Category: money

those dollar accounts #cj trial

MANILA, Philippines – Day 37 of the impeachment trial of Chief Justice Renato Corona began with a bold assertion by defense lawyers he will face squarely charges he kept $10 million in secret accounts. By day’s end, however, the defense team appeared shell-shocked, after its hostile witness, Ombudsman Conchita Carpio-Morales, shared with the court highlights of the chief magistrate’s dollar stash. Her source: a report by the Anti-Money Laundering Council (AMLC).

Corona has $12 million in “fresh deposits” in various banks, Carpio-Morales said Monday. This is aside from the $10 million Carpio-Morales said Corona had maintained in 82 accounts in five banks and where he had made deposits and withdrawals “on very significant dates,” including the 2004 and 2010 elections, and on December 11, 2011, the day he was impeached by the House of Representatives.

i was fascinated by the huge amounts, and puzzled by the movement of funds, in and out, in and out, and i wondered “aloud” via facebook and twitter what that was all about, why move money around in different accounts that are all under his name anyway.  obviously it wasn’t to hide the money, because then he would have put it in the names of other people or aliases ala jose velarde.

no one had an answer on twitter, though one said it was indeed “very weird.”  but on facebook a friend seems to have figured it out:

he was trading his US dollars in the dollar trading market. Interest in FCDU deposits are extremely low. I wonder who was busy trading his accounts, or was he doing it himself on his spare time? … on just the transaction flows I estimate he lost about $2M over the years — which should reflect the general FC market trend of the same period. I hope some traders will be available to confirm these speculations.

now i want to know where those dollar deposits that coincided with “signfiicant events” came from.  unless the ombudsman’s testimony was indeed all a ‘lantern of lies,’ as the chief justice insists.

Morales noted that there were significant transactions made during significant dates, particularly in 2004 and 2007, which were election years, and during the week Corona was impeached. She said $418,193.32 in time deposit was withdrawn when Corona was impeached, and $417,978.80 was transferred to a regular trust fund.

“We will debunk all her bloated numbers. And once she is proven wrong, I urge her to immediately resign from her post for allowing herself to be used by this Administration and making a laughingstock of government auditing,” Corona said.

“bloated,” hmm.  so, less than bloated would be acceptable?  the lantern metaphor, though, is intriguing.  around here, lanterns are usually more decorative than illuminating.

media & the moneyed

The Luisita issue aside, the real problem these days is that PR men have so much clout in media that they can always get their lies told in the guise of news. That, I think, is, in large measure, a function of a generally uncritical attitude among media practitioners toward the rich, famous, and powerful. In interviews, whether for print or broadcast media, such rich, famous, and powerful personalities are lobbed powder-puff questions by reporters or talk show hosts, and their answers, however self-serving, inane, or mind-boggling, are accepted without question or critical rejoinder.

This reflects either media’s inferiority complex when in the presence of the rich, famous, and powerful or the simple recognition (and acceptance) of who actually butters media’s bread. In either case, the country and the people are worse off for this.

that’s from rene azurin‘s “News, lies, and videotape” on media’s spin re luisita distribution.  glowing legacy, my foot!

PEACe bond-holders on warpath

when i first heard that the interest earned by Peace bond-holders’ would be taxed 20% by the BIR, contrary to the tax-exempt promise 10 years ago, my reaction was, ha?  why the bondholders?  why not CODE-NGO whose scheme / scam it was and who made Php 1.8 billion in the process for its povertyalleviationefforts kuno?

the latest from the BIR is that CODE-NGO is liable, too, but surely only for 20% also of the 1.8B it raked in as rent, uh, commission, which is about 360M, which is peanuts compared to taxing the almost 25B earned in total by bondholders, 20% of which is a whopping 5B that the aquino administration could use (or hoard for the 2013 elections?).

on this i sympathize with the business community, the bondholders, who must be mad as hell.  as mad as TonGuE-tWisTeD (of the long-dormant blog Tongue In, Anew), whose unexpurgated rants in comments to ellen tordesillas‘s updates re the PEACe bonds i reproduce here:

TonGuE-tWisTeD – October 18, 2011 10:31 am
Sino’ng gago pa ang aasahan nilang mag-iinvest sa financial instruments na ini-isyu ng gobyerno kung bebentahan ka na wala raw tax, tapos kung kelan mo kokolektahin sa maturity date e meron ka nang tax?

