Boss, we have a problem: The government-run Development Bank of the Philippines seems to be going out of kilter, appallingly lagging in profitability behind other banks, including another government bank, the Land Bank of the Philippines.
Moreover, the DBP management—headed by Gil Buenaventura as president, who is a former executive of the Bank of the Philippine Islands—must be hearing the rumblings among the bank employees, mainly because of the current management’s penchant for hiring consultants.
From what I heard, while other banks enjoyed some sort of profit bonanza during first quarter of 2013, primarily through big trading gains in their treasury units, which for instance rode on favorable interest rate policy of the Bangko Sentral, DBP showed a dismal profit of less than P1 billion.
In the same months, in comparison, Land Bank reportedly posted profits of about P3 billion. To think, out of the P1 billion or so profit recorded by DBP, easily P750 million, or about two-thirds, came from the bank’s income in the Metro Rail Transit (MRT) bonds that the bank bought more than three years ago.
For the entire 2012, the bank reportedly made less than P1 billion from its operations, compared to—say—P7 billion in 2009, or the last full year of the bank under the cute administration of the under-house-arrest Gloriaetta.
Now, in October last year, this section reported that Buenaventura, as new president of DBP, had to face up to the problem of an ebbing pool of executive talent in the bank, owing to its early retirement program, which seemed to attract the good ones among DBP executives.
It seems Buenaventura took the report in this section to heart. From what I gathered, the DBP employees are now up in arms against his penchant for hiring—as highly paid executives—a number of former officers of BPI.
So much so that, among DBP employees, the government bank is now known as the “Development Bank of the Philippine Islands,” in obvious reference to the numerous executives in the bank who already retired from the private BPI.
Moreover, based on word going around in banking, the lackadaisically performing DBP now boasts of about 50 highly paid consultants in various positions, such as consultant to the board members, who reportedly hired two consultants each.
Aside from their personal consultants, the board members have a number of consultants who are serving the board as a collective body. The bank has consultants for strategic planning, research, IT, human resource management, security, corporate affairs, audit and treasury.
From what I gathered, DBP employees are rumbling against the practice of hiring consultants, not to mention the preference of the bank for former BPI executives, because a number of the new guys (and women) supposedly did not even have experience in banking.
For example, the DBP hired one consultant who eventually became a top officer, although his main qualification was being president of an IT company previous to the DBP top position.
To top it all, the consultants are supposedly laughing all the way to the bank, getting much higher pay than the ordinary folk in DBP, with a number of the consultants said to be receiving each at least P500,000 a month—or P6 million a year minimum.
Unfortunately for the DBP employees, it seems like a cruel prank that they have no one to air their concerns to, including our leader Benigno Simeon (aka BS), simply because he supposedly already delegated the mundane task of overseeing GFIs (government financial institutions) to his subordinates in the Cabinet. Aray!
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We received this letter from Danilo B. Jugno, general manager of Picar Development Corporation, which we wrote about recently:
“We are writing on behalf of our clients, Picar Development Corporation and AMA Land, Inc. (AMALI) to set the record straight on the developments concerning their projects which you wrote about in your April 11, 2013 column in the Philippine Daily Inquirer.
“As you know, Picar is the developer of The Chelsea Residences Alabang, The Stratford Residences, and Ara Vista, while AMALI is the developer of The AMA Residences.
“Chelsea Residences Alabang: The condominium building was launched by Picar on Aug. 15, 2012 and has pre-sold 51 units by virtue of its temporary license to sell which expired on Jan. 26, 2013. An application for a permanent license to sell is now pending with the Housing and Land Use Regulatory Board (HLURB). It was issued a building permit on April 2. The excavation of the site has started and an inspection by the HLURB has been scheduled. The permanent license to sell will be issued after the HLURB inspection.
“Stratford Residences: We launched the project in 2010 with the intent of building a 74-storey structure, the tallest residential building in the Philippines. Delivery date of the project is Dec. 31, 2015, not 2014.
“Picar has finished nine floors of the basement level parking and will commence construction of the ground level in May 2013.
“The Stratford Residences is part of a high-end development in Picar Place, which includes the Buddha Bar and the Movenpick Hotel and Serviced Apartments. The seven-star Buddha Bar, lounge and restaurant, has been operating since January 2012. The Movenpick Hotel and Service Apartments at Stratford 3 is under construction. Another residential condominium tower will commence construction in 2014 at Stratford 2.
“Picar has commissioned the Asian Institute of Technology in Thailand to carry out the structural performance-based evaluation of the Stratford Residences. While the tests required additional time in the project timetable, these have not resulted in any substantial delay.
“What caused substantial delay was the flooding at the project site due to the negligence of the contractor of the adjacent “Milano” project of Century City Development Corporation. Picar has filed a criminal complaint for reckless imprudence resulting in damage to property against the contractor of Milano. The case is pending appeal with the Department of Justice.
“Ara Vista: This is Picar’s 50-hectare township development project in General Trias, Cavite City. The first phase of the project has been sold out, and so are almost 60 percent of the units in the second phase. A huge clubhouse with a swimming pool and tennis court is finished and the turnover of completed units is ongoing.
“AMA Tower Residences: Work on the property on Edsa is now on the 18th floor. Had we not been slapped with an injunction in 2011, we would have topped off the building by now. The Tower is expected to top off in September 2013.”