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Some smarter than others

(First Installment)


My dear, there are always people who are just a little faster, more brilliant, and more aggressive,” Imelda Marcos in 1979, replying to an American journalist’s question why so many of her relatives and friends had reached the top of business and government. Imelda’s quote was compressed into “Some are smarter than others” that became the title of an anti-dictatorship monograph on the Marcoses’ cronies.

What’s scandalous about President Aquino’s appointees in state firms generously giving themselves millions of pesos in bonuses when these enterprises aren’t, by any real measure, huge financial successes, is not just the amount these firms had to cough up to finance their lifestyles.

More galling is that many of these directors are either among the country’s richest, Aquino’s buddies and classmates, or those given generous compensation through these state firms for other services they provide the president. The highest paid in Aquino’s administration is Government Service Insurance System President Robert Vergara, the President’s Ateneo de Manila classmate. Vergara was paid by the GSIS nearly P36 million in the last three years. (2011 and 2012 income totaling P25 million from the Commission on Audit; 2013 income of P12 million based on my sources at the GSIS.)

The highest-paid chairman of a government firm is also at GSIS, Daniel Lacson, one of the trusted officials and advisers of President Aquino’s mother Cory and who was close to Aquino in the 1980s.  He received P8 million in those three years.

The second highest paid director of a state firm is also in GSIS, Gregorio Yu, a member of its perhaps misnamed Board of Trustees, who also got P8 million in compensation from the state employees’ pension and insurance firm from 2011-2013.

And who is Gregorio Yu?

Luxury car distributor
Among his many businesses, Yu owns CATS Motors, the exclusive distributor of Mercedes-Benz automobiles as well as top-of-the-line Chrysler, Dodge, and Jeep cars and SUVs.

Like Aquino, Yu is a luxury-car aficionado that was rumored three years ago to have “procured” for Aquino the P15-million Porsche 911 Turbo Carrera a few months after assuming power.  Aquino disposed of it after some public outrage.  Nobody though could verify the rumor, as Aquino never made public the car’s two deeds of sale—when he bought it and when he sold it.

Yu is certainly a survivor: He was one of former President Estrada’s close “San Juan” barkada, with Erap’s infamous private Club 419, just a few blocks away from CATS Motors.

Yu joined Aquino’s sisters in bankrolling the 2013 electoral bid of Aquino’s rent-an-NGO, Akbayan, donating P5 million. Yu is identified with the Chinese Filipino business group led by Ben Tiu, a construction-equipment importer and owner of the Discovery Suites hotel chain.  That group donated P15 million to Akbayan.

Yu is said to be now in the league of the Sy and Gokongwei scions, a billionaire, although I’m surprised he hasn’t been in the BIR’s top taxpayers’ list.   He is chairman, vice chairman, or director in about 20 companies other than CATS, which includes Sterling Bank of Asia, which he partly owns, Philippine Bank of Communications, and even Philippine Airlines.

You’d think that with his wealth and income, Yu would consider his work as GSIS director his civic duty, and pass on his income from the state firm.  No way, and a Pilipino term best describe Yu’s mentality: “Walang patawad.”

According to the Commission on Audit’s Report on Salaries and Allowances of those in government and government-owned firms for 2011 and 2012, and my sources for 2013 data, Yu’s compensation as GSIS director totaled P8 million for the last three years (see accompanying table).  But maybe Yu is in GSIS not really for the directors’ fees and bonuses.

Former Belle  Resources president
It is a bit ironic that Yu is a director of GSIS.  He was president of Belle Resources when then President Estrada in 2000 ordered the GSIS and the Social Security System to buy Belle’s shares (worth P1 billion and P0.8 billion, respectively) in the stock market to support the troubled firm and create windfall profits for it biggest stockholders who were the former president’s cronies.  Estrada got a bribe of P180 million for this, for which he was convicted for plunder.

What was one of GSIS’ biggest investments last year?

P800 million plunked into Belle Grande Integrated Resort and Casino project, although Belle since Estrada’s fall is now under mall king Henry Sy’s control. I am confident though that Yu didn’t have any say in influencing GSIS’ decision to have a casino and resort as one of its biggest investments.

The temptation for corruption is actually huge in GSIS, after Vergara ordered returned to the country P30 billion of the firm’s portfolio abroad to have it invested in Philippine markets. An injection by GSIS of just say, P200 million, in a particular stock could boost its prices. I hope GSIS for transparency discloses exactly where state-employees funds are being invested.

But I’m sure GSIS president Vergara wouldn’t be tempted.  Both in terms of basic salary and total compensation (which includes allowances and bonuses), Vergara is now the highest paid official in this administration unseating Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. who has held that distinction for at least a decade. Vergara’s total compensation in 2011 and 2012 of P25 million overtook Tetangco’s P20.3 million.


In fact, one of the first things Vergara did when he took over GSIS was to more than double the basic salary yearly of P4.3 million of his predecessor to P9.7 million. That assures him that his salary will be ahead of Tetangco’s P5.4 million, whether GSIS loses money or not.

Does he deserve it, when GSIS has P750 billion in assets, when there are dozens and dozens of very experienced fund managers here and abroad—using the most sophisticated techniques as math-based quantitative analysis—to whom the state firm can consult, or even source its fund-management work?

Aquino has been portraying Vergara as a hotshot fund manager in Hong Kong that it was even difficult to recruit him in 2010. Really? That’s for another column. A hint:  After the 2008-2009 financial crisis, fund managers in Hong Kong either found themselves unemployed, or twiddling their thumbs the whole day as there were little funds to manage.

Ateneo classmates
Or was Vergara’s biggest qualification—as in the case of Pagcor chairman Cristino Naguiat and Supreme Court Chief Justice Maria Lourdes Sereno—the fact that he went to college with President Aquino?

A former GSIS board member—a PR man through whom I attempted. unsuccessfully,  to get Vergara’s comments for this column—claimed that it was another “Vergara,” Liberal Party  stalwart and Cabanatuan Mayor Jay Vergara and  a cousin of the GSIS president, who  was Aquino’s classmate.

My sources who were at the Ateneo at that period insisted, however, that Aquino and the GSIS president were classmates in a few classes at the Ateneo, and were in fact friends.

The records do support that claim. The President graduated with Bachelor of Arts in Economics in 1981 (which normally lasts 4 years) while Vergara took the five-year Bachelor of Science in Management Engineering in 1982. That certainly puts them at the Ateneo at the same period.  Both are 52 years old as of this day.

GSIS board members certainly aren’t complaining that Vergara has a hot line to the President. After all, Vergara had been able get the board members the highest compensation in government:
Several of the GSIS board members aren’t even full time at the state firm.
Lacson is vice chairman of U-Bix Corp.  Karina David—the wife of the famous Philippine Daily Inquirer columnist Randy David and who served under the Cory, Estrada, Macapagal administrations—is in Malacañang’s Search Committee which evaluates candidates to government positions.

She had been one of the leaders of the Senior Former Government Officials, which had been at the forefront of Aquino’s political battles, but which has curiously become quiet in the past several months.

Roman Reyes is in the board of Philippine National Construction Corp., Bank of Commerce, Pasudeco, and All Asian Countertrade and chairman of his accounting firm Reyes Tacondong & Co. Aguja, a sociologist by academic training is an Akbayan party leader, and was its representative in Congress in 2002 to 2007.

It’s a wonder how they could earn P8 million each in two years attending biweekly board meetings.

Some are just smarter than others, I guess.

On Wednesday: At the Social Security System, even smarter.