A quick look at what the Boy Scouts lost on the Alphaland joint venture

Makati_Place_Towers_01

Makati Place Towers

Thanks to commenter parengtony at Raissa Robles’ top blog for the suggestion that we look at the Alphaland-Boy Scouts of the Philippines (BSP) joint venture in Makati from a financial standpoint to put some order to things. I’d like to do a quick and rough sizing of the deal. Let’s look at:

  1. The history of the project through the eyes of former Makati Vice Mayor Ernie Mercado.
  2. The response of BSP and Alphaland executives to Mercado’s claims.
  3. Overview of the project now under development, called “Alphaland Makati Place”.
  4. Assessment of what the project might have been worth to BSP if different decisions had been taken.
  5. A concluding evaluation of the situation.

The property in question is a one-hectare development, mixed commercial and residential usage, on prestigious Ayala Avenue in Makati.

The history of the project as presented by former Makati Vice Mayor Ernie Mercado

These are the details outlined by Mercado in his January 22, 2015, testimony to the Senate Blue Ribbon Sub-committee with a few elaborations to explain the deal. Three “Alternatives” are also highlighted in red [JoeAm’s work, not Mercado’s] that illustrate how BSP could hypothetically have made different decisions along the timeline to gain more from their interest in the property:

  • 1975: BF Goodrich (now Sime Darby) donated the Makati property to BSP, keeping exclusive leasehold rights for 25 years.
  • 2000: Sime Darby sought a 25 year extension on the leaseback. BSP objected, took the matter to court and won the case and full use of the land. (It appears that Sime Darby continued to contest the matter. Joe)
  • July 2005: Mayor Binay negotiated a settlement agreement with Sime Darby. BSP got 60% of the land and Sime Darby got 40%. The property was independently appraised as an industrial property at P1 billion at that time. The BSP share was worth P600 million . . . as an industrial property. [Alternative #1. BSP holds firm and keeps 100 percent of the project, then heads development.]
  • 2007: BSP and Alphaland opened negotiations for joint venture development of the property. Alphaland had acquired the 40% interest held by Sime Darby in a separate transaction (purchase of Sime Darby’s Silverton Property Development Corp).
  • 2008: A joint venture agreement was established between BSP and Alphaland. Alphaland would fund, develop and manage the property. BSP would get 15% interest and Alphaland 85% interest in the completed project. Mercado had argued that 20% was the norm in such cases but was informed by Binay Attorney Limlinigan that 5% had been allocated to Binay. [Alternative #2: BSP gets 20%.]
    • The project was estimated to cost P4 billion, giving BSP a P600 million interest. It is easy to confuse this with the P600 million land appraisal, but they are different. The interest in the partnership merely expressed the obligation for funding that each party held, and the share each would hold at completion.
    • However, VP Binay did extract his share at that time to fund his election campaign. Alpha President Oreta told Mercado that Binay would get his share through one of Alphaland’s subsidiaries, Noble Care Management Corp. Alphaland gave Noble Care shares of stock worth P89 million plus a loan, later forgiven, of P100 million. This money – P188 million in all – went to Binay to help fund his 2010 election campaign. Mercado says.
  • Around 2009/2010: The property was converted from industrial to commercial mixed use, allowing eight story residential/commercial buildings.
  • 2010: Alphaland used the property as collateral for a loan to fund construction of the property. The loan amount of P 1.7 billion was provided by Development Bank of the Philippines.
  • 2011: BSP sold it’s share of the land to Alphaland for the 2005 appraisal amount of P600 million. The P600 million was left with Alphaland to help fund construction. BSP retained its 15% share of the finished project as per the 2008 joint venture agreement.
    • Mercado sharply criticized the low selling price of P600 million during the Senate hearing.
    • A 15% revenue allocation was determined by assigning parts of the project to BSP. Allocation to BSP originally included the convention center on the third floor of the Podium and a portion of towers one and two. Alphaland changed this in 2013 to a part of tower three and the BSP convention center at the Podium. (How the 15% calculation was made based on share of total floor space, and various usages, is unknown. Presumably BSP signed off on the calculation. Joe)
    • The 600 million land purchase amount has not yet been paid to BSP as the project is not yet complete, and it ostensibly represents BSP’s share of construction funding.
    • BSP has been receiving P530,000 per month from Alphaland as lease payment for Alphaland’s showroom which is on BSP’s part of the property. Start and stop dates are unknown.
    • During this time, the project was upgraded by the City of Makati to allow 12 story buildings.
    • [Alternative #3: The upgrade to commercial would double the value of the property, and the additional upgrade to 12 floors would mean additional value. BSP holds out for a land sales price of P1.5 billion and 35% interest in the final project. BSP agrees to fund 1.4 billion of construction cost and takes P100 million into cash.]

