My Reply to the an article in the Today Newspaper Feb. 21, 2005

We write in response to the article published in yesterday’s issue of TODAY. The article was unfair and misleading. It did not constitute balanced reporting as the side of Treasurer Norma L. Lasala was not sought. It was written with an obvious slant in favor of the Bangko Sentral and an attempt to denigrate the character of Treasurer Lasala. Please consider the following:

It was reported that the so-called THIRD PARTY CUSTODIANSHIP plan as designed under circular no. 392 and 428 would prevent the recurrence of double selling of securities like that of the BanCap scam. This is not correct!

The Bancap scam occurred in 1994 when government securities were still evidenced by certificates. In 1996, due to the reforms introduced by the Department of Finance and the Bureau of the Treasury (Bureau), government securities have become paperless or what is known as “scripless” through the adoption of advanced computer technology which allows transactions to be recorded at the very moment they take place. Moreover, the holdings of each investor is recorded individually under his account name; thus “double selling” of his shares like that of the Bancap scam can no longer happen.

The article also insidiously remarked that Treasurer Lasala has maintained a stand against the Third Party Custodianship because her view has been colored by her relationship with the banks. This is FALSE!

The reason why Treasurer Lasala has consistently opposed the third party custodianship is because the same is NOT EFFICIENT and is COSTLY. It adds another layer to an already simplified securities transaction at an added cost to the investing public. These are unnecessary costs because transactions can be completed without them! These costs will discourage investors from investing in government securities. It can also translate in added costs to be borne by the government and ultimately by the Filipino people in the form of higher cost of borrowings. These will add to the nation’s fiscal crisis. Treasurer Lasala’s objective and that of the Bureau is to fund the requirements of the Republic at the most efficient and most economical means.

What the article DOES NOT SAY is that the Third Party Custodianship plan, if implemented will give the custodians access to the computer system of the Bureau once it is compelled to connect its computers to them. Computer data will now be parceled out to different custodians. What was once a whole system capable of producing vital information in the nick of time now becomes fragmented and information becomes unavailable or available only after a tedious process of reconciliation. The timeliness, and consequently, the reliability of debt data will be compromised. This data is VITAL TO THE NATION and any doubt cast upon it can IMPERIL THE GOVERNMENT’S ABILITY TO FUND ITS REQUIREMENTS.

What the article ALSO DOES NOT SAY is that the Third Party Custodianship is NOT a genuine market reform! The additional costs will limit the market to the big players thereby depriving the small investors of access to government securities.

What the article ALSO DOES NOT SAY is that the proponents of the Third Party Custodianship plan are fast tracking the removal of Treasurer Lasala because they are aware that given until March 31, 2005, the Bureau under her leadership would have come up with enhancements to its systems that would render the third party custodians irrelevant.

What the article FINALLY DOES NOT SAY is that the third party custodianship is all about PROFIT!!! As blatantly represented by the proponents of the third party plan to their prospective capital investors, they will rake in profits to the tune of billions of pesos per day – certainly a staggering amount!!

It is easy for the proponents to make the public dismiss Treasurer Lasala’s objections as mere stubbornness because the public is not fully aware of its subtle implications!

WE WISH TO LET THE PUBLIC KNOW THAT THE KEY OFFICERS AND A MAJORITY OF THE STAFF OF THE BUREAU OF THE TREASURY ARE ONE WITH TREASURER NORMA L. LASALA IN HER STAND AGAINST THE THIRD PARTY CUSTODIANSHIP BECAUSE IT WILL SET BACK THE GOVERNMENT IN ITS TRACK TOWARD FINANCIAL RECOVERY.

WE WILL NOT ALLOW ANYONE TO RAM THE THIRD PARTY CUSTODIANSHIP DOWN OUR THROATS. WE WANT TO BE HEARD AND OUR CONCERNS ADDRESSED SATISFACTORILY!!!