing sa gobyerno. Mga kapit tuko sa posisyon.
So, ang PEACE Bonds pala ay para dapat sa mga programa sa depressed areas na ang bahala ay mga foundations na pinalalakad ng mga milyunaryo/bilyunaryong negosyante. Tinamaan ng linta, lalong naging depressed ang mga dati ng depressed na lugar!
Ngayon, babayaran na nating mahihirap ang perang napunta kay Dinky Soliman at mga mayayamang Ayala, Zobel…etc, dapat ay ilista ni Dinky ang lahat ng mga depressed areas na kanila daw tinulungan via her CODE-NGO na nagkamal sa P35B Peace Bonds, makita natin kung kasinlaki syang sinungaling ng kanyang dating amo na Gloria Arroyo!
Nasaan ang accounting ng PEACE BONDS? Pasintabi Ellen, pero kahit na anong galing ni Dinky Soliman sa pamamalakad ng DSWD, wala syang kredibilidad kaya wala akong respeto sa kanya. In fact, kaya sya humiwalay kay Gloria ng tagilid ang bruha ay para isalba ang kanyang sarili, tulad rin ng iba na pabago-bago ang kulay, hunyango!
This column by Antonio J. Montalvan II is about a special treatment for Imelda Nicolas, head of the Commission for Overseas Filipinos.
I understand she is part of CODE NGO.
http://opinion.inquirer.net/14993/the-people-are-not-her-bosses
Let’s put down some basics. Treasury bills (maturing in one year or less) or Treasury bonds (maturing in more than a year) are bought at a discount. That means, if the face value (yung nakasulat sa harap ng bond) is $1,000, you buy it for less, say $980. In one year, you surrender the bill, and you get 1,000.
Treasury bills or bonds are promissory notes of the treasury department of the government. Bayarin yan ng gobyerno, so sigurado. In the financial field, there is a trade-off between security and yield. The more secure, the lower the yield. (The most secure gives zero interest – itago mo sa baul). The lowest, comes from the government and banks. For the security of a sure bet, you get a lower interest rate. The riskier it is, the higher the yield. For example, speculative stocks, etc. Dahil hindi kilala, hininikayat ka with more interest.
Now the story says that the bonds were sold for 10 billion, and will be redeemed for 35 billion? That is a whopping three hundered and fifty percent of the purchase price. Ang tumiba, yung bumili ng bonds.
The typical yield for US treasury bills is 6 percent.
useconomy.about.com/od/economicindicators/p/Treasuries.htm (ilagay ito sa una “http://”)
Sa atin, the Jobo bills (during the time of Macoy’s Central Bank governor Jobo Fernandez) had the highest rate, at about 24 percent.
And it looks like the auction was rigged. So somebody was favored to buy the bonds. Who?
siguro dapat isoli na lang ng mga peacebonders yung pera ng taong bayan.
ang nangyayari sa programang ‘yan na utak din mga mandurugas na mayayaman ay pagpapalubog sa kahirapan ng mga nagdarahop na mamamayan in the guise of social service and welfare.
paano nga tayong makakaahon niyan kung sa bawat pagpapalit ng administrasyon ay pawang sariling bulsa ang iniisip unahin ng mga nag-uunahang makakuha ng puwesto sa paligid ng bagong pangulo? mga mukha lamang ng mga nasa gobyerno ang napapalitan subalit ang sistemang bulok ay ganun pa rin sapagkat nangingibabaw ang intensiyong panlalamang sa mahihirap at itinatambak lamang sa isang sulok ang layuning pagkakawanggawa at tapat na paglilingkod.
ginagawa na nilang negosyo ang bawat poder na hawakan at kumikita sila ng walang puhunan.
Ang purpose talaga niyang Peace Bonds na yan e bigyan ng premyo pa-tenkyu sa mga NGO na sumipa kay Erap. Pondo sana ng mga NGO na may magandang hangarin para sa taumbayan KESA sa gobyerno ni ESTRADA.
Okey diba? Mangungutang ang gobyerno, ang tutubo, gagastusin yung pera sa mga mahihirap, idadaan sa koalisyon ng mga NGO. Walang daan para sa mga korap na tao gaya ng nasa gobyerno ni ERAP. Tutal maaasahan naman sila Dinky.