Construction on the project broke ground in 2010. It is scheduled for completion in the third quarter of 2015.

Side note: The Philippine Stock Exchange initiated a delisting process on Alphaland in March 2014 for “repeated failure to submit full, fair, accurate and timely disclosures of material information.”

The response of Alphaland and Boy Scouts to Mercado’s claims

BSP senior vice president and acting secretary general Atty. Wendell Avisado has said the real estate transaction was “legal and above board”. He criticized Mercado for impugning the integrity of the Boy Scouts.

Alphaland’s President Mario Oreta sent a letter to Mercado in early January of 2015 warning him that he would face legal action if he included the Alphaland/BSP matter in his publicity campaign against Vice President Binay. Two paragraphs from the letter indicate the values involved.

Before entering into the transaction with the Boy Scouts of the Philippines in 2008, there was an appraisal by an independent appraisal company, which valued the property at P1 billion. Obviously, Sime Darby which owned 40% of the property had their own appraisal made, and it was on this basis that Sime Darby readily agreed to sell the 40-percent ownership to Alphaland for P400 million. Thus, when the Boy Scouts contributed its 60% ownership to the project, it was valued on the same basis as the appraisal and selling price of Sime Darby to Alphaland, i.e. P600 million, thus earning it a fully carried interest of 15% of the project which was estimated to cost P4 billion, all of which would be paid for by Alphaland.

Finally, I emphasized to you that the project which is now close to completion (third quarter of this year), would have a market value of over P21 billion.  Thus, the original contribution of the Boy Scouts for its 15% of the project would be worth more than P3 billion or more than five times its original investment value thus, making it undoubtedly one of the best and most successful investments that the Boy Scouts ever made.

Oreta’s argument is essentially that BSA should be very excited that its interest in the development is worth more than P3 billion. No one in their right mind would object to that and Alphaland will sue anybody who does object.

Overview of the project called Alphaland Makati Place

Direct from Alphaland’s 2012 SEC filing:

Alphaland Makati Place will consist of three high-end residential towers atop an upscale six-storey podium with a shopping center and a City Club dedicated to urban sports and leisure. Alphaland Makati Place will rise on a premium one hectare property along Ayala Avenue Extension corner Malugay Street, Makati City. Featuring truly “smart homes”, the Alphaland Makati Place will be the first in the country with built-in concierge technology that will enable its residents and tenants to achieve lifestyle objectives on demand.

Comprising of almost 1.6 hectares of sports and leisure facilities, The City Club at Alphaland Makati Place, Inc. will fulfill the wellness, social, sports and business needs of its members. Facilities will include a spa, aerobics, dance and yoga rooms, formal and casual restaurants, cafes, a sports bar, children’s activity center, coffee lounges, indoor tennis courts, indoor badminton courts, lap pool and children’s pool, private business meeting rooms, and a business center.

Secondary sales of the City Club preferred shares started as early as December 2010 at an initial price of P=0.5 million per share. A total of 359 shares have been sold as of June 30, 2012.

Note the lucrative enrollment fee for the City Club, representing about P180 million pesos even at that early stage.

A link to the 2102 document is included in the “Sources” at the end of this article. It is rather interesting reading, in a technical way.

What the project could have been worth to the Boy Scouts

We can’t recast the past and, at this cursory stage, can’t know the precise negotiating positions of Alphaland or BSP. But we can make some assumptions and go from there.

  • Assumption #1: The property will be worth P21 billion when it is completed.
  • Assumption #2: The President (Binay) and Board of BSP have a fiduciary responsibility to act in the best interest of the BSP.

So let’s look at four hypothetical scenarios that allow us to calculate whether the President and Board of BSP made proper decisions. One will be the actual valuation, and the other three will be the alternatives highlighted in the historical review.

