Biz Buzz: PCSO stands its ground
It doesn’t look like the Philippine Charity Sweepstakes Office (PCSO) will retreat an inch in its ongoing contract termination dispute with publicly listed IT provider DFNN Inc., no matter how much the latter complains.
That was according to our sources at the state lottery agency’s legal department who told Biz Buzz that PCSO’s settlement offer to the Ramon Garcia Jr.-headed firm is final: “P27 million, and not a centavo more. Take it or leave it.”
The dispute stems from a contract between PCSO and DFNN which was entered into by the previous administration. The deal would have given the IT firm the right to develop a mobile device-based betting system for lotto games.
On any given day—and especially on days when the prize money grows to hundreds of millions—the queues at lotto outlets and terminals nationwide stretch to hundred of meters, with thousands of bettors waiting in line, some for a long time just to place bets.
The scheme envisioned by PCSO and DFNN would have allowed anyone with a mobile phone to place bets right on their devices. No need for queues, and no need for flimsy lotto tickets that could be lost, torn or defaced. Imagine the earning potential for all parties involved, especially since almost everyone in the Philippines loves lotto and everyone has a mobile phone.
Alas, the new PCSO leadership under the Aquino administration decided that the time was not right for the project, and terminated its deal with DFNN.
The dispute went to the arbitration court, which favored PCSO.
“The arbitration court said PCSO owes DFNN P27 million, so that’s what we’ll pay them,” an official said, adding that DFNN is not entitled to any additional benefits from what is currently on the table.
“The [court’s] decision does not provide for the reinstatement of the ELA,” he added, referring to the equipment lease agreement which DFNN wants enforced so it could have a foot in the door when the time comes for lotto betting to go mobile.
The PCSO official said DFNN was now trying to pin the blame for its troubles on its business rivals “which is simply not true.”
Interestingly, DFNN is chaired by Antonio Lopa, who is an uncle of President Aquino. Even that connection didn’t seem to help the firm’s fortunes with the PCSO board.
“I guess you can say the agency’s actions are really based on the merits of the case,” the official said.
Case closed? Maybe not, given the fact that DFNN is in a fighting mood.–Daxim L. Lucas
Out of the shadows
High-profile personnel movements seem to be the norm in the banking community nowadays.
And along with this trend, Biz Buzz has learned that HSBC treasury official Noel Malabag has stepped out of the shadow of his longtime boss and mentor, Wick Veloso, having recently decided to accept an offer to head the treasury unit of Philippine Veterans Bank.
Malabag has, for many years, been Veloso’s right-hand man and troubleshooter at HSBC’s large treasury operations in the country. In fulfilling this role, Malabag gave his boss the freedom to mind other aspects of the bank (which helped in no small measure to Veloso being appointed HSBC’s first Filipino country head, we understand).
In any case, Malabag apparently felt the time was right for him to come into his own as a bank treasurer and he could not have chosen a more challenging task to take on. His marching orders from the bosses of Veterans Bank, we understand, include revamping the privately owned (but government-influenced) financial institution treasury operations and maximize the billions of pesos in its coffers that are currently underutilized.–Daxim Lucas
Speaking of which…
There are more movements in the treasury units of banks. Biz Buzz recently learned that Mariquita Agena had tendered her resignation as treasurer of Development Bank of the Philippines (DBP) in the wake of revelations last month about the questionable bond trades executed last year at the state-run financial institution.
Our sources disclosed that Agena ended her DBP stint on June 30, having gone on terminal leave a few days before that.
Word within the bank was that DBP’s board of directors was bent on blaming Agena and two other treasury officials for the so-called P14-billion “wash sales” that, after the smoke cleared, resulted in losses of at least P700 million for the bank.
The three treasury officials, however, are pointing back at the board, saying that their proposal for dealing with the growing losses in the bank’s bond holdings had the green light from the bank’s top brass.
How will this issue be resolved? Apparently, the ball is now with the regulatory agencies that are probing the matter, namely the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission. Abangan.–Daxim L. Lucas
Futsal Cup champ
A team from telecom giant Philippine Long Distance Telephone Co. (PLDT) dominated this year’s Futsal Cup of the Philippine Stock Exchange, beating First Metro Philippine Equity Exchange Traded Fund Inc. (the first exchange traded fund in the Philippines) during the championship match. First Metro ended as runner-up for the second year in a row.
At the tournament held at Emilio Aguinaldo College Gymnasium in Manila recently, PLDT also swept all the individual awards. Norman Azarcon was awarded Most Valuable Player after fielding two of the four goals in the championship game. Tristan Bulandus and Julio Mazo bagged the Best Goalkeeper and Best Defender awards, respectively, while Jose Mari Javier was the recipient of the Most Goals award after scoring seven goals in the indoor football tournament.
In the battle for second runner-up, the team fielded by International Container Terminal Services Inc. (ICTSI) outclassed Manila Electric Co.’s team through an extended penalty shootout.
This is the sixth year in a row that the PSE has organized the indoor football tournament, aiming to bring together listed firms and brokers in a day-long tournament and provide an opportunity for team-building and promote camaraderie among PSE stakeholders.–Doris Dumlao-Abadilla
Central banking 101
The Bangko Sentral ng Pilipinas (BSP) plays a central role in how the Philippine economy runs. It manages the amount of money circulating in the economy, it manages the peso’s value and makes sure local banks and other financial institutions are behaved and run properly, among other things. On the side, the BSP also runs financial literacy campaigns that target primary and secondary students.
Sadly, few people understand what exactly a central bank does.
To the ordinary Juan, the BSP just prints and mints bills and notes. The term “banker of banks” may also come up for some of the more learned, but that’s as far as it goes. And central bank officials’ image suffers as a result of this disconnect. A favorite anecdote of ours is when BSP Governor Amando M. Tetangco Jr. was once asked, “You’re the governor of what province?”
When annual government salaries are published every year, many also wonder why senior central bank officials are among the highest-paid people in public service.
To remedy this, the BSP recently published its first ever Annual Report for the Layman. It’s exactly what it sounds like. Among other things, the report explains the BSP’s “new” logo (a blue eagle), the conduct of monetary policy, financial stability and the backbone of the country’s payments and settlements system.
The 27-page report can’t hope to cover all of the BSP’s functions, but it’s a good start.–Paolo Montecillo
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