Sabi nila.
Ano ba ang zero coupon bonds? Long term na utang yan ng gobyerno (itong PEACe bonds ay 10 yrs ang maturity) noong 2001 kaya magdu-due nitong 2011. Ang halaga (face value) ng bonds ayon sa pagkakaintindi ko ay P10B kaya naman nung paspasang ipa-bidding ito ng gobyerno, nanalo nga ang CODE-NGO.
“Yaring-karera” ito, nakahanda ang mananalo, may pagdadalhan na rin ng benta. Yung diperensya (tubo) ay yun ang magiging “seed money” ng mga NGO na nagpatalsik kay Erap. Sa halagang P10B, ibebenta sa RCBC ng P11.8B! Pwede nang simulan ang PAGBABAGO ng buhay ng mga mahihirap! Meron nang P1.8B na simulang pondo sila Dinky.
Legal. Malinis. Mabilis. Walang inisyal na gastos ang BAGONG GOBYERNO ni Gloria dahil sagot ng bangko. Uusad agad ang programang pangmahirap. Magaling.
Siyempre namuhunan ang RCBC ng P11.8B, kailangan kumita ang investment nila. Ibebenta nila yan sa secondary market at sinumang may hawak o “bearer” ng bonds at nakahandang tumanggap ng redemption value nito sa taong ito, 2011.
Kaya ako naguguluhan ay dahil kung ang face value ay P10B lamang, paanong ire-redeem ito ng P35B? Baka naman P35B ang face value?
Kung ganoon, paanong lumusot yung bidding kung saan P10B lang ang puhunan e P35B ang halaga ng binili? Kahit siguro ako ay may-ari ng isang bangko ay makikipagpitpitan ako ng yagbols, makuha ko lang yang bonds na yan. Di ko ipauubaya lahat na makopo ni Yuchengco na hindi ako kasali aba, hindi lang siya ang nagpatalsik kay Erap! Marami sila.
Baka marami silang nakatago sa likod ni Yuchengco? Tahimik na lang para walang bulilyaso, di pa mababawasan ang tubo.
“Yaring-karera” (fixed race) nga!
Okay, so 12.75% compounded semi-annually DAW ang projected interest rate nitong PEACe Bond kaya tuwing kalahating taon, tumataas ang value nito ng 6.375% (kalahati ng 12.75%) yan ang magiging halaga ng PEACe Bonds after 10 years.
(Note: Ang Treasury Bonds ay kadalasang may interes o “coupon” tuwing kalahating taon, pero dahil zero-coupon nga ito, ang lahat ng interes ay babayaran matapos ang 10-year term)
P10B + 20 compounded interests of 6.375% ea. :
Sa calculator,
1. pindutin ang “1.06375 x”
2. tapos, pindutin equals sign (=) ng 19 na beses (sagot: = 3.4418462159)
3. tapos, i-multiply sa principal na amount na P10B
Ito ang halaga ng bond matapos ang sampung taon.
P34,418,462,159 May diperensya pang mahigit kalahating bilyon sa P35B redemption value.
Ito ay kung susundin natin yung position paper ng CODE-NGO ayon sa link ni Ellen sa itaas.
Pero iba naman ang sinasabi ni CODE-NGO Exec. Dir. Dodo Macasaet, na kaklase ko’t Salutatorian namin nung High School. Ayon sa kanya (http://www.philstar.com/Article.aspx?articleId=626643&publicationSubCategoryId=135) ang value ay kinuwenta ayon sa “compounded annual interest rate of 12.75%”
Ano ba talaga ang totoo?
Kung 6.375% compounded semi-annually = P34.41B ang halaga ng P10B investment matapos ang term;
Kung 12.75% compounded annually, P33.2B ang halaga nito after 10 yrs.
Aba e ayusin ninyo ang pagsagot. Bilyon ang diperensiya niyan.
Thanks, Tongue, for helping us understand the technical side of this issue.
Pwede nang simulan ang PAGBABAGO ng buhay ng mga mahihirap! Meron nang P1.8B na simulang pondo sila Dinky.-Tongue #12
Is my conclusion right that CODE-NGO got P1.8 B with nothing but saliva and connection?
