On the new SEC leadership

I know of a few who are working on getting appointed to the chairmanship of the Securities and Exchange Commission (SEC) so imagine my surprise when Malacañang announced the appointment of Atty. Teresita Herbosa of the ACCRA Law Firm to this much sought after post in government.

 I first heard of Atty. Herbosa when her office called me up right after passing the bar for possible hiring in ACCRA. That’s when I asked around about her. She was then and continues to be the head of ACCRA’s litigation department and I knew then she was no ordinary lawyer. Some male lawyers told me she has bigger “____” than them inside the courtroom. Not every lawyer has what it takes to be a brilliant litigator. Atty. Herbosa is acknowledged worldwide as one of the best litigators in the country. She is also ACCRA’s co-managing partner.

Imagine my surprise upon entering her ACCRA office for the interview when she smiled and said it was an honor for ACCRA that someone like me considered being employed in their law office. Coming from her, it made me feel good. I asked her if they allowed junior lawyers to teach and she said that while it is not prohibited, it is not encouraged. It was kind of stupid of me to ask that question when by just asking around, I would have known that junior lawyers in ACCRA, especially those assigned in the litigation department, work almost 24/7 for maybe three years Atty. Herbosa shared that she considered teaching remedial law only when she became senior partner of ACCRA.

Unfortunately, I didn’t feel ready to give up journalism and teaching nor was ACCRA ready to give me freedom to engage in extra-curricular activities so things didn’t work out. But I nevertheless saved Atty. Herbosa’s mobile number for some reason. That was more than two years ago.

So immediately after reading about her appointment, I texted her to congratulate her and asked her a few questions. But she begged off from answering until after her oath taking which will make her appointment official. But we agreed to see each other after that.

Atty. Ave Cruz, ACCRA founding partner and our president at the ASEAN Law Association (Philippines), tells me that Atty. Herbosa is their most experienced litigator, with a wide background in corporate disputes. He adds that as far as management skills are concerned, her integrity is tested.

Being at the helm of the SEC is no small task. We wish Atty. Tess all the best. Her “toughness” will definitely be put to a test.

Learning from DBP

With a less-than-rosy fiscal outlook made worse by the ripple effect of soaring fuel prices on the domestic economy, the Aquino administration needs to be more creative in identifying ways to raise more funds to fulfill its promise of sweeping reforms and far better living standards.

One way to raise funds is for the President’s economic and finance managers to whip government financial institutions (GFIs) and government-owned and controlled corporations (GOCCs) into shape.

Malacañang can probably learn a thing or two from Reynaldo David, the former CEO and president of the Development Bank of the Philippines (DBP), who elevated this GFI’s financial position to record levels during his term.

From 2005 to 2009 when he served as its CEO, the DBP was able to increase its aggregate net income by an impressive 95 percent to P18.27 billion, compared to the five years previous to that when the bank’s combined earnings stood at only P9.36 billion.

During David’s tenure, the DBP substantially increased its bottomline, which enabled it to remit 50 percent of its net income to the national government as cash dividends.

In January 2010, David reported that from a paid-up capital of merely P2.5 billion in 1986, when DBP was recapitalized, its total net worth today stood last year at P40 billion as a result of the strong earnings it generated during his term.

This was apparently a result of earnings generated over the years that amounted to P49.7 billion. From these earnings, P18.2 billion in cash dividends were remitted to the National Treasury.

Furthermore, if DBP were to market its various hard assets, this GFI would have another P6 billion in additional equity reserves. According to a report, DBP’s current market value could easily reach P50 billion.

Besides this dramatic increase in the DBP’s income and assets, the bank was also able to pay 24.3 billion in taxes to the BIR, of which 50 percent was remitted during David’s five-year tenure at the bank.

Unknown to most of us, the DBP also helped repatriate OFWs in distress during David’s term.

The bank had teamed up with other government agencies to bring home more than 500 OFWs, who were maltreated and abused by their employers, from various parts of the Middle East.

David was also responsible for the bank’s acquisition of the Al Amanah Bank and the National Maritime Leasing Corp. (NMLC) in 2008. The former move was done to institutionalize and expand financial assistance to Filipino Muslims, especially those living in far-flung areas where there are no banks or lending firms.

In 2006, the DBP for the first time tapped the international market to raise “quasi-capital” by issuing Hybrid Tier 1 Capital notes, which, as a testament to the global confidence generated by the bank under David’s leadership, was oversubscribed 13 times.

The DBP subsequently raised P2.3 billion in funds for its Tier II capital notes. These two bond issues were not guaranteed by the Nationa Government, but the ratings given to them by Standard & Poor’s, Fitch and Moody’s were identical to the National Government’s rating.

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