e-GSIS, an e-government pioneer

When I went to UP for my undergraduate degree, I always passed the GSIS building on the way to school. I always wondered what kind of person ran a monolith like the GSIS, the pension plan for all government employees. (For those of you who are GPS-impaired like me, the GSIS building is now on the reclaimed area in Manila Bay.)

I had a chance to listen to Mr. Winston Garcia speak about his vision last week during his interview on ANC. He is quite keen on improving service to his membership through the use of technology. He is well aware of how the new tools like mobile phone texting, the Internet and smart cards can help improve the service level and cost-efficiency of the pension plan. Although he has a big vision, he is also realistic that things have to happen step by step. I was impressed.

The GSIS launched its website (e-GSIS) recently, enabling a member to take a quick look at or download his statement of accounts and his transactions for policy, salary, emergency and housing loans. However, to augment its penetration strategy, the pension plan launched last week its infotext service, which will allow its members to do the same via the mobile phone. The pension plan believes that close to 90 percent of its members have either a Globe or Smart cellphone.

(To register, members just have to type GSIS Reg <Policy#> <Last Name> <First Name> and send to 248 for Smart users or 2390 for Globe users. The one-time registration will lead a GSIS member to all accessible transactions. Any government employee with a cellphone can just text the GSIS.)

My Two Cents: Keep up the good work, Mr. Garcia! I hope a lot of your colleagues will follow your lead in both vision and execution.

Big deals

We have had big headlines on potential changes in corporate control this past week. As a student of corporate change and control, I was quite interested.

PLDT. In an exciting announcement, the First Pacific Group of HK, owner of 24.4 percent of PLDT, announced that it was in discussions with the Gokongwei Group for both its interests in Bonifacio Land and PLDT. However, Manny Pangilinan, MVP for short, did not agree with the sale and is currently putting together a counter-offer. Possibly joining MVP in this buyout consortium is Tonyboy Cojuangco, the chairman, and NTT. Apparently, NTT has the right of first refusal on the First Pacific shares and has a concern with the Gokongwei’s recent alleged credit behavior (euphemism for "did not pay its big vendors like Ericsson and NTT") that they would rather have MVP at the helm.

I think it would be a brilliant move for the Gokongwei Group, if telecoms were, indeed, their strategic direction. (Though I am not convinced that telecoms is where they want to be).

PLDT is not an easy turnaround. MVP has been there for a few years and only now is his impact being felt. (Quite a positive impact too!) Add on to the challenge a balance sheet with a huge amount of foreign debt (P169 billion).

My Two Cents: Whether the Gokongweis or MVP wins this battle, there is still the huge corporate culture of monopolistic complacency that they need to overcome to win the war.

MERALCO. The Lopezes’ holdings recently came under notice after the PPA (purchased power adjustment) issue, with the 3.4 million customers of Meralco getting charged more for the PPA than the actual electric charge. This caused quite a commotion and protest that the President herself had to temporarily suspend it. (Why she did so is not the point of this article.) In addition, the company is allegedly overcharging its customers even though it is requesting for an increase from the ERB. As usual for private utilities that are perceived to overcharge, there will always be calls for the government to take it back.

A recent headline read "Lopez: Meralco not for sale at any price." As a student of corporate control, I maintain that their ability to keep control is not completely up to them. In the realm of possibilities, if a hostile party or the government really wants to squeeze the Lopezes, they just need to tender for the 70.2 percent in the public market. (Of course, theory is easier said than done, and will cost a lot of money and a ton of legal fees, but doable.) The new shareholders can then decide to recapitalize the company by doubling its capital. If the Lopezes do not have the funds to ante up in a recapitalization, their percentage, despite preemptive rights, is squeezed. Ergo, the new shareholders do not need to buy 29.8 percent of what the Lopezes hold to take control. If they have 32 1/3 percent, then my point is moot.

My Two Cents: I hope it stays private, whether in the Lopezes’ hands or not. Government should be in the business of building and providing a good environment (laws and infrastructure) for business, not in the business itself.

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Dickson Co is CFO (C is for Cheap) for both Dfnn.com and HatchAsia.com. For comments or suggestions, e-mail [email protected]