Sent to me through Facebook. Sender asked that his name be withheld:
aba’y hilo na ako sa usapang ire, ah. bilyon na naman ang nasasangkot na perang kung ituring ng mga tinamaan ng magaling na Code Ngongo na ‘yan ay parang barya la’ang?
sa tema na la’ang ng kuwentahan ay talagang hindi agad masasakyang ng mga pobreng walang pinag-aralan dahil baga ang proyekto daw na ire ay hinugot mula sa utak ng mga suwitek na gustong kumita ng limpak mula sa inutang na sino nga ga ang magbabayad kundi ‘yung mga pobre ding akala nila ay para nga sa kanilang kapakanan ang layon kaya itinatag ang PEACE bond na ‘yan!
ay, ‘kagagaleng nga ga ng mga iyan. maige nga la’ang sana kung merong mula sa pagiging isang kaykay isang tuka ay ymaman, eh. kaso nga’y wala.
nangutang (o pinagplanuhan ng mga tuso) ang gobyerno ng P10b para sa mga proyekto upang maibsan ang kahirapan sapagkat doon nga nakatuon ang layunin ng programa. babayaran ito ngayong taon (ayon sa kasunduan) ng halagang P35b kasama ang tubong P25b (kumita s’yempre ang mga kinabubukulan) at saan galing ang salaping ibabayad? hindi ba’t mula sa buwis na ibinayad ng mga pobreng hindi naman nakinabang sa P10b na ‘yun?
kung ‘yang P10b na ‘yan ay inilagak ng gobyerno sa bangko (noong panahon ng kagalanggalang, pinagpipitagan at kanyang kamahalang pangulong reyna gloria macapagal-arroyo) at hinayaang “manganak” ng interes (compunded annually din) na P25b, hindi kaya mas kapanipaniwala kung ngayon gagamitin sa pagpapaangat ng kabuhayan ng mahihirap (kahit ‘yung tubo la’ang na P25b)?
huwag naman nilang palagi ng maliitin at pagsamantalahan ang aming kasalatan sa buhay at kakapusan ng pinag-aralan dahil hindi naman lulusot ‘yang ganyan kung ipinirisinta nila sa amin at hindi sa ginawa nilang usapan at planong sila sila la’ang.
An example are the US war bonds of the Second World War. It was sold at 75 percent of its face value. So a bond worth 25 dollars was sold at 18.75, and after ten years, when it was surrendered, one got the face value of 25 dollars.
So hindi pinapatungan ng interest ang bond. Ang interest ay nandoon na sa face value dahil binili mo at a discount.
Yung sinasabi ni Tongue na compounding ng treasrury bills, yan ay dahil every six months ang maturity ng T bills. So, kung bibili ka ng T bills, kikita ka ng por syento sa bawat anim na buwan, which you can roll over every six months.
But when you buy a Treasury bond for a ten year maturity, wala nang compounding, dahil ang kita mo lang ay yung surrender value (face value). You do not compound because you do not surrender every six months. One time ang interest rate.
Anyway, let us do the compounding every six months, for ten years, using the PMT formuala of Excel. PMT is what you pay now, at a certain interest rate (six percent in this case), so that you get the target value (face value of 35 Billion) after a certain period (ten years).
The figure that the program gives is 2.8 Billion. In other words, if you invest 2.8 Billion in a security with interest of six percent, and roll it over every six months for ten years, then you get 35 Billion after ten years. That is 1.6 Billion less than what the CODE-NGO paid.
If the compounding (roll over) is yearly, you pay 4.5 Billion to get 35 Billion after ten years.
If the compounding is every month, you pay 1.755 Billion.
In all cases, short-changed ang taumbayan.
Tongue, salamat! Hindi ko nabilang ang laki ng pera kaya ang natandaan ko lang ay ang kinita ni Dinky. 🙂
#20. atty sax, lugi nga kahit saang corner ayun sa sunod ko sa computation mo.
Sorry. Yung sa formula ko, napindot ko ang .6, which is sixty percent, not six percent.
Paki-delete mo muna, let me rehash the numbers para hindi gumulo ang usapan.