  • Actual valuation: P600 land sales price million plus 15% interest in the total development when it is completed, which would be an asset worth P3.15 billion. Total P3.75 billion.
  • Alternative #1, BSP wins 100% ownership from BF Goodrich in court and develops the property: Upper end valuation is P21 billion. The counter arguments are that BSP is not a developer and could not realize that value, and that court case could take years. The point is, however, as an aggressive 100% owner, the upside would be tremendous. A real estate pro would have made this point clear to BSP executives in 2000. “You waited 25 years to get this donation free and clear, and just look at Makati today. Your holding is worth billions if it is developed out.”
  • Alternative #2, BSP gets 20% interest in development instead of 15%: Land sales price is P600 million and share of developed project is P4.2 billion. Total valuation P4.8 billion. Note, BSP did not just lose P200 million, it lost the leverage multiple of 200 million at end of construction, or about P1 billion. My how huge that 5% decision was.
  • Alternative #3, BSP recognizes the commercial value of the property is multiples of the original industrial valuation : BSP gets a land sales price of P1.5 billion and share of the developed project, helps fund it, and claims 35% of thje finished project, or P7.35 billion. Total valuation P8.85 billion.

Now in a corporation, this kind of assessment would go past the finance department (where they might do their tricks with present valuing and other refinements), the real estate department, and the law department. But you get it raw, and should treat it accordingly: a rough sizing of what BSP got, versus what it might have received.

A concluding assessment of the situation

The negotiation may be legal in terms of documentation and process, but one would have to seriously question whether VP Binay and the BSP Board properly executed their fiduciary responsibilities. How did BSP go from being a potential 100% owner of the property to holding only 15% of the finished product? Why did BSP accept a low sales price on the land that did not reflect upgrade of the property to commercial or a six year time passage from the 2005 appraisal to actual sale?

Alphaland benefited from acquisition of BSP’s land “dirt cheap”, from upgrades in the property from industrial to commercial, and from the leveraging effect of development. Alphaland’s starting joint venture interest went from P3.4 billion to its projected completion-date amount of P17.25 billion. BSP’s went from P0.6 billion to P3.75 billion. Yet BSP started as the dominant land-owner. (The total project increased in value from P4 billion to P21 billion.)

What WERE those Alphaland/Noble Care transactions about? Why was the loan forgiven? What happened to the money? Perhaps this is a matter for the Anti Money Laundering Council to explore.

The Blue Ribbon Subcommittee is correct to subpoena the BSP Board to gain their views on the transaction. They should focus on members there since 2005.

The Alphaland argument that BSP (or, rather, Mercado) should be happy with P3.75 billion as the most lucrative deal ever done by BSP is completely irrelevant. Getting paid P500,000 might be nice, but not if it is for a car worth P1.5 million. No wonder the firm was booted from the PSE , given that kind of candor. What were the proper valuations at different stages of the prospective development? Every decision seemed to penalize BSP in favor of Alphaland. The BSP land sales price was grossly undervalued.

Was any other money transferred to interested parties (Binay, Mercado, executives or Board members)? Campaign donations? The deal-making was so loose as to challenge credibility of the BSP claim that it was “legal and above board”. Fiduciary responsibility is a legal requirement.

The mind for sure boggles that the BSP executives and Board accepted a P600 million land sales price and 15% interest in the development as the best they could do for the Boy Scouts of the Philippines.

Sources

http://newsinfo.inquirer.net/667290/binay-used-boy-scout-land-deal-to-fund-2010-poll-campaign-mercado

http://www.gmanetwork.com/news/story/384359/economy/companies/pse-removes-alphaland-from-roster

http://www.gmanetwork.com/news/story/414148/news/nation/boy-scouts-no-anomaly-in-property-deal-with-alphaland

http://www.philstar.com/headlines/2015/01/23/1415784/vice-president-got-p188.9-m-kickback-boy-scouts-philippines

http://www.interaksyon.com/article/103575/senate-binay-telenovela–mercado-claims-vp-earned-from-bsp-deal-alphaland-poises-libel-suit

http://www.abs-cbnnews.com/video/nation/01/23/15/mercado-why-sell-bsp-property-only-p600m

http://www.alphaland.com.ph/fileadmin/user_upload/alphaland/investors/Quarterly_Reports/2012/SEC_17-Q_Form_-_June_30__2012.pdf

Comments
60 Responses to “A quick look at what the Boy Scouts lost on the Alphaland joint venture”
    • Joe America says:

      Thank you, raissa. If I can simplify the parsing of the deal, there are two main fiduciary questions: (1) BSP accepting a 15% share of the project versus 20%, and (2) selling the land for only P600 million. Those would only be corruption if the executives and Board members knew there were outside, ulterior reasons for the valuations, or if people other than Binay gained from the deal. The outright corruption issue is: (1) that Binay allegedly got money through an Alphaland subsidiary via a forgiven loan and stock transfer. I wonder if the SEC has an investigative arm that could explore that.

