Fine Properties

Secret wealth? 5 top bets have undisclosed assets

Secret wealth? 5 top bets have undisclosed assets
by Karol Anne Ilagan and Malou Mangahas

THE PHILIPPINE PRESS, widely held to be the freest and most rambunctious in Southeast Asia, has no reason to boast and gloat as journalists across the globe observe World Press Freedom Day today.

Aside from the string of unsolved murders of journalists, spotty compliance and outright mockery of the law on the disclosure of statements of assets, liabilities and net worth (SALN) by the country’s justices, lawmakers and executive officials continue to hinder the people’s right to know – ironically this year’s theme in commemorating press freedom.

Public officials have observed the SALN law largely in the breach.

Since 2006, the Supreme Court has flatly refused to disclose the SALNs of justices and judges. This is despite a pleading for disclosure that the Philippine Center for Investigative Journalism (PCIJ) filed in October 2009 that had the high court creating a committee to study the issue and resolve the matter.

Last February, the committee headed by now retired Justice Minita Chico-Nazario recommended the creation on a Committee on Public Disclosure (CPD) to deal with requests for SALNs. The implementing guidelines for the CPD are supposedly being drafted and might be released before Chief Justice Reynato Puno retires on May 17.

If the Supreme Court justices are totally secretive about their SALNs, senators and congressmen file grudgingly, it seems.

These lawmakers, including the leading candidates for president and vice president, typically resort to material omission of data about all their business and financial interests, resulting in a virtual mockery of the SALN law.

Last April 30, the deadline for filing of the SALN for 2009 lapsed. The PCIJ obtained copies of the latest SALN of five of six senators running for president and vice president filed – the Liberal Party’s standard bearer Benigno C. Aquino III and his running mate Manuel Roxas II; the Nacionalista Party’s standard bearer Manuel B. Villar Jr. and his running mate Loren Legarda; and independent candidate for president Ma. Ana Consuelo ‘Jamby’ Madrigal.

No copy of the 2009 SALN of Bagumbayan Party candidate Richard Gordon was yet available as of 5 p.m. last April 30.

The filing of the SALN is a basic duty of all public officials, but most specially, of those serving in high office.

The essence of disclosing business interests and financial connections is to show information on other sources of income of a public servant aside from his salary from government. Theoretically, this would help explain an official’s lifestyle, in the case that he is able to live one that he could not have afforded though his salary alone.

Too, the SALN is a tracer and tracker. It serves as a check for public officials who might have an interest in a business that may be affected by his or her performance or functions in office.

To derive the list of business interests that the top candidates did not disclose, the PCIJ compared the candidates’ latest SALNs with their SALNs from prior years, and conducted a reverse-search on all their business and financial interests using the dabatase of the Securities and Exchange Commission (SEC).

The PCIJ’s research does not reveal any other active business interests or financial connections that LP candidate Aquino had not disclosed in his SALNs until 2009.

Hidden or forgotten?

However, the PCIJ research also showed that five candidates for president had omitted or failed to disclose some of their business interests and financial connections in their SALNs. For instance:

  • Villar failed to report in his 2008 and 2009 SALNs at least three other corporations in which he or his spouse have business and financial interests. But the PCIJ has also compiled a list of 29 corporations in which Villar has associated interests based on SEC data, as well as the articles of incorporation, general information sheets and financial statements of the same corporations.
  • Madrigal is an officer and stockholder of at least five corporations that are not listed in the SALNs she filed from 2004 to 2007, and for 2009. One of these companies is Harmony Therapy Centre Corp. (formerly Glorious Buddha, Inc.), which engaged in trade and first registered with the SEC on April 26, 2002. The corporation’s 2004 and 2005 general information sheet or GIS indicate that Madrigal and her husband Eric Dudoignon Valade are both officers and shareholders of the company. Madrigal has subscribed P8,000 worth of shares and Valade, P10,000.