Thanks.
what’s a non-government org like CODE-NGO’s business brokering a government bond?
there are thousands other NGOs, could they avail of the same arrangement to finance their own pet projects?
kung merong delikadesa ang bumubuo nitong CODE-NGO na ito, magsipagbitiw na sila. mahiya naman sila sa taong bayang naghihikahos na sila din ang puno’t dulo.
makunsensiya naman kayo, kung meron!
Okay, I did the long hand way (on Excel), to get at the value of a 10 Billion investment at 6 percent per annum. The earlier figures I presented used the PMT formula. Mali. That is how much money you pay to retire a loan. My profuse apologies.
The figures say for 10 Billion compounded (rolled over or reinvested) annually, the end value is 17 Billion.
If compounded semi-annually, the figure is about 18 Billion.
Here is how I did it, para ma-check ng mga eksperto. Do not trust a lawyer’s figures, especially when he calculates the attorney’s fees.
On Excel, go to A8, and type in 10 Billion (or 10,000,000)
On A9, put .06 (six percent).
On A10, put “=A8*A9” to get how much interest will be paid
On A11, put “=A8 + A10” to get the total of the principal plus the interest.
On B8, type in “=A11” You are using the new principal ($10,600,000,000.00), which is the 10 Billion plus the interest.
On B9, type in “=A9”, because it is the same interest rate.
On B10, type in “B8*B9”.
On B11, type in “B8+B10” You are now using the new principal to be added to the interest rate based on the new principal.
Once the B column is done, Select B8 to B11, and copy that, and paste it to the columns on the right, until you get ten columns.
What you get at the tenth column is 17 Billion.
For the semi-annual, you can copy two columns, A8 to A11, including B8 to B11. Then you paste it down to say, A14. But change the figure in A15 to .03, because the interest of six percent per annum is three percent for six months. Logical di ba?
Now select B14 to B17, and paste it twenty columns to the right (twenty semi-annual periods for ten years). You get 18 Billion.
This seems to jive with the dictum found in the “Rule of 70”, which is a rule of thumb for estimation. To get at how long a figure will double, if it grows by a certain percentage, divide 70 by the percentage. So if China’s GDP grows at say 10 percent, divide 70 by ten and you get seven years. So in seven years, China’s GDP will double. The Philippines, at five percent, will need 14 years.
This rule is applicable also to investments. So if the interest rate is 6 percent, the 10 Billion will only double in 11 years. That is double, not 35 Billion, which is 3.5 times; almost fourple, in the lingo of Lito Lapid.
investopedia.com/terms/r/rule-of-70.asp#axzz1aNwlNohS
Lagyan ng tatlong w please.
Sorry. Yung ten billion, siyam na zero after ten.
If compounded at 12.725, tama ang figure ng kaklase ni Tongue, 33.2 Billion ang end value.
But this archived news article says that Treasury Bills in October 2001 were trading at 10.05 percent.
accessmylibrary.com/article-1G1-79914857/banks-seen-push-up.html (lagyan ng tatlong w).
Plugging in that interest rate to the Excel spreadsheet above, the end value of the bonds would be 28.2 Billion. That is a whopping 6 Billion difference.
And if you look at the chart here, pababa ang treasury Bill rate noon. In January 2002, T Bill rates were averaging 6 percent.
bsp.gov.ph/statistics/sdds/tbillsdds.htm (taltong w please)
Ang contentious part talaga dito ay yung interest rate. Medyo naguluhan yung abugado natin sa kwenta pero kung iwo-work back natin yung amount, madali lang pala siya kwentahin.
So sa P35B final amount, minus yung P1.8B na tinubo P33.2 nga ang puhunan, gaya ng sabi ni Dodo Macasaet.
Yung P33.2B na compounded annually for 10 years kung paatras ay may initial investment na P10B. Yun na yon!
Bakit sa dinami-dami ng bangkerong matitinik sa Pinas, hindi nila nakwenta noon ng ganito? Mga sikat na bangkero sina Peter Favila, Vince Perez, Joey Salceda, maging sila Manny Pangilinan at Mar Roxas. Si Yuchengco at Camacho lang marunong? Sa perang tutubuin na bilyon, file muna ako ng leave sa gobyerno at Fund Manager muna ako for 10 years.