TonGuE-tWisTeD – October 18, 2011 10:43 am
Nararamdaman ba nila pulso ng namumuhunan?

Puta, magnenegosyo ka, pag sinuwerte ka, tutubo ka ng 4-7% NIBT para lang wag mawalan ng trabaho yung mga empleyado mo, pagkakataon mo’ng kumita ng konting dagdag sa pondo’ng inilalako ng bangko, tapos ita-tax ka ng 20% na malinaw na sila mismo nagsabing walang tax.

Tangina, ipon ng ipon ng pondo, buwis ng buwis, hindi naman ginagastos. Ayan, walang trabaho, walang negosyo, walang pag-unlad (growth). Tapos parurusahan yung mga nag-iinvest? Pinagtatawanan na lang sila ng mga bangkero.

Handa ba silang makipag-head on collision sa mga bangko?

Bakit di pa pagsisipain yang mga nakaupo diyan sa Finance? Alam ba nilang magpatakbo ng kumpanya? Lalo na ng isang gobyerno?

TonGuE-tWisTeD – October 18, 2011 10:57 am
Pasensya na medyo bastos tubo ng dila ko. Sa kaswapangan nila, ang nagdudusa yung biktima, yung mga salarin nakangiti pa.

Hindi biro ang kinita nila Red Mayo at Bobby Guevarra na P400M yata para sa pagporma at pagluto nitong letseng PEACe Bonds na ito. Isama na sila Yuchengco at Camacho/Songco pati sila Dinky at Deles sa bilyun-bilyong naraket nila.

Tapos ang kakarga ng kagaguhan ng BIR yung mga inosenteng bangko at mga namili ng Bonds?

Ang tingin dito ng mga negosyante, isang malaking con-job perpetrated by government itself against the country’s banking system and the investing public.

Stupid, stupid, stupid.

TonGuE-tWisTeD – October 18, 2011 11:34 am
Ang pinanghahawakan dito ni Kim Henares e yung desisyon ng BIR Commissioner nung 2004 na subject daw ito sa final tax.

Kaya ang kanyang bagong ruling, kung bumili ka matapos ang 2004, sabit ka na sa tax.

Ha? At yung bumili at nagbenta nung 2001 ay libre? Yung original na kriminal libre, yung biktima, may parusa. Nasaan ang katarungan diyan?

TonGuE-tWisTeD – October 18, 2011 11:42 am
Ano’ng ginagawa ni Tetangco para proteksyunan ang mga bangko at mga kliyente nila? BSP Governor na siya panahon pa ni Putot, ngayon ilalaglag pa niya ang mga bangko?

Bakit natulog siya sa pansitan habang ang mga pobreng gustong kumita ng konti diyan, di niya ipinagtanggol noon pa palang 2004 merong desisyon ang BIR?

Dalawang bangko ang nakinabang diyan sa PEACe Bonds, BPI at RCBC. Walo naman ang umaangal ngayon sa Supreme Court na highway robbery ito. Ilan naman kayang mga ginago ang napagbentahan ng mga bangkong ito?

Letseng bansa talaga ito, sino pa kaya gustong magnegosyo dito?

and when the supreme court ordered a TRO on the 20% peace bond tax:

TonGuE-tWisTeD – October 18, 2011 11:45 pm
I knew it would come to this. The complaining banks and their clients would definitely fight this to its bitter end. How long it will take? No one knows, but the 20% tax will still not be paid until this is resolved by (oh, well) THIS Supreme Court! The 20% meanwhile is held in escrow.