Harmony Therapy Centre’s most recent GIS available in the SEC online database are for the years 2004 and 2005. Madrigal’s 2004 and 2005 SALNs do not list the company as one of her business interests.

The Madrigal listed in the SEC documents of Harmony Therapy has the same address of Senator Madrigal in her SALNs: 145 10th St., New Manila, Quezon City.

Four other companies – Madrigal Pacific Carriers Corp., Pino Armadora Corp., Radiant Holdings, Inc., and Revelstoke Holdings, Inc. – list in their 2007 general information sheets that a “Maria Ana A.S. Madrigal” is an officer and has subscribed shares worth P9.36 million, P100, P2.9 million, and P123,300 in each of the companies, respectively. The Madrigal that has shares in these corporations has the same tax identification number of Senator Madrigal in her SALNs. These four companies are not entered in Madrigal’s 2007 SALN.

  • Gordon did not list one non-stock foundation in his 2000 SALN as a tourism secretary, and two other non-stock foundations in his 2006 SALN.

The first, Olongapo City Foundation, Inc., was not enrolled in the 2000 SALN that Gordon filed as jointly with his spouse, then Olongapo City Mayor Katherine Gordon. According to its 2000 GIS, Olongapo City Foundation was registered as a non-stock corporation registered on January 24, 1985, with Richard J. Gordon as non-stock member and Katherine H. Gordon as vice-president. The Katherine Gordon listed in the 2000 GIS of the Foundation has the same address of Richard Gordon in his SALNs – # 48 Gallagher St., East Tapinac, Olongapo City.

Gordon is also listed as an incorporator and trustee of Victories of the Revolution Foundation, Inc. and Philippine-India Parliamentarians Friendship Association Inc., which were registered with the SEC on September 6, 2006 and September 7, 2006, respectively. Both non-stock corporations are not listed in Gordon’s 2006 SALN, and include other lawmakers and politicians as incorporators and trustees.

Teodoros, too

A similar material omission of business interests that he and his wife own has been committed by former defense secretary Gilberto C. Teodoro Jr., administration Lakas-Kampi-Christian Muslim Democrats (CMD) standard bearer.

Teodoro’s wife, Tarlac Representative Monica Prieto-Teodoro, is listed as an incorporator and trustee of Golden Roosters Foundation, Inc. (formerly Golden Roasters Foundation, Inc.), a non-stock corporation registered with the SEC on May 15, 2008.

According to its articles of incorporation submitted to the SEC on August 29, 2008, the foundation aims “to engage in philanthropic, humanitarian, civic and charitable purposes, all for the welfare of the Filipino children… to empower children who are oppressed, neglected, abandoned, rejected, orphaned and abused.” The lawmaker has contributed P800,0000 to the capital of the association.

The Monica Prieto-Teodoro in the SEC documents of Golden Roosters has the same signature and TIN (Taxpayer’s Identification Number) with that of the Monica Prieto-Teodoro in her joint SALN with Gilbert in 2008.

A “Monica Louise P. Teodoro” of Legaspi Village, Makati City is also listed as an officer and stockholder of Ringwood Holdings, Inc., according to its 2001 general information sheet. Teodoro has subscribed shares worth P100 in this company.

The TIN of Monica Louise P. Teodoro here is 123-492-619 and does not match the TIN indicated in her SALN. But Marybeth L. de Leon, treasurer and stockholder of Ringwood Holdings lists 123-493-627 as her TIN. De Leon’s TIN is Monica’s TIN in her SALN.

Golden Roosters Foundation and Ringwood Holdings are not listed in at least the 2008 and 2001 joint SALNs of Gilbert and Monica Teodoro, respectively,

JC has 3 firms

Even a less-affluent candidate like Kapatiran Party’s John Carlos De los Reyes is in penalty of non-disclosure of his being an incoporator of one entity: the Solidarity and Common Good Movement of the Philippines, Inc., which filed its articles of incorporation with the SEC on January 4, 2008.