      Two fiduciary issues, one corruption.

  1. andrewlim8 says:

    Let’s get this to the Blue Ribbon Committee.

    • chit navarro says:

      yes, I’ve posted it in the FB pages of Sen. Cayetano, Trillanes & Koko Pimentel.

      The only thing is, Joe have used BSA instead of BSP more than a couple of times. Perhaps you were thinking of the President? 🙂 🙂 🙂

  2. edgar lores says:

    *******
    1. Shenanigans.

    2. What strikes me is that this is just one BSP deal. How many more are there?

    3. And how many more with the other agencies that Binay heads or is a member of?
    *****

    • Joe America says:

      2) There are multiple suspicious dealings. Each is a story in its own right and all lead to the same general conclusion. Mr. Binay inserts self-interest ahead of the boy scouts. Which reminds me, I was going to look at who is on the Board. I can’t believe upstanding people would agree to these shenanigans.

      • Joe America says:

        The Boy Scouts web site is not operational. An article in Rappler identifies the composition of the Executive Board, which, from all appearances, would be uninformed and gullible people willing to follow the direction of the President on technical matters such as investments and joint ventures:

        From Rappler

        The National Executive Board, on the other hand, consists of:

        A charter member of the BSP who shall be elected by the members of the National Council

        Regional chairmen of the scouts regions who shall be elected by the representatives of all the local scouts councils of the region

        The Secretary of Education

        The National President of the Girl Scouts of the Philippines

        A senior scout each from Luzon, Visayas and Mindanao, to be elected by the senior scout delegates of the local scout councils to the scout youth forums in their respective areas

        12 regular members to be elected by the members of the National Council

        10 to 15 additional members from the private sector who shall be elected by the members of the National Executive Board

        http://www.rappler.com/newsbreak/iq/81614-fast-facts-boy-scouts-philippines-bsp

    • Mariano Renato Pacifico says:

      On #3, how many incompetent board members are there under Binay who turned a “blind eye”?

  3. Bert says:

    My, my, the cat’s out of the bag. The Binay Gang will never appear in the Senate Blue Ribbon probe even if their lives depend on it. Clear as crystal.

    I just hope that the crusading Senators in the Blue Ribbon will continue to have their balls until the 2016 presidential election and beyond.

    • Joe America says:

      I wish Guingona would get pissed off and go on a royal rant and jail the Mayor. Somebody needs to stand up to this horrid sense of entitlement, of being above the processes of State.

      • Bert says:

        My guess is that the Mayor will appear but will do a Napoles, invoking his right to remain silent.

        A non-appearance by the Mayor however will leave Guingona no choice but to arrest and jail him or risk becoming irrelevant, at worse, a joke.

        What could be more interesting will be the testimonies of the other member of the Binay Gang if they could be persuaded to come to the Senate probe. I’m holding my breath.

  4. hiddendragon says:

    Good day, Joe Am!
    A morning is always right when my Inbox signals a new posting from you.
    Just a possible error in your pic. Those 3 towers are of The Columns Ayala.
    Alphaland would be the one on the upper left, still empty in the pic, but now has a bunch of shops, with the flagship tenant (health club) opening soon or already opened.
    Now, do I read your article now, or should I get back to work? Decisions, decisions.

  5. bauwow says:

    Uncle Joe, is “raissa”, the great investigative journalist raissa robles? Wow!

      • Bans Godoy says:

        Binay corruption strategy is only a small tip of the corruption icebergs. Even combining Marcos/Estrada/Arroyo/Napoles/Enrile/Jinggoy/Revilla/Binay corruptions are still part of the small tip of the government officers corruptions standard operating procedures SOP, in all level of government services. President Noynoy Aquino or any president has no power to change it under the current government democratic system. Investigation after investigation efforts is not a potent force to stop or change.

