Irked by the constant criticism of the foreign investments of the stat-run pension fund Government Service Insurance System, GSIS president Winston Garcia has come up with a revelation of his own (using, no doubt, his formidable intelligence network).

Garcia says the pension and retirement fund of this large, publicly listed utility firm has a deficit of P15 billion ? no thanks to the same stock market crash that has pummeled his GSIS? $600-million global investment program. [Read story]

He says the employees of this utility firm should be worried because their retirement benefits may have already evaporated.

Garcia says he won?t be surprised if the controlling shareholders of this utility firm will resort to raising the rates they charge consumers pretty soon, to make up for the losses they are incurring across their vast business empire.

The reader gets no points for guessing right which utility firm Garcia is referring to. Daxim L. Lucas

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Quo vadis, AIM?

After 40 years at its present site, the Asian Institute of Management may soon move to a new home. And the Ayala group, which donated the present site along Paseo de Roxas Avenue in Makati City (across from the Greenbelt 1 mall) to the AIM in the 1960s, is offering a new place through a swap deal.

In a letter to its alumni, the AIM said: ?... the school wishes to seek your opinion regarding a major initiative of your school. This is part of the implementation of AIM?s renewed strategy to be the management school of choice for those that want to operate in Asia. To be able to finance this new strategy and to aggressively revive our brand, AIM management is contemplating a major move that will, in effect, release the capital gains of our Makati campus, now valued at about P3 billion. This move is designed to fully extinguish our debt (P290 million), create a new, dynamic campus and hopefully leave us with excess liquidity for the start of an endowment fund.

?We are being offered a real estate arrangement with Ayala Corp., which involves a land swap deal involving our present campus. The opportunity has offered us two options to move our campus to a strategic location. These options exemplify two extremes?one is urban living type, while the other is university-destination type.

The first option is to move the campus to the Zuellig property on Malugay Street, at one end of Ayala Avenue, the main street of the Makati business district. This option foresees a high-rise AIM, part of an overall commercial-residential project.

The second option is to move the campus to the latest major project of Ayala Land Inc., called Nuvali, in the outskirts of southern Metro Manila. With Ayala Land as master developer, the five-hectare site will allow for a sprawling university-type, low-rise environment for the AIM.

Part of the Nuvali option is to leave the AIM Conference Center and Hotel out of the deal, so the AIM would still have a foothold in Makati for the non-degree courses while the degree programs move to Nuvali.

The alumni are asked to fill in a survey questionnaire and vote on the two options. Margie Quimpo-Espino

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Brown?s advice: DON?T buy Philex

Philex Mining Corp. chairman Walter Brown has this crisp piece of advice to the company?s stockholders regarding its coming P6-billion stock rights offer.

?I am pleased to inform you that you don?t have to do anything,? he said at an investors? briefing. ?You just have to sit back and relax and don?t exercise your preemptive right. Just let Mr. Pangilinan live up to his commitment and buy the shares.?

Veteran mining watchers at the briefing were also treated to a rare display of brutal honesty from stockholders who had a different take in warding off the state-run pension fund Social Security System (SSS) from acquiring more shares in Philex.

A minority stockholder who attended the briefing ?advised? SSS chief Romulo Neri NOT to invest in Philex because the stock was ?quite speculative.? The stockholder described Philex as ?a gambling stock? and pension funds should not be putting private employees? hard-earned money into these stocks.

Brown countered, saying Philex was ?not that speculative,? as it is dependent on market prices of metals.

He also took an indirect swipe at the ability of state institutions in running private businesses as he explained Philex?s stance against an exercise of the SSS? supposed preemptive right. The company, he said, ?wants to make clear to people that Philex is a professionally managed company.? Elizabeth Sanchez-Lacson

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$10-B brouhaha

The Philippines became an international laughingstock last week after the World Bank denied [read story] President Gloria Macapagal-Arroyo?s announcement that it would provide $10 billion for a facility that would be set up to help take out bad assets of ASEAN banks that might be affected by the world financial crisis.

Economic managers in town who attempted to clarify the issue ended up muddling it some more when they claimed it was the International Monetary Fund and not the World Bank that had committed such funding.

Staff who reviewed the recording of the Washington DC meetings swore that World Bank official Michael Klein indeed mentioned $10 billion in funding at a meeting specifically convened for the Philippine-initiated regional defense mechanism. Somebody even followed up with a query on whether the amount was enough, and Klein supposedly said something like ?Hopefully, it won?t even be used at all.?

So, the Philippine delegation led by Finance Secretary Margarito Teves was surprised by the denials that came out later, not just from the World Bank but also from ASEAN member Singapore [read story], which was represented at the meeting.

[Read latest story on the ASEAN+3 fund]

Lessons from this incident: 1. An ?indication? is different from a ?commitment.? 2. It ain?t over till the fat lady sings (and sometimes the lady who sings is not fat, but has a facial mole). Doris C. Dumlao

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PhilAm Savings may go first

AIG?s crown jewel is its life insurance business, but a deal on the sale of Philippine thrift banking arm AIG PhilAm Savings Bank may soon be forged ahead of any other asset under the Philamlife group.

PhilAm Savings now has 25 suitors in queue, our sources say. We scanned the list and found a number of major financial institutions and midsized commercial banks, thrift banks, and even some foreign players with consumer banking interests. At least six of the potential buyers are global players (including a private equity firm) and can afford to bid for the Philamlife group itself.

PhilAm Savings is quite small, with nine branches and P14 billion in assets. But it has a clean balance sheet, a growing credit card platform (with 232,000 cardholders) and is thus very ?easy? for any of these suitors to digest. A shortlist is expected to be drawn up by early November. Doris C. Dumlao