The irreparable damage this will cause the country’s image and reputation as a stable and predictable business destination further erodes the much-needed investor confidence, to say the least, and these bunglings will not help alleviate the sad state of the slow trickle of new foreign investments.

We have been overtaken by Vietnam, but hey, Cambodia’s latest numbers suggest they are out to threaten us soon. For all we care, and at the rate we’re going, we’re probably headed towards the tail end of ASEAN in a decade. I won’t be surprised the military junta-led Myanmar/Burma will clobber us, too and we’ll be sending our women as DHs to Rangoon!

Dammit, jail Arroyo, Yuchengco, CODE-NGO we don’t care who else. But puh-leeze, fuckin leave us businessmen alone!

and in response to another commenter saying the BIR should indeed tax everyone who made money out of the peace bonds:

TonGuE-tWisTeD – October 20, 2011 10:45 am
But that is not the case, CODE-NGO/RCBC will go scot-free (refer to the origin of “scot-free” and you find the pun there) because BIR will still honor the tax-free promise it made thru Comm. Bañez in 2001 BUT will not apply to buyers of the Bond after 2004 – when a new BIR directive said the Bonds are NOT tax free. If you bought the “sweetened” Bonds after 2004, sorry na lang daw.

Wow, meron nang fraudulent flavor – tapos sorry lang? The BIR afterwards kept its silence, so did BTr, Bangko Sentral, the traders. All these times, innocent final bondholders were made to believe the bonds were still tax-free up to maturity. Until Henares announced it on Oct. 17.

This is how you run a mafia syndicate. Not a country’s financial institutions.

TonGuE-tWisTeD – October 20, 2011 11:20 am
… Bañez issued 3 BIR directives authorizing the tax-free feature of the PEACe Bonds.

Relaxing taxes as a come-on is practiced in all countries that wish to bring in fresh money from investors, especially when competing for big-ticket projects. That is why we have Export Processing Zones, tax holidays and tax perks are major considerations for new enterprises willing to locate in EPZAs, at least make them survive in the initial stages of production in exchange for future government revenues and much-needed local employment.

TonGuE-tWisTeD – October 20, 2011 12:40 pm
…the 20% that will be held in escrow is just the “witholding tax” portion.

What does that mean? The money will be paid to the banks in full (P35B) by the government. But what is unique in this SC order is that the Bond-trading banks themselves, not a third-party escrow company, will handle the trust accounts amounting to about P4.9B. If the case takes ten years, the banks will have made the same money they were supposed to have “lost”. “Quits” na lang sila. They get the chance to break-even even if the SC decides, after TEN YEARS, that the deal is subject to tax.

The tax is therefore borne fully by the final buyers of the zeroes.

What are the other implications?

It is not only a 20% final tax that will be charged the buyers/holders. 20% is witheld as a PORTION ONLY of the full final tax that will have to be paid. In amounts larger than P1M, the tax due is about one-third or about 33%. Assuming that government collects the full tax, it is therefore not only P4.9B but a whopping P8.1B (one-third of the P24.3B PEACe Bond earnings) that will be a windfall to the BIR coffers.

People will think they do not have anything to lose because the money that was supposed to go to the “greedy” banks and businessmen is back to government. It looks like it but not so.

I agree with the analysts that this deal weighed down on the macro-economic scale as it affects revenues, debts, and investor confidence. Anything that impacts these would eventually be felt down the economic food chain in terms of social services, jobs, prices, among others.

Still fresh from losing billions in the educational plans that insurers blame on Cory’s changing the rules on tuition control, the pre-need industry now faces a similar situation under Cory’s son, those who invested on the zeroes to recoup some of the loses in the 80s are up for more surprises.

Those still hoping to send their children through college via educational plans are praying their fund managers be one of those who avoided buying the zeroes.