        Only a righteous authoritarian like Lee Kwan Yeo or Deng Xiàoping has done it and changed the nation. Marcos/Imelda was not successful, even Cory/Ramos/Noynoy was not successful either.

        Many Filipino leaders are brilliant intellectuals comparable to Asians, same with the middle class Filipinos, the senators and congress elites, the filipino professionals and technocrates. Once they enters the public service, Bingo! The brilliant intellect is used for corruption effort. Sayang na Sayang Ang Gagaling! Sorry for the negative opinion.

        Here are some proof: substandard Philippine international airport, substandard national and provincial roads, substandard rail train and metrolinks, 12% professional brain drains,
        Land reform failed, import Thailand rice and other countries while IRRI is Laguna. Rule of law implementation Palakasan Lang, and on and on.

        Ask Moses to come! Let us cry louder for the suffering of the Filipino people?

        • Joe America says:

          Yes, tip of the corruption iceberg. And this “tip o’ the berg” is running for president. Brilliance turns to nonsense when self interests redirects work to something other than what is best for the people. That, in a nutshell, is what is going on. The DOTC decision on the LRT/MRT common station, splitting one station into four terminals and requiring riders to hike down a long tunnel to make their connection . . . all in favor of the Ayalas . . . leaves me incredulous.

          DOTC Sec. Ayala graduated number two in academics as the US Naval academy, but he can’t see the nonsense?

          • Bans Godoy says:

            Tumpak! Brilliance turns to nonsense! Shame!, Shame!

          • karl garcia says:

            One of the reason I have not been using facebook for years are my reckless posts like linking boo chanco articles to sec jun abaya and some more. like that was I thinking of moment ,like was I rubbing it in or what. Another incident was when congressman Roilo Golez told me that I spelled his name wrong so I said ok better stop everything.social media and blogging was not for me.

            • Joe America says:

              Well, here we call that stylin’! When we make mistakes or create embarrassing moments, we call it teasing. “Just kiddin'” is our motto, or “just sayin'”. That’s why one of the rules somewhere in the tabs up above that set forth our principles and rules is the statement, “Don’t take anything we say seriously.”

              Seriously.

              • Karl garcia says:

                Thats why i found my home here. Sorry for being serious at times, i try to compensate by joking. Whats left is the balancing, timing etc.

              • Karl garcia says:

                Lesson here. People want to be tajen seriously until they find out some are really serious and they are times that they do take you seriously because they know where you live.

              • Joe America says:

                It drives hypernationalists nuts when I have opinions, especially if they disagree. Hey, it’s my country every way but the paperwork.

              • karl garcia says:

                I was out of control there.It was misplaced and very improper. Will you accept my apology Joe?

        • Mariano Renato Pacifico says:

          Why so-called “brilliant intellectuals” “comparable to Asians” turn to thievery? I’ve been asking that question. Why? Who trained them? Why shenanigans and crookery are graduates from two elite schools while the other one has almost clear monopoly.

  6. edgar lores says:

    *******
    BINAY OCTOPI

    1. Binay and his family have been characterized as anays (termites) but there is a case to be made that they are more pugitas (octopi). Allow me to put the case before you.

    2. The octopus has no backbone and is able to squeeze through tight places. And Binay is known for not taking a firm stand on controversial issues – not on the Corona impeachment, not on the RH Bill, and not on the burial of Marcos at the Libingan ng mga Bayani.

    2.1. Octopi have many ways of defending themselves. And Binay as how many spokesmen?

    2.2. Octopi have superb camouflage. You all have seen the Vice President in a soldier’s uniform, a Boy Scout uniform — isn’t he cute? — a Maranao costume, and bright-colored t-shirts, jackets and vests.

    2.3. Their primary defense mechanism is to hide. And Jojo has hidden his hacienda, his mistress, his wealth… and his accomplices. Where are Gerry Limlangan, Ebeng Baloloy, Laureano Gregorio, Mitzi Sedillo and Bernadette Portallano?

    2.4. Another mechanism is to expel ink. Have you noticed that comments in social media nowadays are disturbingly half pro-Binay?

    2.5. Octopi can perform autotomy, the ability to lose a tentacle. Jejomar deliberately lost his right-arm man, Mercado, in favour of his son, Junjun, to maintain dominion over Makati.

    2.5.1. It is known that detached tentacles remain sensitive and tend to avoid unpleasant stimuli. Mercado is such a sensitive tentacle… despite his insensitive looks.

