"From: edsmadrid@hotmail.com
To: pio@pnp.gov.ph
Subject: FW: PRIMANILA PLANS: THE PASSION TO SERVE CONTINUES AS WE RAISE THE BAR @20
Date: Tue, 20 Jan 2009 12:32:39 +0800
P/Chief Supt. Nicanor A. Bartolome
Dear Sir:
This is to follow up what we have emailed to your good office last March 16, 2008.
With due respect to the Primanila Planholders at PNP , we would like to communicate with you our desire to solve the predicament our company Primanila Plans is in at the moment.
We feel that proper dissemination and constant communication with the Planholders through your good office will fully uncover the real situation Primanila Plans and by knowing the root cause, we may be able to find the right solution to the concerns of the Planholders as well as our existence as a corporation.
For your favorable response and immediate action.
God bless and more power!
Very truly yours,
Eduardo S. Madrid
Chairman/CEO
Primanila Plans Inc.
Herein below is our email sent March 16, 2008
From: edsmadrid@hotmail.com
To: pio@pnp.gov.ph
Subject: FW: PRIMANILA PLANS: THE PASSION TO SERVE CONTINUES AS WE RAISE THE BAR @20
Date: Sun, 16 Mar 2008 06:19:06 +0800
From: edsmadrid@hotmail.com
To: pio@pnp.gov.ph
Subject: FW: PRIMANILA PLANS: THE PASSION TO SERVE CONTINUES AS WE RAISE THE BAR @20
Date: Thu, 28 Feb 2008 06:58:10 +0800
P/SR Nicanor A. Bartolome
PNP
Sir:
Please find herein below information explaining the status of Primanila Plans Inc. for the benefit of All Personnel & Officers of Philippine National Police who were All Primanila Planholders.
For your utmost cooperation.
Very respectfully yours,
Eduardo S. Madrid
Chairman/CEO
Primanila Plans, Inc.
From: edsmadrid@hotmail.com
To: mcenriquez@gmanetwork.com
Subject: PRIMANILA PLANS: THE PASSION TO SERVE CONTINUES AS WE RAISE THE BAR @20
Date: Mon, 18 Feb 2008 07:00:14 +0800
On October 17, 2008 will be our 20th Anniversary as a Pre-need Company. Therefore this year, We would like to continue our company's slogan of "The Passion to Serve" as " We Raise the Bar @ 20".
Through your timely intercession, you might bring justice to our planholders' plight and our company's existence as we are having difficulty with the closure of BANKWISE, INC. and the inability of our trustee, WISE CAPITAL INVESTMENT & TRUST COMPANY, INC. (WISECITCO) to release the trust funds intended for our planholders who have been waiting for more than fourteen(14) months as of this date.
For your favorable and immediate action.
God bless you always!
Eduardo S. Madrid
Chairman/CEO - Primanila Plans
A. Background
A.1 NATURE
The Pre-need plan is a financial service that gained popularity in the country because it suited the needs of the Filipinos. it is actually a savings mechanism for their children, pension upon their retirement and memorial service upon their demise.
A.2 History
Pacific Memorial Plans, Inc. (now Pacific Plans,Inc.) established the country's first pre-need company in 1966. It offered desired memorial service for planholders regardless of actual cost.
Later, College Assurance Plan Philippines, (CAP) Inc. introduced the traditional education plan in 1980. The original concept was for the pre-need company to cover the actual cost of tuition and other standard school fees at the time the student/beneficiary enters the school which the planholders have chosen beforehand upon the purchase of the plan.
A total of 92 pre-need companies have been registered over the past thirty years. In 2005, however, the number of pre-need companies licensed to operate is down to 32.
Throughout the years, the industry grew into a multi-billion industry. In 2004, the pre-need industry posted P157 billion in total assets, P65.6 billion or 41.78% of which pertain to the total Trust Fund maintained with the banking sector. About 66% of the Trust Fund was invested in government securities. The numbver of issued and outstanding pre-need plans as of February 2005 reached 3,740,872.
