OUR SCARY TOPIC TODAY IS ANOTHER bungled project of IBM, the US blue-chip International Business Machines Corp.

Based on reports abroad, the newly discontented client of IBM is another government unit, this time the London Borough of Southwark.

I just thought the news would make our own GSIS, the Government Service Insurance System, feel that it was not alone in its troubles with IBM.

Nobody can say if Southwark and the GSIS are merely dancing the tango, but the two cases sounded frighteningly similar. Both the GSIS and Southwark got into a legal tangle with IBM for… well, software failures.

Southwark is no ordinary customer of IBM, and Southwark is not without clout in the global business scene.

After all, Southwark is the historic part of central London, located right beside the financial district known as “Square Mile.” For the sake of action stars in the Senate, it is also the site of the London Bridge.

Anyway, Southwark contracted IBM for a software system that was supposed to integrate the borough’s databases into one system.

IBM in effect sold to Southwark a system similar to the one sold by IBM to the GSIS.

According to news from abroad, Southwark officials complained that the IBM software did not work, slowing down the updating of Southwark’s information.

It seems that, like the GSIS case, the government of Southwark also tried to work out the problem with IBM for all of 18 months.

Southwark officials claimed IBM could not come up with solutions that would not involve “significant financial outlay.”

It so happened that, to pay for the problematic IBM systems, Southwark used public funds.

And so, as quoted in the reports, the Southwark spokesperson said, “we had no option but to try to reclaim the money from IBM.”

Also as expected, IBM released to media its standard reaction, saying that the Southwark case had no merit.

Now where did I hear that same statement before?

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TO REFRESH your memory, the GSIS sued IBM early this year over a similar problem. Remember—that “crash” in the GSIS computer system?

The pension fund could not process the papers of its more than 1.5 million members, including loan applications.

For many of the needy GSIS members, particularly public school teachers, that was cause enough to start a revolution.

Thus the GSIS—and not IBM—got the brunt of its members’ anger. To think, the GSIS had spent a fortune on the IBM systems.

Word in the local IT sector was that the GSIS already had troubles with the IBM system ever since it was installed three years ago.

The GSIS held a public bidding for the project, which was won by Questronix Corp. and SAP Corp. (from Germany), which in turn used the software called DB2, which was provided by IBM.

When the GSIS system, that was supposedly “managed” by the IBM DB2 software, “crashed” early this year, about 90 percent of the GSIS operations were affected.

The GSIS resorted to batch processing of its documents, which the fund continues to do up to now.

At least the GSIS is not alone in its software misery. Both Southwark and the GSIS are running after the same multinational group for damages and refund.

Based on its financial statements, IBM revenue reached more than $100 billion last year. Its net income amounted to more than $12 billion.

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IN THE BANKING sector these days, the interest rates in the United States are becoming a big deal.

For one, the US Federal Reserve or the Fed, just decided to keep the US interest rates at between zero and 0.25 percent. (They were more than 5 percent about two years ago.)

To the bankers, the Fed’s decision is not good news at all on the US economic recession, which continues to ripple throughout the world, including the Philippines—particularly its garments and electronics industries.

The US economy posted a 3.5-percent growth in the past quarter. So why did the Fed decide to keep the rates artificially low?

HSBC Philippines president and CEO Mark Watkinson has been preaching that the Fed would try to keep the rates low for as long as possible, even with the US economy already showing signs of recovery.

Watkinson is one of those bankers who believe that US interest rates would remain low until the middle of 2010—at the earliest.

Meaning, of course, that the US economy remains iffy until then. This, in turn, is bad for Philippine business.

HSBC for one has some 7,000 workers in its BPO units here, processing paperwork from its businesses from all over the world.