The corporation was registered with the Commission on January 7, 2008. No such entity is listed in de los Reyes’s 2008 SALN. Aside from this entity, De Los Reyes had admitted in GMA Network’s television segment Votebook that aired in early April 2010 that he owns two more business interests – a brick manufacturing business called Legobrick and a water refilling station called Water Plus.

Neither business appears in De los Reyes’s 2008 SALN, according to the Votebook episode.

Villar’s web of firms

As may be expected, Villar, the wealthiest of the nine candidates for president, has not disclosed the most number of business interests and financial connections.

The SALNs that he had filed from 2001 to 2009 are typically sparse and scarce with data that could fully explain his P1.04-billion net worth as of 2008, which slid just slightly to P947.8 million in 2009.

Records show that his spouse Las Piñas representative Cynthia A. Villar is listed as an officer and stockholder of Gourmet Garage Inc., a company registered with the SEC on June 10, 2002.

The congresswoman has subscribed shares worth P84,400 in Gourmet Garage, which is engaged in establishing, operating and maintaining restaurants, coffee shops, refreshment parlors, cocktail lounges, and catering, according to the company’s 2007 and 2008 GIS.

Gourmet Garage, Inc. is not listed in at least the 2007 and 2008 joint SALNs of Manny and Cynthia Villar.

The Villar couple listed only two companies – Fine Properties, Inc. and Adelfa Properties, Inc. – in their joint SALN for 2008.

SEC data also show that Manny and Cynthia Villar are listed as incorporators of Villar Foundation, according to the foundation’s 2009 GIS. Villar Foundation is not listed in at least the 2009 SALN of the couple.

In their 2009 SALN, the Villars listed four companies, including two that they had reported in prior-years’ SALNs but unloaded in their 2008 SALN.

The four companies enrolled in the 2009 SALN of the Villar couple are Fine Properties, Inc., M.B. Villar Co. Inc., Macys, Inc., and Mooncrest Property Development.

Adelfa Properties, Inc. is no longer listed in the 2009 SALN of the Villars.

A reverse-search analysis of SEC records, as well as copies of the pertinent articles of incorporation and general information sheets, show that at least 29 other firms appear to be related to the Villars directly or through their holding companies and other corporations in which they have equity interest.

For instance, both Fine Properties and Adelfa Properties are listed as major stockholders, with shares worth over P3 billion and P1.9 billion, respectively, in the Villars’s publicly-listed real estate holding firm, Vista Land and Lifescapes, Inc.

According to Vista Land’s 2009 GIS, Fine Properties owns 35.63 percent, and Adelfa Properties, 22.48 percent, of Vista Land’s total stocks. The Villars’s sons, Manuel Paolo and Mark, are both members of the board of directors of Vista Land and Lifescapes.

Which owns which?

An investment holdings company, Vista Land has four subsidiaries: Britanny Corp. Camella Homes, Inc. (formerly C & P Homes, Inc.), Crown Asia Properties, Inc., and Crown Communities Holdings, Inc.

From these four Vista Land subsidiaries, the companies in which the Villars appear to have direct or associated interests branch out like a multi-layered cobweb of corporate entities, yet withnearly all represented by the same corporate executives, officers, and lawyers that represent and run the big Villar entities.

Camella Homes, Inc. (formerly C & P Homes, Inc.), a real estate company, also has subsidiaries: Mandalay Resources, Inc. and Household Development Corp.

Fine Properties is a stockholder of Household Development Corp. with paid-up capital worth P4 million, according to Household Development Corp.’s 2009 GIS.

Crown Communities Holdings, Inc., which changed its name to Communities Philippines, Inc., has at least 13 subsidiaries, representing the multiple property-development projects across the Philippines of the Villar companies.