    2.6. All octopi are venomous. And do not Jejomar, Junjun and Nancy speak with venom in their hearts and with their beaks, which is made of chitin (cheating)?

    2.7. An octopus has 8 arms. This I am not sure about. Jojo seems to have more, grasping position, loot, land, houses, condos, dollars, stocks, furniture, paintings, sculptures, relics, an opium bed, ceiling fans – that’s a baker’s dozen — and many more. And those suckers… hoo boy, they sure can suck.

    2.8. Octopi have 3 hearts and so do the Binays. I believe one is for love of family, the second for love of money, and the third for love of power.

    2.9. Finally, octopi are wily creatures. And Jojo has been able to fool the people for a long, long time… and continues to do so.

    3. “Binay octopi” has a certain ring to it… the blue-ringed octopus which is the only kind that is deadly to humans, and certainly to Filipinos.

    4. What about you? What is your favorite zoological metaphor?
    *****

    • Joe America says:

      Anay, eating away at the fabric of the Philippines. But octopus is great, too For sure they are skilled at working in ink. Rat is simple, clear. Rat’s nest is where the family dines. Snake works for me, slithering here and there, rising up to threaten anyone who gets close. Spitting cobra perhaps. Cockroach is not aggressive enough. Spiders could conjure up some nice descriptions, webs of lies and deceits. Black widow is the old lady who almost devoured the old man when he was discovered to be having an affair. She was given a hacienda to appease her. Oh, my . . . . You have gotten me a bit worked up here . . .

    • Buwitre for feasting on the dead dignity of the Filipino masa. A red bellied piranha (identified as the flesh-eating, omnivorous piranha species) for the ravenous and insatiable appetite for pesos and power.

  7. Juana Pilipinas says:

    “Note the lucrative enrollment fee for the City Club, representing about P180 million pesos even at that early stage.”

    Why does this stick in my craw? I am wondering if a Boy Scouts Jamboree will ever be held in this fine establishment?

    I am also wondering about the members of City Club. Is Gerry Limlingan, Antonio Tiu, et al in the membership list?

    Looks like the BSP administration has a lot of explaining to do to COA:

    http://www.coa.gov.ph/index.php/gov-t-owned-and-or-controlled-corp-goccs/2012/category/1345-boy-scouts-of-the-philippines

    • Joe America says:

      I think the Executive Board is absolutely absent of any executive clout (see list of members in response to Edgar, above). They would have no idea how to read a joint venture agreement or understand the values, and I can’t imagine any of them having the courage to challenge Binay. This is classic culture of impunity working ground. Power and submissive . . .

  8. Bing Garcia says:

    Fiduciary responsibility is a legal requirement.

    • Joe America says:

      Yes, I should not have labeled the two points as “assumptions” but as starting points for the discussion. Fiduciary responsibility is a legal requirement, and if decisions cost the Boy Scouts a billion pesos or more (as the decision to accept 15% interest in the project did), is that not a blatant failing of fiduciary responsibility? Especially when a Senior Vice President of the organization has pointed out that 20% is the common share in such circumstances?

  9. karl garcia says:

    the only defense of the binay family through Abigail is. THIS Is A PLOT plain and simple.just because daddy declared presidency very early.
    yun naman pala e nagdeclara kasi siya agad, bakit para maka kampanya ng maaga?btw what is the comelec doing about the premature campaigning still going on.

  10. karl garcia says:

    Paging Mara of senator Trillanes office. This is my first time to do this ,but please make this reach the senator.

  11. Bans Godoy says:

    Binay corruption strategy is only a small tip of the corruption icebergs. Even combining Marcos/Estrada/Arroyo/Napoles/Enrile/Jinggoy/Revilla/Binay corruptions are still part of the small tip of the government officers corruptions standard operating procedures SOP, in all level of government services. President Noynoy Aquino or any president has no power to change it under the current government democratic system. Investigation after investigation efforts is not a potent force to stop or change.

    Only a righteous authoritarian like Lee Kwan Yeo or Deng Xiàoping has done it and changed the nation. Marcos/Imelda was not successful, even Cory/Ramos/Noynoy was not successful either.

    Many Filipino leaders are brilliant intellectuals comparable to Asians, same with the middle class Filipinos, the senators and congress elites, the filipino professionals and technocrates. Once they enters the public service, Bingo! The brilliant intellect is used for corruption effort. Sayang na Sayang Ang Gagaling! Sorry for the negative opinion.