A.3 EXISTING REGULATORY FRAMEWORK: SEC REGULATION
Although the first pre-need company opened in 1966, the supervision of the SEC started only in 1978 when it issued its first "Rules on Registration and Sale of Pre-need Plans, Pension Plans, Life Plans and Similar Contracts and Investments."
With the approval of the Revised Securities Act in 1982, pre-need plans were included under the definition of securities which formally placed its regulation under the jurisdiction of SEC, being the regulator of securities.
In 1995, the shift in regulatory philosophy from merit system to full disclosure was applied to the pre-need industry. The concept requires companies to reveal all material information that will or might affect and influenced investors in their investment decisions. The system transfers to the investors the responsibility of doing his own evaluation and judgment based on the fully disclosed documents and lets him assume the risks inherent in any investment decision.
In 2000, the SEC adopted prudential measures in coming up with guidelines on where the trust fund should be invested. It also required an increase in the minimum paid-up capital of pre-need companies for which the latter were given time to comply with. The passage of the Securities Regulation Code (SRC) in July 2000, separated pre-need plans from the general category of securities and treated it as a class of its own. This justified the application of prodential regulation on the treatment of trust funds and their investments.
In 2001, the SEC commenced the implementation of the New Pre-Need Rules on Registration and Sale of Pre-need Plans under Section 16 of the SRC.
B. INDUSTRY PROBLEMS
In recent years, the country saw the downfall of several pre-need companies, including major industry players and pioneers.
The major factor that caused the failure of some companies is the issuance of traditional educational plans which consist of 21% of the total number of plans sold as of 2003. Under a traditional eduactional plan, the issuing pre-need company guarantees the payment of the actual cost of benefits or services promised regardless of the increase from the originally assumed values. The deregulation of tuition fees in 1992 resulted in the unforeseen tremendous increase in the obligations of Pre-Need Companies.
Another factor that contributed to the problem is bad management and investment decisions made by Pre-Need Companies. these actions have not been properly regulated by the SEC for a long time in view of the lack of funding and regulatory framework for the industry.
The industry problems were highlighted when the SEC implemented prudential rules for the industry, particularly the inclusion of the actuarial reserve liability in the financial statements of the company. Such inclusion of the ARL showed that some companies do not have enough assets to pay off their future obligations to the planholders.
The liquidity problems and trust fund deficiencies encountered by a number of pre-need companies as well as the filing of Petitins for Rehabilitations are the most glaring manifestations of the growing problems of the industry.
Considering the importance of the pre-need industry to the average Filipino and to the government, it should be given utmost attention. The industry should be saved from the danger of extinction brought about by problematic pre-need companies. Such importance of the Industry was emphasized by no less than the President of the Republic when she included in her 2005 State of the Nation Address her desire to speed up the passage of the Pre-Need Code.
C. PRIMANILA PLANS,INC.
Primanila Plans, Inc. was bought from the Group of Dr. Ramon Gevero by the Group of Mr. Eduardo Madrid last April, 2003. With the entry of Mr. Eduardo S. Madrid, the company is looking at a more aggressive thrust in the marketing of Primanila Pension Plans when the SEC approved an additional Two hundred Million (Php 200,000,000.00) Pesos securities for sale. By the year end 2004, Primanila Plans, Inc. landed in the Top 12,000 Philippine corporation when it registered as the 8,999th in the NEXT 5,000 CORPORATIONS Business Profiles 2005-2006 Edition published by Philippine Business Profiles and Perspectives, Inc.
Primanila Plans, Inc. was even adjudged as the GRAND SLAM WINNER as the 2004 TOP PRE-NEED COMPANY.
By the start of 2007, Primanila started feeling the heat when its Trustee Bank, Wise Capital Investment Trust Company, Inc. (wisecitco) would not release funds for the benefit of the Planholders. It was later known that Wisecitco's Mother Company, Wise Holdings, Inc. license to operate was revoked by SEC last June 2006. From hereon Primanila's problems which is more than a year now practically killed its operation to the prejudice of its Planholders, Shareholders, Employees and the Pre-Need Industry.