Communities Philippines now consists of 13 companies that have separately registered with the SEC, namely Communities Batangas, Inc., Communities Pangasinan, Inc., Communities Bulacan, Inc., Communities Naga, Inc., Communities Pampanga, Inc., Communities Iloilo, Inc., Communities Cebu, Inc., Communities Davao, Inc., Communities Tarlac, Inc., Communities General Santos City, Inc., Communities Negros Occidental, Inc., Communities Leyte, Inc., and Communities Isabela, Inc.

As for Adelfa Properties, Inc., one of its major stockholders, Althorp Holdings Inc., is a subsidiary of Cambridge Group, Inc.

Cambridge Group, in turn, lists four subsidiaries: Carissa Homes, Casa Regalia, San Marino Homes, and Towns and Villas, Inc., according to its 2009 GIS.

Adelfa is also listed as a major stockholder in Polar Property Holdings Corp. According to the 2009 GIS of Polar Property Holdings, Adelfa has subscribed shares worth P2.57 billion, owning 53 percent of the company’s total stocks.

Polar Property Holdings, meanwhile, controls Polar Mines Realty Ventures, Inc., another real estate entity of the Villars.

Cross-sale deal

On October 29, 2009, Vista Land in a disclosure notice to the Philippine Stock Exchange (PSE) said that it had entered into an agreement with Polar Property Holdings “for the sale and conveyance of Polar Property in favor of VLL of its shares and subscription to shares of Polar Mines Realty Ventures, Inc.” representing total amount of P702.65 million.

In exchange for the shares and receivables of Polar Realty, Vista Land transferred to Polar Property 320,686,000 shares of Vista Land to Polar Property by way of a cross-sale through the PSE.

The shares-swap increased Polar Property’s interests in Vista Land from 5.35 percent to 9.11 percent, even as Polar Property and Vista Land acknowledged in the disclosure notice that they have common directors (including Manuel Paolo Villar) and a common significant shareholder, Adelfa Properties, Inc.

This multi-layered corporate structure is at best complicated to both untrained eye and even regulators.

Controlling interest?

The set-up may allow for indirect relationship of shareholders and companies, according to Ferdinand Sales, assistant director of the SEC’s Corporate and Partnership Registration Division.

Sales explains that if Stockholder A is one of the stockholders of Corporation A, and Corporation A is stockholder in Corporation X, when Corporation X declares dividends, this will definitely accrue to Corporation A and will constitute part of the retained earnings of Corporation A.

“(W)hen Corporation A declares a dividend, then that will be the time that it will accrue to Incorporator A. But, definitely, Corporation X cannot declare a dividend directly to Stockholder A of Corporation A unless Stockholder A is also stockholder in Corporation X,” he says.

Professor Rafael Rodriguez, former dean of the University of the Philippines College of Business Administration, affirms Sales’s explanation as correct. But Rodriguez says the size and degree of control of the shareholders in both companies are also critical pegs of analysis.

“If I’m just an ordinary owner, a small owner of A and A owns X, normally I won’t have control of X,” he says. “But this changes, of course, if I have very large interest – in fact, if I own Corporation A completely, and Corporation A owns a major share of Corporation X. “

In the professor’s view, bigness of interests may also command degree of control in companies, no matter how multi-layered the set-up is. “I can dictate as, let’s say, president of Corporation A: ‘Here’s what you do, this and that’,” he explains. “So there are separate things.”

A corporation is, of course, governed by a board of directors, and the members of the board are elected by shareholders in proportion to their stockholdings.

Says Rodriguez: “If you have just one stock share, you have just one vote. That’s why the small stockholders are unable to elect directors.”

The picture changes for big shareholders who can command enough clout to elect some or all the company directors, he says.

Failure of candidates

“For example,” says Rodriguez, “the corporation has nine directors. Those nine directors will elect the president, the chairman of the board…If you own the corporation, all of those nine are yours, they’re all your people. So you’ll say, ‘We will vote this person for president. If you don’t do as I say, I can have you thrown out and replaced.’ So you control all those nine.”