Ang dali lang naman diba? Hindi.
Hindi nila alam kung anong porsiyento ang tatanggapin ng Treasury. Sa kasong ito, kaninong Diyos nanggaling ang magic number na 12.75%?
Madali lang yariin ang bidding, lalo nga’t tax-free ito zero-coupon pa kaya di ubra yung existing electronic system. By fax daw ito. Naletse na.
Sawa na akong natatalo sa bidding na may kutsabahan at ang presyo ng hindi kasali sa Mafia na katulad ko ay palilibutan lang ng kung sinu-sino ina-accredit nila. Garapalan yung milyunang proyekto e tatalunin ako sa bidding ng mas mura ng sampung piso lang halimbawa (totoong nangyari yan). Bubunutin lang yung fax machine at isasaksak sa ibang kwarto yung makina, patay ka na. Isipin mo na lang kung ganitong P35B ang ballpark.
Itong PEACe Bonds ay syndicated release na pinangunahan ng RCBC Capital.
Sa madaling-salita: NASINDIKATO!
I read somewhere (looking for the link) that the Treasury Bond rates in October 2001 actually were in the area of 12 percent.
But it is not denied that Treasury Bills were trading at 6 percent. They wanted to lock in daw, the low rates. But the rates were dropping, since 1998 to 2001. So they actually locked in the high rates. (The rates kept going down, and are at about 4 percent today.)
So instead of floating ten year bonds, the government could have floated 364 day Treasury Bills, and paid the maturing bills with new borrowing every year. That would be like compounding annually, the six percent. So at the end of ten years, you get my figure of 17 Billion above, not 35 Billion, if the cheaper T Bills were preferred over the T Bonds.
If they chose the 184 day bills, so that the figure is compounded semi-annually, then you pay 18 Billion in ten years, not 35 Billion. Clearly, short-term loans would have been a better choice. There was no problem with marketing, because the demand was there, as shown by the increase in bills sold over the years.
Why did they want long term loans then, if they are more expensive than short term loans? Well, they mature after the Administration leaves office, as it actually did.
So, sakit ng ulo ng bagong Pangulo.
Neat di ba? Ganyan din ang ginawa ni Bush kay Obama. Now they want to balance the budget, after the profligate spending for the war on a noun (terror). Ngayon, may batikos din about fiscal policy yung Congresswoman na siyang umutang.
Ang maganda pa sa long term loan, there is reduced debt service (bayad ng utang) during your term; it is the next guy who pays for it. So you look good on paper, as being fiscally prudent.
From Aloysius Diaz:
I am glad that your brought the issue of this CODE NGO back into the limelight.
My question is where did all the money go? What sort of projects did CODE NGO undertake to alleviate poverty?
Can they be required to disclose how the money were spent and how much went as allowances, salaries and other perks extended to the officers? In short can they submit an audited report for public scrutiny?
Dinky Soliman and her cohorts must show transparency as they demand this from others.
pupusta ako, mababaon din lamang sa limot ang usaping ito katulad din ng pagkakasangkot ni de cashtro sa pangungutang ng globe aswitik sa pondo ng Pag-IBIG at iba pang anomalyang BILYONG piso ang pinag-uusapan.
sino kakasa?
people in the government always ask citizens to obey all laws but they themselves cannot adhere to any rule they want to follow. if we are in this state now it is mainly because we are not led by competent models.
atty sax, tongue… got the right amount na, tenkyu! Susmaryosep, e dapat ikwentas klaras ang peace bonds na yan, interes lang hindi maarok ng ordinaryong kaisipan ni Mang Juan!
Wala anamang kaso sa choice of instrument, mapa-TBills o TBonds, sa whatever term – long or short. Bidding naman yan e. So yung pagkapanalo ng CODE-NGO sa bidding, being a non-trader, Yun ang nagbigay-kulay sa transaksyon.
Obvious naman na gusto lang nilang paikutan yung batas na bawal magpondo ang gobyerno sa isang pribadong organisasyon. Pinabayaan na lang silang mag-bid sa primary market at tumubo sa secondary na “walang kokontra”. Malalim na imbestigasyon ang kailangan diyan, sa bidding pa lang ang tinatalakay ko.