    Here are some proof: substandard Philippine international airport, substandard national and provincial roads, substandard rail train and metrolinks, 12% professional brain drains,
    Land reform failed, import Thailand rice and other countries while IRRI is Laguna. Rule of law implementation Palakasan Lang, and on and on.

    Ask Moses to come! Let us cry louder for the suffering of the Filipino people?

  12. josephivo says:

    This feels as a “search for the 10 mistakes” deal. (not in order of importance)

    1. Clear illustration of how a “rent” economy works. Windfall profits from “political” decisions as changing zoning requirements, providing infrastructure on public expense, not paying for consequences as pollution and increase in traffic density… In comparison minor gains for creativity, efficient construction, customer orientation…

    2. Total disregard for the scope / mission of an organization. What has scouting to do with the real estate business??? As in Church and politics, politicians and personal gains….

    3. Scouting as a youth movement. What the hell are people in their 70ies doing there unless they are pedophiles? Why rob adolescents and young adults of their responsibility, learning opportunities, fun… ???

    4. Oats and principles are just for formal display, as a dance or a birthday song, the content is irrelevant.

    5. Politicians in none political activities. What mandates politicians can have? How can they edit “neutral” laws if they are deeply involved in the consequences of these laws?

    6. Urban planning and the wellness of a community is irrelevant when a profit can be made. Add density, reduce public space, add pollution…

    7. Deals have to be made in back rooms. Transparency kills joy

    8. Corruption doesn’t need any explanation

    9. Omerta. Keep your mouth shut or else… ask the Makati city engineer.

    10. Why should people care, we can’t change anyhow. Just let this Americano just sing his song.

    • Joe America says:

      Let me elaborate on #2. Scouts to me are like a church or private school or near-charity in that they focus on good values and good deeds and need contributions to succeed. But the Boy Scout organization seems loosey goosey, no web site, involvement of the President on the big donations or projects, as his little feudal realm. Is there a fund-raising or financial unit? Would they not seek to maximize the return on a donation such as this property, rather than grovel about for new donations? Why not pick up a billion or two. The property sat vacant for 25 years. If they had any kind of executive function at all, they would have taken the initiative to get a developer to caretake the asset placed in their trust. Yes, their PURPOSE is to instill character in youth, but their MEANS is to raise money, and they ought to be skilled at both.

      I think it is an organization without leadership, frankly. The locals do their thing, but the national is running wild. If this is an example of Binay’s talent at running things, oh horror of horrors, to be so slap dash ugly in going about it.

    • Bert says:

      9. Yes, Omerta…condolence to the family of the Makati City engineer. And to the families of some other bodies out there yet to be discovered. This is gross.

  13. karl garcia says:

    I tried to do that 0merta thing, it did not work. I’m too talkative.

  14. Mariano Renato Pacifico says:

    JoeAm should take over the regulatory body of Philippine Press. JoeAm consolidated all the factoids together into one coherent whole. JoeAm is not even graduate of University of the Philippines. TAKE THAT RAPPLER. All Rappler does is publish documents that I CANNOT EVEN UNDERSTAND and they expect me to make my own analysis. Fortunately, we have non-U.P. graduate in the name of JoeAm that brings clarity to the whole mess.

    If I cannot understand the documents published and streamed on-line, I wonder who does?

    What is missing in Joe’s article is WHO ARE THE BSP BOARD MEMBER? What does Chief Scout do? Is Chief Scout automatic member of the BOARD? Why is the name of Chief Scout deleted from Wikipedia? Who deleted it? Why? On whose order?

      • karl garcia says:

        if the contents of that url will be deleted afterwards then there is really someone mad.

        • karl garcia says:

          Chief Scouts, Boy Scouts of the Philippines 1-Joseph Emile Hamilton Stevenot. 2-Jorge Bartolomé Vargas. 3-Arsenio Nicasio Luz. 4-Manuél Roxas Camus. 5-Jorge Bartolomé Vargas. 6-Gabriél A. Daza. 7-Vitaliano Bernardino. 8-Ferdinand Edralín Marcos. 9-Maria Corazón Sumulong Cojuangco Aquino. 10-Fidél Valdéz Ramos. 11-Joseph Estrada. 12-Maria Gloria Macaraég Macapagál Arroyo. 13-Benigno Simeón Cojuangco Aquino.

          http://en.wikipedia.org/wiki/Boy_Scouts_of_the_Philippines (a few seconds ago)

          nadinig ka siguro.

