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He tried to stop Indonesian’s capture of PLDT

In Memoriam: Perfecto R. Yasay Jr. (Jan. 27, 1947 – June 12, 2020)

First of 2 parts

WE have such short memories, and only a few will remember that Perfecto “Jun” Yasay Jr., President Rodrigo Duterte’s first Foreign Affairs secretary, audaciously tried to block the Indonesian tycoon Anthoni Salim’s 1998 takeover of the Philippine Long Distance Telephone Co. (PLDT), which violated the constitutional ban on foreigners controlling a utility firm.

Jun passed away on June 12. Our deepest condolences to his wife Cecile and his family. He was a bold man of integrity.

Jun would have been saddened by the turn of events: even with the ignoble fall in 2001 of President Joseph Estrada, who helped that takeover, Salim’s First Pacific group, using PLDT as its base, expanded to become the country’s biggest telecommunications and infrastructure conglomerate, its foreign ownership de facto camouflaged by the high profile of the Indonesian’s top executive Manuel V. Pangilinan. Foreign money in ABS-CBN Corp. is loose change compared to that of PLDT and the Salim conglomerate: their Hong Kong-based holding firm has received a least $1 billion in profits remitted from the Philippines since 1998. Such is the enormous power of corporate lawyers in our country.

Estrada even ran for the presidency in 2010, getting 9 million votes, 4 million more than those for former speaker Manuel Villar. In 2013 he was voted mayor of the nation’s capital, Manila. Such is our democracy.

What follows are excerpts from my book Colossal Deception: How Foreigners Control Our Telecoms Sector. A Case Study of Corruption, Cronyism and Regulatory Capture in the Philippines* that details and reports the sources for all these claims. The book was published in 2016, but neither Salim nor Pangilinan nor the First Pacific conglomerate have replied or refuted the book’s claims.

Book excerpts follow:

”It was President Joseph Estrada who made possible the sale of PLDT’s controlling shares to the Indonesian magnate Salim in 1998. Estrada allegedly received P3 billion for his critical help, according to several accounts, including that of the Securities and Exchange Commission (SEC) chairman at that time, now Foreign Affairs Secretary Perfecto Yasay Jr.,

Salim’s takeover of PLDT by law required the SEC’s clearances because it was a listed firm, and the transaction involved a major change in ownership. Yasay, the SEC chairman at the time, claimed that when he refused to follow Estrada’s order not to question the PLDT sale, he was suspended on flimsy graft allegations and replaced with a more cooperative head.

* * *

Estrada, according to Yasay, had bragged to him in one of the President’s many drinking sessions that his operators had told him that they could raise P300 million ‘in fees’ for the sale of PLDT to First Pacific. [Mark] Jimenez reportedly told Estrada that P300 million was small since normal broker’s fees for such a huge deal should be 5 to 7 percent, which he said he could get if he handled the deal. Estrada ordered his people to turn over the PLDT project to him.

Yasay had been appointed for a seven-year term in 1995 by Estrada’s predecessor President Fidel Ramos. SEC could have investigated the PLDT takeover as this was done in secrecy, violating rules for such major change in ownership in a listed firm that would obviously affect its share prices.

The PLDT in fact did not file a single disclosure report to the SEC on First Pacific’s takeover bid, or the fact that by September, its subsidiaries had accumulated 5.9 percent of PLDT, enough for one board seat.

Preventive suspension

Yasay was meted a 90-day ‘preventive’ suspension in July 1998 by the Office of the Ombudsman, on what clearly were trumped-up charges, filed by the owner of a canteen in the building where the agency was located. Yasay told this writer in an interview in November 2014 that it was a plot by Estrada himself who knew he would investigate the PLDT takeover with a fine-tooth comb.

The officer-in-charge appointed when Yasay was suspended, Eloisa Gloria — a law-school classmate of Estrada’s executive secretary Ronaldo Zamora — also didn’t ask PLDT to report on its change in ownership.

When Yasay’s 90-day suspension ended on Oct. 22, 1998, the Ombudsman issued another 90-day suspension the next day. It was only on Dec. 28, 1998 that the Supreme Court ordered Yasay reinstated, after the PLDT takeover was a done deal.