To shake off any perceived bias, I will not repeat here how it will impact on the predictability and stability of government rules as it affects foreign investments which small businessmen like me have been trumpeting since time immemorial. Ramos was the only president who heeded that call and unless future leaders are willing to make the same paradigm shift in exchange for a few billions today, forget long-lasting prosperity for the country. I am sad that I may not see that in my lifetime.

We will always be exporters of warm bodies to countries where business rules are stable, where government stimulates job generation, where laws are investment-friendly, and financial markets are more predictable and less prone to manipulations of the powerful few.

Forget the smallness of stability defined only by minimum wage; thinking beyond the next payroll and focusing on what’s in for the long haul is what will save this country that flaunts its college-educated English-speaking nannies, its gene pool of creative artisans and pound-for-pound champs, its savvy techies, accountants and engineers who are nothing but.

and here’s another question from an anonymous fb friend of ellen:

October 10, 2011 5:11 pm
One way of looking at the matter is to ask whether the 12.75% interest rate that government paid to CODE-NGO was “fair”? CODE-NGO claims the 10-yr (usual) Treasury note at the time was yielding 13.64%, so it seems that the government didn’t pay too high an interest rate. But if RCBC or some other entity was willing to buy the zero-coupon PEACe bonds for P1.448B more than CODE-NGO paid, then that lender was willing to lend to government at an interest rate BELOW 12.75%. Why was the government not able to borrow at that lower interest rate?

not surprisingly, the latest retail treasury bond offering of the aquino admin that had hoped to raise at least Php 250B raised only 110B “amid the confusion sowed by the government’s turnabout on the tax treatment of the controversial PEACe bonds.” maybe also because the interest rates are only half that of the peace bonds?

today the prez is reported to have met with finance sec cesar purisima and bir commissioner kim henares, as well as representatives of ngos that benefitted from the sale of the peace bonds.

“Yung P5-billion na tax na dapat makuha ng gobyerno, wala akong karapatan para i-waive. ‘Yung taxes imposed by Congress, ‘pag magbibigay ka ng exemptions o ia-amend, babawasan, dadagdagan – puro Kongreso po ‘yan. Kami taga-implement ng batas,” Aquino told reporters during the celebration of the 67th anniversary of the Leyte Gulf landing.

…“I think it is safer for us to implement the law the way we understand it rather than to ignore implementing the law and be guilty of not fulfilling our obligations and duties,” Aquino added.

safer daw, hello.  it may be safer, but is it right?  and safer for whom?  read the Freedom from Debt Coalition‘s paper PEACe Bonds: Unresolved, Ten Years On.

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.

the prez should stop salivating over the Php 5B and settle for taxing only CODE-NGO and whoever else were complicit in that devious pro-poor kuno scheme.  and really, someone should be brought to court for violating laws against rigged biddings and influence peddling.

 

Occupy Wall Street, shades of the sixties

Occupy Wall Street reminds me of the youth unrest in America in the mid 1960s through the ’70s.  except that then (like it was here), the youth were not as focused, i guess because of the drugs, the sex, and the rock’n’roll alongside the make-love-not-(vietnam)war and the civil rights movements.

this time, 40-something years later, the crowds on wall street and elsewhere in america and the world, may not be clear exactly how to achieve the change they want, but they sure are clear what they have had enough of, and the awesome meeting of minds and bodies is simply unprecedented and proving quite contagious.

check out these links i’ve posted on my facebook wall, tracking the movement, and the thinking that’s transpiring, evolving…  i hope the prez and his peeps are paying attention too.

All power to occupy Wall Street
Occupy Wall Street Rages On Around The World
This Time, It Really Is Different
Zizek at Wall Street: “don’t fall in love with yourself”
There’s something happening here
My Advice to the Occupy Wall Street Protesters
What Will Become of Occupy Wall Street: A Protest Historian’s Guide