When government profits or fails, it must pay back

There is something seriously wrong with the system if government regulators come in only when a company is sunk or has depleted its assets. Why should the public and “investors” learn about a failed corporation or a bankrupt bank through Facebook, media or rumors and why must we learn only when it’s too late to recover anything?

Even before, the Insurance Commission and the SEC confirmed that another pre-need company has bellied up, we already heard rumors that Prudential Life Plans Inc. was in financial troubles.

Last Wednesday I received a text from my Mom that my brother who had bought educational plans for his three youngest children had just been informed that the company would not be able to meet its obligations due to a lock down imposed by the Insurance Commission.

In fairness to the regulators, it seems that the SEC and the Insurance Commission have long been on the case of Prudential Life Plans Inc. but from the looks of it, the intervention was another case of too little too late.

If regulators were doing their jobs really well, one would assume that problems would have been detected early on. But in the Philippines, the regulators don’t come in until there is a yellow flag on the field, or if someone decides to raise an issue or makes a complaint.

Given the repeated failures of banks and pre-need companies in the recent past, one would imagine that regulators are justified to proactively investigate and continuously monitor the assets and financial management of such companies.

Losing money is one thing, but when the ultimate consequence is that children are deprived of their right to a good education, the whole thing is a failure of government and not just business. A government that cannot protect the future and the education of its citizens is a weak government.

The question now is, will the Aquino government and its regulators simply allow Prudential Life Plans Inc. to close down without punishment or penalty? Will the regulators let the company owners and officials simply walk away while thousands of plan holders are once again robbed of a promise and a future?

Will it be the same case as happened during the Arroyo administration when friendship and political support was cashed in for immunity? Why was that case allowed to be swept under the rug and judicial hocus-pocus?

What a great tragedy we live in. Two months into the year and we have gone through two major natural disasters that have claimed lives in the thousands. Two months into the year and we have two controversial and financially devastating incidents where a bank that has repeatedly been closed is once again being opened while another pre-need company that has swallowed people’s trusts and their children’s future has been declared dead on the spot.

It is ironic that victims of storm Sendong and the latest earthquake actually received compensation from the government while President Aquino personally delivered checks to fund rehabilitation projects. But what about victims of corporate greed or government incompetence, what assistance does government offer them?

Whenever a Filipino buys any form of insurance the Philippine government collects multiple types of taxes. The Philippine Government cannot be allowed to profit from such taxes and have no responsibility or liabilities particularly when it fails to regulate and protect the interests of the public!  

Who needs a fireman when the house has burned down, what purpose and hope do regulators provide when the remaining assets of Prudential Life Plan Inc. cannot even cover half of their liabilities? And by the way, when will Congress ever pass a law that gives priority to customers, the small people first, when the company’s assets are partitioned?

From the looks of it, the small people or customers like my brother will be lucky if they get 10 centavos to every peso they invested. Once again, Filipinos will have to help each other and look out for each other because the government is only interested in collecting their share of the profit, the transaction or the sale.

As for the future generation of parents and savers, go to the hardware, buy a six-inch diameter gauge 40 GI pipe. Take it to a welder, have him weld both ends shut with steel plates and then ask him to cut a hole big enough to put in folded P100-P200-P500 and P1000 bills.

A steel “alkansya” won’t easily be burnt in a fire, if you make it long enough and chain and lock it down to the wall, it won’t be easy to haul off or pilfer and if you stick to P1,000 bills, you will eventually have enough to send a child to school.

Forgive my “Fundamentalist” mentality but saving is about putting money away. Placing the money in a bank that has a history of bad management and government intervention is not saving or investing, it’s called high stakes gambling. The two percent interest you get on your bank account won’t even cover the sacrifice as well as the expense of gasoline or fare going to the bank.

I believe in providing for the future but at the rate pre-need companies belly up and considering all the money government collects in form of multiple taxes, the next time I get enough money to put aside; I’m buying a steel pipe! I want my investment where I can see it.

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