          • Mariano Renato Pacifico says:

            Benigno Aquino was prominently in the roster on the right hand boxed frame. Now he is gone !!!! Compare it with your archived link. Spot the difference.

            • karl garcia says:

              I believe you. I did that yesterday or two days ago when you said it (wikipedia deleting)in the previous post.

              • Mariano Renato Pacifico says:

                AHA! HA! HA! Some operative deleted it after the Boy Scout scam came out. My point is Binay should not be the only one investigated it should include the Chief Scout who, unfortunately, happens to be the president of the Republic of the Philippines and the BOARD who also belongs to the rich, powerful and well-connected.

              • karl garcia says:

                does Oliver Lozano follow you in twitter?

              • karl garcia says:

                if the subpoena of mayor binay worked notwithstanding committee attendance I dont see any reason for the bsp board to snub, they must make sure they wont send the subpoena to the banko sentral ng pilipinas

      • Mariano Renato Pacifico says:

        OLE` KARL !!! Now you see it, NOW WE DO NOT !!!

    • Joe America says:

      Binay believes in transparency, which is why there is no Boy Scout web site, and if that makes no sense it is because there is a gross difference between what he says and what he does, and computers leave trails. We can’t identify the Board Members without going to BSP headquarters, it seems. We can identify them by position (see my comment to Edgar earlier). Yes, they are likely incompetent at executive functions.

      I graduated from Colorado State University, which is an agricultural school, and the University of Southern California, which is like UP on steroids, where any rich Arab can buy a degree and Hollywood lala land is just up the Freeway a little way. Eclectic rules.

      • Mariano Renato Pacifico says:

        Joe, there is a difference graduating from Agricultural schools in America and in the Philippines. In the Philippines evidences are planted and grow on trees.

      • Yvonne says:

        Joe,

        I can identify the complete list of names of the Board Members of BSP and their salaries. It is a long list and unfortunately I cannot “copy and paste” because the document is protected. Maybe I ought to write a separate blog for that that will include their names. Interestingly enough, Junjun Binay is now a member of the board – maybe he is doing an OJT to be its next president when the older Binay is finally removed from BSP.

        BTW, the link to this topic that you put on the “Notes from the Editor” does not seem to work. So I have to google it to get to this blog topic.

        • Joe America says:

          Very good, yvonne. I looked up the board when I did the article but it was so huge I did not include it. Mostly they are regional people and “non-professional” scout volunteers who would, I think, basically do what VP Binay suggested. Who’d dare oppose him, after all?

          I can’t get actual links into the right column except with a lot of work. I figure people will copy/paste to the browser, or search as you did.

  15. Joe America says:

    The following comment provides corrections and refinements to the calculations made in the blog article. I thank caliphman at Raissa Robles’ blog for the fine tuning:

    “Joe,
    I looked at the work you did in analyzing the Alphaland/BSP agreement. There is no reason for me to re-invent your ‘ wheel’. However you might want to consider making the following corrections. In your alternative 1, the value of BSP developing the property by its own should net the 5 billion cost of construction from gross profits, leaving 16 billion before selling expenses. In alternative 2, you might be shortchanging the BSP because selling the land was not part of the agreement. The 20% is standard when the landowner keeps the land but allows construction on it (Tiu, usufruct, Hacienda Binay..remember?). If BSP throws in ownership of the land then, then it becomes your alternative 3. So alternative 2 may need some adjusting so it reflects keeping the land which will have a commercial value of 1.5 billion. However the pavilions and condos can only be leased because Alphaland cannot sell unless they own the land. A good assumption to use is annual lease income of 5% of what the saleable value of the condos, pavilions, and parking space.

    I will leave you to do any necessary arithmetic but otherwise I have no other suggestions for now. Let me know if you need a hand.”

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  1. […] The alleged billionaire backer of the coup was not wheezing, he was fuming because his Alphaland investment tanked when former Makati Vice Mayor Mercado revealed it was another Binay scam using the Boy Scouts to fund his 2010 election (“A quick look at what the Boy Scouts lost on the Alphaland joint venture”) […]



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