Roxas urges caution in purchase of new pre-need plans

Liberal President Senator Mar Roxas today advised the public to be very careful when buying new pre-need policy plans in the midst of the continuing financial dilemma gripping the industry spawned by the closure of various companies due to effects of the global financial meltdown
"Mahirap ang buhay ngayon, mahalaga ang bawat sentimo na ating kikitain. Kailangang mag-ingat tayo sa mga investments na ating gagawin," said the chairman of the Senate trade and commerce committee, which is looking into the financial plight of the industry and the circumstances that led to the collapse of the Legacy pre-need group of companies.

"Hindi tayo maaaring maging kampante na okay ang mga kumpanyang pinayagang magbenta ng mga policy plans ng SEC (Securities and Exchange Commission)," he added, noting acknowledgements made during Wednesday's hearing that permits to sell issued to 22 pre-need companies are not guarantees of their financial stabilities.
Non-Traditional Securities and Instruments Department Assistant Director Merle Joy Pascual told senators permits to sell pre-need policy plans this year were issued to 22 firms in December last year. Three of these have admitted deficiencies in their trust funds, of which two have submitted build-up plans to correct the deficiencies. The last has yet to present its proposed financial plan.

Roxas grilled Pascual and other SEC officials on whether the issued permits to sell could be taken by the public as a warranty that the 22 companies would not go the way of the Legacy pre-need group of companies owned by businessman Celso de los Angeles.

The Legacy companies were authorized to sell premiums until December 7, 2008 but they stopped selling plans as early as November last year. It then applied for dissolution of the firms on December 8, causing panic among its pre-need planholders.

It was a similar situation for Permanent Plans Inc., whose 2009 license to sell premiums was suspended by the SEC last month after planholders complained about a questionable return-of-payment scheme offered by the management to its clients. A review by the Commission has shown deficiencies in Permanent Plans' trust fund.

SEC chairperson Fe Barin and Commissioner Juanita Cueto claimed it would be difficult to determine what would happen to the industry at any given time and, therefore, would be harder for the Commission to warn the public about the financial standings of the companies.

But Pascual, contrary to her superiors, confessed: "Personally, Mr. Chairman, sasabihin ko sa kapatid ko kung may plano siyang bumili ng pension o educational plan mula sa isang kumpanya na may problema sa trust fund, sasabihin ko huwag muna kasi may deficiency. Pero kung wala naming problema, sasabihin ko sige lang bumili siya."
"SEC is an institution which the public looks up to, binabantayan iyan ng publiko. Kinailangan pa ang isang Merle Pascual para aminin, though personally, na itong kumpanyang ito, mukhang okay kaya sige bili lang pero ito mukhang hindi okay, kaya iwas muna ng bili diyan. 'Yan ang matagal ng hinihintay ng publiko," Roxas said.

The Visayan senator added: "Ang masakit kasi dito, yung katahimikan ng SEC na kahit alam naman nila na may problema na ang isang kumpanya, wala pa rin silang aksyon para sabihan o warning-an ang publiko."
Barin said a review of the updated financial statements of the 22 licensed pre-need firms is now on-going to find out if they have the financial requirements to continue operating. The companies have until May 14 to submit their financial statements.

Roxas said SEC officials should acknowledge and accept the weight of their fiduciary responsibilities and exercise the broad powers granted to them under the Securities Regulations Code to protect the interests of the public.
"Hindi pwedeng maulit ang sitwasyong ito in six months, one year's time tapos nag-iba lang ang kumpanya at ang mga nagrereklamo. Hindi ito ang unang pangyayari sa industriyang ito. Kailangang ipakita ng SEC na karapat-dapat ito sa expectations ng ating mga kababayan, na kaya nitong pangalagaan ang interest ng taumbayan at hindi ang mga kumpanyang ito," he stressed.



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Kevin Ray N. Chua

Kevin Ray N. Chua is a 19 year-old blogger from Cebu City, Philippines and an IT Student at Cebu Institute of Technology.

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1 comments
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earthlingorgeous
on May 12, 2009 at 12:46 PM  

Hi Kevin,
Pasensya na don't know how to contact you. padating na kasi ang advertlets sa philippines and I am trying to gather as much as opinion from bloggers what they expect etc. I have a four question survery. I would appreciate if you and the bloggers from Cebu will also participate as I will be suggesting a nationwide and not just manila centralized blog ad things and events.
You got my e-mail diba. e-mail me ur e-mail para i can send you the questions. apat na tanong lang naman. I'll wait for answers from cebu bloggers if you can help me out.
Thanks.
Earth
P.S. burahin mo nalang ito pag nabasa mo na dunno how to reach your e-mail eh .

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