WHAT HAPPENED?
Sometime in November of 2006, the amount of Php 63,415,489.17 has remained in a trust fund account with Wisecitco in favor of Primanila Plans, Inc., which amount plus all interest earned therein are to guarantee the delivery of benefits to its Planholdes pursuant to Rule 16 f the Pre-Need Rules of the Securities and exchange Commission(SEC).
On November 16, 2006, the SEC en banc approved the cancellation of the trust agreement between Primanila Plans and Wisecitco, and a letter dated November 17, 2006 was sent by the Commission informing Wisecitco of the said approval and ordering the same to transfer the remaining trust fund assets to Asiatrust Bank not later than January 17, 2007.
In a letter dated April 12, 2007, the company has informed the Commission of its pending request with Wisecitco for the transfer of funds to Asiatrust Bank with its Planholders. As per said letter, Wisecitco could not allow any withdrawal from the fund because of the outstanding loans of Primanila with Bankwise Inc.
Since the reason of Wisecitco in not allowing any withdrawal from the trust fund is unjustified, if not to say irrelevant, a subsequent Order No. 11 issued by the Commission on April 25, 2007 was sent to Wisecitco directing the same to release the entire amount of liquid assets of the trust fund to Asiatrust Bank within five (5) days from receipt of the Order. In that same Order, the Commission cited the following provisions affecting Primanila's trust Fund deposit, as follows:
Paragraph 16.1 of Pre-Need Rules 16 states that:
"To guarantee the delivery of Benefits such as monetary consideration, cost of services or property delivered, deposits must be made by the issuer into a trust Fund to be established for each type of plan . . .x x x"
Moreover, Paragraph 20.2 of Pre-Need Rule 20 states that:
"The Trustee shall not use the trust Fund to invest or extend any loan or credit accomodation to the Pre-Need Company, its directors, officers, stockholders, and related interests as well as to persons or enterprises controlling, owned or controlled by, or under common control with said company, its directors, officers, stockholders and related interests."
In that same Order 11 issued by the Commission, Wisecitco was told that "Wisecitco has no right to withhold the trust fund and prejudiced the Planholders who are already entitled to claim of their matured plans. Likewise, the trust fund cannot be made as a collateral to any loan and/or credit accomodation it has granted Primanila."
On May 17, 2007 a letter was received by the Commission from Wisecitco. and a reply letter was sent to the latter on May 28, 2007, stating in part that "After a careful evaluation of the statements and/or contentions contained on said letter, we found the same devoid of merit, and therefore, this Commission affirms its previous Order of April 25, 2007."
On September 10, 2007, Mr. Eduardo S. Madrid sent a letter to Her Excellency, Madam Gloria Macapagal-Arroyo, seeking Presidential intercession on his request for the immediate release of Primanila's trust fund eith Wisecitco. On Septenber 28, 2007, the request was referred to the Hon. Nestor A. Espenilla, Jr., Deputy Governor, Banko Sentral ng Pilipinas for appropriate action/comment, consistent with existing laws, rules and regulations on the matter.
Subsequently, Mr. Madrid was informed by the Office of the Hon. Amado M. Tetangco, Jr., Governor, Banko Sentral ng Pilipinas, that Wisecitco was requested in a letter dated October 22, 2007 to communicate directly to Primanila as to their explanations and comments on Primanila's complaint, within ten (10) banking days from receipt, copy furnished the Governor's Office. Regrettably, Wisecitco has never than so after a lapse of about 20 days. So that Mr. Madrid, in a letter dated November 27, 2007, informed the BSP Governor of such inaction by Wisecitco, copy furnished the BSP Governor of such inaction by Wisecitco; copy furnished the Office of Her Excellency Madam Gloria Macapagal-Arroyo.
