CAP denies lending funds to MRT firm

The College Assurance Plan (CAP), a pre-need company with thousands of subscribers, denied yesterday a congressman's claim that it lent P1 billion to the builder-operator of the Metro Rail Transit project along EDSA.

In a statement, CAP president and chief executive officer Enrique Sobrepeña Jr. said no member of the consortium of several companies borrowed money from CAP.

Neither did CAP lend P1 billion to them, he said.

The consortium is led by Fil-Estate, which is headed by a son of Sobrepeña, Robert John. Its members are Ayala Land, Anglo-Philippines Holding Corp., Greenfield Development Corp., Allante Realty and Development Corp., DBH Corp., and Ramcar, Inc.

Over the weekend, Rep. Jacinto Paras (LAMP, Negros Oriental) claimed that the Fil-Estate group running the MRT project had borrowed P1 billion from CAP to meet its financial requirements.

Paras filed Resolution 1244 asking the House to look into the loan, saying CAP is supposed to hold its funds in trust for its subscribers.

As such, it should invest the money in more stable and risk-free instruments, he said.

CAP's Sobrepeña said his company's funds and those of a sister firm, CAP Pension Corp., are managed by five trustee-banks as required by the Securities and Exchange Commission (SEC), the agency supervising pre-need companies.

He said the banks should make the money grow but must always keep at least 10 percent of the funds in treasury bills or fixed-income securities.

"This is to assure the availability of funds to pay for maturing obligations of the pre-need company," he added.

He stressed that in the case of CAP and CAP Pension, they have maintained as liquid funds close to 20 percent of their money entrusted to banks.

The CAP official pointed out that there are safeguards to prevent possible misuse of the funds.

He explained that the trustee-banks are under the supervision and regulation of the Bangko Sentral ng Pilipinas, while the SEC has the power to check on the pre-need companies' deposits. --