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A New Year Reveille

(Article published in the Jan 7, 2009 issue of Manila Standard Today)

As it is in beginning a prayer, so it is in welcoming the New Year: giving thanks is at least good form, if not a sure-fire method of storing up of a merit or two in heaven.  Hence, this start-of-the-year expression of my appreciation of those who have bothered to read me as well as of those who were bothered enough by what they had read to candidly and frontally made known their dissent.

At the top of my list is good friend Rene Saguisag.  In his The Manila Times column, T.G.I.F., of 19 January 2007, Rene took issue with my defense of an apparent misquote by Court of Appeals Justice Apolinario Bruselas which our mutual idol Sen. Jovita Salonga condemned, rather too sternly in my estimation, as a falsification  Two days earlier, I had written in this column that the grand old man of Philippine politics was less than fair when he considered as a possible falsification the good justice’s ponencia in the case of Lance Cpl. Daniel Smith vs Honorable Benjamin Pozon, et al., CA-G.R. SP 97212, promulgated Jan. 02  wherein the good justice quoted a portion of the decision of  Oliver Wendel Holmes.  I took the position that it may have been a mere typographical error on the part of Justice Bruselas’ typist that gave the impression that Bruselas was making Holmes say what he did not and that, more important, Brusellas was, despite the seeming error, really expressing the thrust of Holmes’ remark rather accurately. 

Rene took umbrage at my trivialization of Bruselas’s error and explained his reasons why.  Both sides of the matter having been sufficiently exposed in our respective columns, in addition to the fact that, to the best of my knowledge, nobody really wins any argument against Rene, I left it for our readers to decide for themselves whose view to take.
       










     

A very close second is Hon. Monico Fuentebella.  In my item of 23 July, I called attention to what I thought was the fact that, despite the lives lost when the vessel Princess of the Stars ended her voyage resting, unlady-like, bottom up, in the shores of Sibuyan Islands, the first hearing of the House Committee headed by Rep. Monico Fuentebella, ended with the owner, Sulpicio Lines, not having been asked a single question by the Committee members.  Hon. Fuentebella, in my face at the second hearing, complained, and I, after having reviewed the TSN of the first hearing, did my mea culpa on the following week, 30 July.

       Another one in my list is Fernando Jose Sison, III, several terms president of the Investment Company Association of the Philippines.  In one of my columns, I argued that the Unit Investment Trust Fund (UITF) is better left regulated, as it is now, by the BSP and not by the SEC which regulates UITF’s fellow collective investment scheme (CIS), the mutual fund.  Mr. Sison promptly expressed his dissent.  And, here is his argument in full:

“Unit investment trust funds and mutual funds both “collective investment schemes,” the main difference being UITFs are of the contractual type (e.g., constituted as a trust with its own Trustee and where the investors are unitholders) while MFs are of corporate type (i.e. , constituted as a company with its own Board of Directors and where the investors are shareholders.)

       In Europe, European Union members each have a single regulator which regulates the CIS of that country.  The EU members have come up with “Undertakings for Collective Investments in Transferable Securities” (or UCITS, pronounced “you-sits”) starting in 1985 (UCITS I) up to 2001 (UCITS III).  UCITS are a set of uniform regulations that aim to allow CIS to operate freely throughout the EU on the basis of a single authorization from one member state.

      In the U.S., which boasts of the world’s largest investment funds industry (US$ 9.3 Trillion in net assets as of June 30, 2006), both UITs and MFs are regulated by the SEC.

     In our part of the world (Asia-Oceania), one regulator regulates the unit trusts and investment companies in Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Pakistan, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam.  In this listing, the Philippines is among the smallest in funds volume, coming in 3rd after Bangladesh and Vietnam.

     While most countries in Asia-Oceania have their SEC as the regulator, other countries have established a single regulatory body which is not the SEC.  These countries are Japan (Financial Services Agency), Korea (Financial Supervisory Commission), and Taiwan (Financial Supervisory Commission).  In contrast, the Philippines has three regulators – the BSP for UITFs (contractual structure), the SEC for mutual funds (corporate structure), and the Insurance Commission for unit-linked insurance funds (contractual structure).

     The Philippines is headed in the direction of best global practices and standards if it adopts functional regulation of the investment fund industry under one regulator, the way other developing countries as well as developed countries have recently done.  For instance, it was only in 2003 that Korea passed a single law and adopted a single regulator to govern their unit trusts, investment companies, and unit-linked assurance schemes which had heretofore been covered by different laws.  As has been demonstrated in other countries, the undersigned believes that capital markets development and investor protection are better served under a single regulator of the funds industry.”

     Saguisag, Fuentebella, and Sison expressed their dissents in different ways: Saguisag allowed his idea to compete in the market place; Fuentebella expressed his sentiments in the course of the performance of his public functions; and Sison directed his comments right at my inbox.  What is commonly admirable with these gentlemen is that they said what they did say frontally, out in the open, for me to see and hear and react to, as I saw fit.

     That is exactly how I would want anyone who disagrees with me or disapproves of what I say or seem to say to respond. In my face and not behind my back.  Straight at me and not circuitously.

     In the school grounds of Lakan Dula Elementary School, we have an epithet for those who complain to other parties who have nothing to do with the real or imagined offense.  We brand such complainer, who belly aches behind our backs, with a rhyming couplet delivered in crisp Tagalog asserting that he or she had a   protruding posterior.

     I ask you, if you are offended by my column or in anyway are not happy with I have written, to go ahead and say it to my face.  Disagree and criticize me frontally, and, if you must, feel free to be most disagreeable and condemnatory in doing so.  But, please, do not rat, for ratting is only for rats, innit?  Thanks, and have a Happy New Year.
 

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