Biz Buzz: ADB in the spotlight
The Asian Development Bank’s annual meeting begins tomorrow in Japan. But as its stakeholders focus on the institution’s progress in solving the region’s problems, the multilateral lender is facing some local problems of its own.
As a general rule, the ADB likes to tout the relative insulation it has vis-a-vis local laws. It is, after all, a multilateral lending agency whose officials receive de facto diplomatic status and, as such, enjoy a large degree of diplomatic immunity (along with certain coveted tax perks like tax-free importation of luxury vehicles, for example).
Anyway, this supposed immunity of the ADB and its officials are about to be tested by a legal suit.
Biz Buzz learned that a former ADB official has haled the bank to court in a civil case for “unlawful termination.”
That former official is a person by the name of Matthew Westfall. He’s very much a foreigner, but he’s also very much a local. That’s because he’s married to Laura J. Westfall. The “J” stands for Jimenez and she’s the daughter of one of GMA Network’s controlling patriarchs, Menardo Jimenez. (In fact, Laura serves on the board of the country’s second-largest television network.)
But this is about Matthew.
On March 26, 2017, a complaint for damages was filed against officers of the ADB who, as we’re told, “unceremoniously” bypassed Westfall for promotion and “fabricated allegations of ineptitude, lack of professionalism and incompetence against him to justify their choice of promotion.”
According to his lawyers, despite having full knowledge of Westfall’s credentials, the ADB officers “maliciously made inaccurate and false conclusions regarding his professional qualifications to make it appear that another candidate is more qualified.”
When Westfall took legal action, ADB terminated him.
Essentially, the complaint was anchored on these “willful acts” for which Westfall is seeking compensation. But there’s also a criminal element.
The allegedly mishandled selection process and the “highly defamatory statements” made against Westfall during the process are also the subject of a criminal case for libel and grave slander previously filed by Westfall against the same officers of ADB. The Office of the City Prosecutor of Mandaluyong dismissed the complaint on account of state immunity, but Westfall has elevated the issue to the Department of Justice where the case is pending.
In his appeal, Westfall argued that while the ADB, including its officials and staff, are generally immune from legal and judicial processes in the Philippines, the Supreme Court had occasion to rule on instances wherein ADB officials were taken out of the ambit of such immunity and sued accordingly in our courts.
Of course, ADB—which is holding its annual meeting starting tomorrow in Yokohama, Japan—is focused on helping alleviate the plight of Asia’s underprivileged. But, if Westfall’s assertions are correct, there are internal issues that need to be corrected promptly before it can go on solving the region’s development problems. —DAXIM L. LUCAS
GAA vs PPP
After unbundling the five airport projects originally meant to be bid out as one package under the public-private partnership (PPP) framework, it seems that there’s an underlying reason why this administration has decided to delay the auction anew.
From what we hear, the Duterte administration is having second thoughts about bidding out each and every airport to a private sector concessionaire. No, it’s not going back to the bundled approach. Recently, the government has sounded off the possibility of taking some of these airports out of the market and instead doing the projects itself using the national budget and perhaps some official development assistance (ODA).
There are five regional airport projects under the original PPP pipeline—Bacolod-Silay, Davao, Iloilo, Laguindingan and New Bohol (Panglao)—collectively valued at about P108 billion. Now, we heard that the government is considering to remove from the PPP pipeline the most interesting regional gateway at this time—the Davao airport.
Furthermore, we heard that the government is also considering to take the ODA route for the Clark International Airport. To recall, the government has received several unsolicited PPP proposals to modernize this international gateway, particularly from the JG Summit Holdings/Filinvest consortium and the Megawide group.
From the point of view of government, it’s always an option to use its fiscal space to do big-ticket infrastructure projects. Going through the general appropriations act (GAA) is also seen to be a cheaper route to build much-needed infrastructure. There’s also talk that the government would want to avoid legal complications (i.e. déjà vu of the battle for Mactan airport PPP) for hotly contested projects like the Clark airport and potentially the Davao airport.
On the other hand, the downside is that taking the crucial projects off the PPP table will only subject these projects to risks of bureaucratic processing and deprive the private sector of the chance to build it in a more efficient manner and employ the best and most innovative design. Instead of appropriating the plum projects for itself, many will argue that the government should uphold the PPP tack and use its funds for other public goods. —DORIS DUMLAO-ABADILLA
Latecomer, strong challenger
As many stock market investors are learning nowadays, it’s important to be able to trade when and where the opportunity presents itself.
This means bypassing the conventional buying or selling orders made to stockbrokers over the phone and instead using an online trading platform (especially if one is a retail investor who doesn’t merit or need the services of a personal stockbroker, usually reserved for large institutional funds).
Enter Abacus Securities Corp., which is celebrating its 25th anniversary this year. And what better way to celebrate a quarter of a century in business than to carry one’s operations into the future?
In fact, Abacus’ boss—Paul Soo—has laid the groundwork for an online trading platform as early as the mid-1990s, but the project got canned because of the devastating East Asian financial crisis. He chose to focus on his other investments, leaving other players (like the popular COL Financial) to take the lead in the online trading space.
But Soo’s interest in online trading has since been revived and, since last year, Abacus has been considering platform options including Technistock, the PSE’s Online Service Bureau, and well as building its own platform or outsourcing.
Ultimately, Abacus chose to outsource the creation of an online trading system, traveling all the way to Malaysia (where Soo has strong business ties) and tapping N2N Connect—a firm that has been servicing most of Kuala Lumpur Stock Exchange’s top brokers.
But is Abacus too late the become a serious player in the online trading sphere? Probably not. Less than 1 percent of Filipinos have either traditional or online accounts, well below participation rates in other emerging markets. More encouragingly, the number of online trading accounts has grown 38 percent annually over the last decade. And it’s not slowing down.
Abacus also believes that higher disposable income among Filipinos will mean greater demand for investment products and services and that many online traders are unhappy with the service they get, even from the top providers (indeed, a few weeks ago, one of the prominent platforms was offline for about a week).
Abacus insiders concede that their competitors “either have the heft or are backed by the big banks or both.” So it will be a long process, but they’re aiming for the number two spot over the medium term before they make a run for market leadership.
Enter Abacus’ online trading platform, MyTrade, which will be launched today.
Officials of the stockbrokerage say it is more reliable, being able to handle up to 5,000 concurrent users—which will be upscaled over time—without any degradation in performance. The goal is an ambitious “uptime” of 99 percent. It is designed to be faster than the competition. Side by side with other service providers, the Abacus guys say their stock ticker tape runs faster. Up to one second faster, in fact.
More interestingly, it will also offer “off-hours order entry”. Users can enter orders on weekends, early in the morning, late at night or during market recess. And these off-hour orders will be first in queue when the market opens. Nice.
And most importantly, users can access it through a mobile phone app on either iOS or Android platforms.
Will all this be enough dislodge the current market leaders? That remains to be seen. But it looks like the stockbroker wars have just entered a new era. Watch this space. —DAXIM L. LUCAS