Last January 30, 2008, Wisecitco snubbed the mediation set by BSP. The second mediation set by BSP on February 13, 2008 was attended by Atty. Trinidad and Arnold Mapanao representing Wisecitco stating that Mr. Emmanuel Deles and Ramoncito Modesto already resigned . Another resetting is scheduled this February 27, 2008.
Majority of the Planholders were retired and in active service of the Philippine National Police.
The following general information sheets gathered lately at SEC revealed the following informations:
1. WISE HOLDINGS, INC. (AS OF JULY 21, 2003) STOCKHOLDERS/DIRECTORS
1.1 VR HOLDINGS, INC
1.2 PCD NOMINEE CORP
1.3 OTHER STOCKHOLDERS
1.4 RENATO Z. FRANCISCO
1.5 VICENTE J. CAMPA, JR.
1.6 EDUARDO L. ALINO
1.7 LAZARO LL. MADARA
1.8 RAMON L. MAPA
1.9 ANTONIO M. ORTIGAS
1.10 V. FRANCISCO VARUA
1.11 JULIANO LIM
1.12 ROLANDO K. DAVID
1.13 AUGUSTUS C. PAISO
1.14 ENRIQUE P. ESTEBAN
2. WISE CAPITAL CORPORATION (AS OF MAY 7, 2003) STOCKHOLDERS/DIRECTORS
2.1 WISE HOLDINGS,INC.
2.2 RENATO Z. FRANCISCO
2.3 VICENTE J. CAMPA JR.
2.4 LAZARO LL. MADARA
2.5 EDUARDO L. ALINO
2.6 ROLANDO K. DAVID
2.7 AUGUSTUS C. PAISO
2.8 RAMON L. MAPA
3. VR HOLDINGS CORPORATION (AS OF MARCH 31, 2006)
STOCKHOLDERS/DIRECTORS
3.1 VICENTE J. CAMPA JR.
3.2 RENATO Z. FRANCISCO
3.3 EDUARDO L. ALINO
3.4 RAMON L. MAPA
3.5 SALVACION M. MANALO
4. BANKWISE INC. (AS OF SEPT. 10, 2004) STOCKHOLDERS/DIRECTORS
4.1 WISE HOLDINGS INC.
4.2 VR HOLDINGS CORPORATION
4.3 DANTE ANG
4.4 LAZARO LL. MADARA
4.5 RENATO Z. FRANCISCO
4.6 VICENTE J. CAMPA JR.
4.7 ANTONIO M. ORTIGAS
4.8 BRETT TOLHURST
5. BMM PROPERTIES INC (AS OF JUNE 21, 2004) STOCKHOLDERS/DIRECTORS
5.1 MANUEL DE CASTRO
5.2 EMMANUEL DELES
5.3 ERLINDA DE CASTRO
5.4 LUIS CUERVO
5.5 ENRIQUE AUSTRIA
6. WISE CAPITAL INVESTMENT & TRUST COMPANY, INC. (WISECITCO)
(AS OF JULY 7, 2006) STOCKHOLDERS/DIRECTORS
6.1 WISE CAPITAL CORPORATION
6.2 WISE HOLDINGS INC.
6.3 RENATO Z. FRANCISCO
6.4 EMMANUEL T. DELES
6.5 ROLANDO K. DAVID
6.6 AUGUSTUS C. PAISO
6.7 RAMONCITO G. MODESTO
MARIO VILLAMOR was the Executive Vice President then became the President of BMM Properties Inc.
MR. EMMANUEL T. DELES & RAMONCITO MODESTO, who were the Executive Vice President & Chief Finance Officer respectively of Wisecitco and also the Credit Committe Members of Wisecitco, approved a loan to BMM Properties Inc. last November 29, 2006 despite the cancellation of the trust agreement last November 17, 2006 by SEC en banc from the Primanila's trust fund to the prejudice of Primanila's planholders.
YOU CAN VIEW OUR WEBSITE AT www.plans.primanila.com"