Ibang usapan pa yung kung saan dinala yung pera ng CODE-NGO. Labas na tayo doon. Perang pribado na yon. Pero kung may nakinabang na taga-gobyerno o asawang mataba ng taga-gobyerno, e may kaso yan.
So hindi ko pa nasasagot yung tanong mo, Ellen, sa #17:
Korek ka dyan! Spin the wheel!
Napaka-imaginative talaga ng mga bata ni Putot. Biruin mo, di sila lulusot sa electronic auction na pinatupad ni Leonor Briones na Treasurer ng BTr ni Erap. Ginawang zero-coupon para mano-mano ang pagdesisyon.
Sa electronic auction kasi, within fifteen (15) minutes alam na kung tatanggapin o ire-reject ang bids. Maiiwasan na yung mga kutsabahang bidders ay makapag-compare ng notes na dati ay inaabot ng dalawang araw. Dalawang araw din hinihimas ang mga numero para lumusot yung gustong pananaluhin.
Nung araw kasi, mga dalawang dosenang “scorers” ang nagsusulat ng mga bids sa isang malaking blackboard at manu-manong kinukwenta ng mga accounting calculators saka magdedesisyon ang Btr kung aling bid ang pasok. Inaabot ng dalawa o tatlong araw bago i-announce.
Nung nagkaroon na ng ADAPS – automated debt auction processing system – na pinaka-advanced daw sa Asia, kasama yung ROSS (Registry of Scripless Securities) naging napakabilis at transparent ng auction gamit ang computers.
Sa palagay mo, Ellen, mananalo pa ang CODE-NGO kung electronic auction ang ginamit?
Ibang usapan pa yung kung saan dinala yung pera ng CODE-NGO. Labas na tayo doon. Perang pribado na yon. Pero kung may nakinabang na taga-gobyerno o asawang mataba ng taga-gobyerno, e may kaso yan. -tongue
Iyan kaya ang hawak ni Dinky sa matabang ungas at sa putot na walangya?!
Kaya hindi gagamit ng electronic auction ang gobyerno, mawawalan ng hanapbuhay ang mga koneks at dummies!
Mismo!
Si Ongpin naman ngayon ang babalatan ng SEC. Insider trading na malinaw yan kasi director at Vice chairman siya ng Philex nung bumili siya ng Philex shares gamit ang iba niyang kumpanya tapos ibebenta niya pala ng premium price kay Manny Pangilinan. Si Martha Stewart nakulong sa Tate dahil sa insider trading, sa Pinas kaya?
Umamin na kasi na dummy lang siya ng matabang tao e.
Baka mag-bangbang din yan like his brother kesa umamin na dummy sya ni taba!
Kaya hindi gagamit ng electronic auction ang gobyerno, mawawalan ng hanapbuhay ang mga koneks at dummies! – chi.
bah! bakit kami papayag, ano bale?
bilyon ang kinikita naming walang puhunan kundi laway at kapal ng mukha, tatanggapin namin ‘yang ekek na ‘yan?
what are we in power for? di ba, _______?
psssst! kaparte mo, nakadeposito na!
The peace bond scam is a classic case ng kasabihang ang Pilipino ay iginisa sa kanilang sariling mantika.
Think CODE-NGO made gross profits of PHP 1.827 billion pesos on the PEACE Bonds deal while RCBC Capital made only a PHP 240 million underwriting commission? Think again! RCBC made double what CODE-NGO made (PHP 3.749 billion) by reselling the bonds to institutional investors.
For a more detailed analysis, visit my blog at:
http://systemisbroken.blogspot.com/2011/10/revisiting-peace-bonds.html
Thanks, Mr. David Carl Grimes. Those with financial savvy can refer to Mr. Grimes’ blog for the complete lowdown.
Those who don’t have the time (or the patience) can just review my posts above. I believe I have made a correct and accurate assessment of the deal, except for the P10B amount (which is what is commonly carried in media).
Mr. Grimes accurately calculates this at P10.169B.
I don’t have financial savvy but I found David Grimes Peace Bonds article very informative. Awesome.
I agree, Ellen. Di lang dapat i-bookmark yan, baka mawala online later on. I suggest kopyahin yung buong article ni Grimes into some other website/s for safekeeping.