Estrada, however, issued Executive Order 60 on Jan. 13, 1999, which removed the SEC’s supervision from the Department of Finance to the Office of the President and even gave the President the oversight over ‘matters not expressly appealable to the Court of Appeals.’ That meant that any investigation for violations of securities laws — which the PLDT sale could have committed — had to be cleared with Estrada.

Yasay alleged in November 2000 that Estrada received $20 million (P1 billion) to help First Pacific’s buyout of PLDT. ‘Yasay’s revelation substantiated rumors that had already been circulating in the media, claiming that Estrada and his men received pay-offs that were integrated into the total purchase price and thus appeared as part of the purchase cost,’ according to an academic book published in Singapore by Lorraine Salazar.

Metro Pacific

First Pacific had denied at that time Yasay’s claim and categorically stated that neither the company nor Metro Pacific, its subsidiary, made payments to President Estrada.

Yasay repeated his allegations under oath during Estrada’s impeachment trial in January 2001, and the Senate summoned Pangilinan to respond to the claims to clarify the matter.

In his testimony Yasay said that Estrada personally called him several times to give him instructions regarding First Pacific’s acquisition of PLDT, one of which was to deny the application for a temporary restraining order filed by PLDT’s minority stockholders.

‘Estrada told me that he already had a ‘commitment to foreign investors,’ Yasay said in the Senate hearing. However, on January 17, the impeachment proceedings were disrupted after Estrada’s senators voted against the opening of an envelope supposedly containing records of Estrada’s bank accounts and the prosecutors walked out, so the trial was suspended.

In his 2005 book Out of the Lion’s Den, Yasay claimed the fee for Salim’s acquisition of PLDT was not just P1 billion, but P3 billion. ‘The information that reached me ran thus: Jimenez gave Estrada P1 billion pesos, stating that the amount was the commission earned from the transaction,’ he wrote.


The President was initially elated and assumed he received the entire commission from the deal, only to learn a couple of days later that the commission totaled P3 billion. When asked for an explanation, Jimenez was said to have replied that he shared P1 billion with Executive Secretary Zamora, and that he (Jimenez) had kept the remaining billion.

Accordingly, President Estrada icily remarked: ‘Mag-presidente kayo muna bago kayo makihati sa akin ng ganyan.’

Estrada then asked Jimenez to turn over another P1 billion and directed that Jimenez and Zamora share the balance at P500 million each.” Yasay affirmed these allegations when this author interviewed him in December 2014.

Estrada himself had confirmed Jimenez’s role in the PLDT buyout, calling him a ‘corporate genius’ in wrapping up that deal and another. He told reporters, in Filipino, in June 1999: ‘Because Jimenez was instrumental in the mergers of PLDT and First Metro Pacific,’ and PCI Bank and Equitable Bank, he has done a lot of good for the economy. This is why I called him a corporate genius because this is the truth.’

‘Mark Jimenez was broker for both the buyer and the seller,’ according to Edgardo Espiritu, Estrada’s finance secretary at the time, who was protesting the use of SSS and GSIS funds for the takeover of PLDT.

Estrada distances

However, after more than a decade, Estrada completely distances himself from Jimenez. “In his meetings with businessmen, he would pretend to be talking to me over his phone,” Estrada said in an interview with this writer in 2015 at his office as the mayor of Manila.

‘It was Jimenez who was involved in that PLDT buyout, I didn’t have anything to do with it,’ Estrada told this writer. An article in the magazine of the Philippine Center for Investigative Journalism also claimed: ‘The sale, according to various other sources, generated a P3-billion commission — about 10 percent — from both sides of the transaction. Jimenez supposedly split this amount with Estrada’.”

On Wednesday: Banker and PLDT shareholder, the late Ambassador Alfonso Yuchengco, corroborates Yasay’s narrative on what was the biggest forcible buy-out of a firm in our history.

*Book available at Popular Book Store in Q.C.; print and kindle at amazon.com

Order my book DEBUNKED at rigobertotiglao.com/debunked

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