In more realistic cases, Rodriguez says, “it’s enough that you control 60 percent of the corporation because out of the nine, you need five. When voting time comes, when four want this person as president but I want you for the post, well, I have five votes and they’re just four so I win even though I don’t own the entire corporation.”

The failure of the candidates to disclose the foundations in which they are stockholders or officers is a breach of the SALN law, according to Arpee Jao, special investigator IV of the Civil Service Commission’s legal affairs office. The law specifies, in fact, that foundations should be disclosed in the SALN.

But Jao says that the disclosure of associated business interests is not strictly prescribed in the law. She adds that there is no need for an official to declare another firm in which the company directly related to him or her has stocks in.

“What it just required is for you as an official or employee of government to disclose where you are putting your money, where you are earning,” she says. “(If) you have invested your money for a certain number of stocks to Corporation A, so it is Corporation A which will be giving you in return, dividends or earnings based on your shares, ‘di ba? So it is with Corporation A that you have your financial connection, because it is with Corporation A that you have directly invested and not with Corporation X.” – With additional research by JC Cordon, PCIJ, May 2010

The inside story of Villar's visit to PSE

The inside story of Villar’s visit to PSE
By Lala Rimando Newsbreak

MANILA, Philippines – Presidential aspirant Manuel Villar could argue that he did not violate any law or a regulatory rule when his family’s real estate firms were able to raise billions of pesos through the stock exchange in 2007. However, he crossed ethical lines.

Villar had “improperly interfered” when he attended a meeting of the Philippine Stock Exchange (PSE) board that was called to discuss an issue about Vista Land & Lifescapes Inc., his holding firm, according to Sen. Juan Ponce Enrile during a press conference on Thursday.

Villar was the Senate president in 2007 until Enrile replaced him in 2008.

In June 29, 2007, Villar attended the PSE board meeting purportedly to personally justify to the directors why some Vista Land shares should be allowed to be sold to public investors.

While his corporate lieutenants could have done the job, his presence in the boardroom was meant to rush the board directors in making a decision since Vista Land’s investment bankers and underwriters were about to hit the road to market Vista Land shares to local and foreign investors.

That same day, the PSE board decided to allow the release of some Vista Land shares from escrow. Villar had wanted the board to free up shares equivalent to 30% of the holding firm. The board’s decision was to allow only 11%. It was generally perceived as a decision in Villar’s favor.

“I got the impression that this guy really gets what he wants,” shared a well-placed source who was in that PSE board meeting. “I had shivers.” (Read: When Villar’s business and politics mix)

Villar’s presence at a PSE board meeting is not new to Manila’s business community. The incident has spread around and the general impression at the time was about Villar was throwing his weight around.

Bong Bernas, a corporate lawyer who has listed firms as clients, said businessmen whose empire has reached a certain size and scale are aware of the weight of their position, even if they are just in the private sector. “They don’t want image issues,” he shared.

On Villar’s visit to the PSE, Bernas has this to say: “There was clear conflict-of-interest there. He should not have used the weight of his office for personal gain.”

The Code of Conduct and Ethical Standards for Public Officials and Employees, says a public official “shall avoid conflict of interest at all times.” (Read: When Villar’s business and politics mix)

Shares under lock-up

Villar reached out to the PSE board because he wanted to include the shares of his firm, Polar Properties, in Vista Land to be part of the pool of listed Vista Land shares sold to the public.

Polar, which used to be the residential condominium arm of the Villar Group, had 722,615,487 shares in Vista Land at the time the holding firm listed its common shares in the PSE.

The practice at the PSE was to identify who among the shareholders have 10% or more stake in the company after its shares were listed in the exchange. The physical copy of the shares are then delivered to a bank or another escrow agent, and these could not be withdrawn and sold before the lock-up period of 180 days.

Having a lock-up period is a common rule among stock markets in the world since it aims to protect the minority shareholders. Those who own a considerable stake—described as 10% and above—are likely to have acquired their existing shares at a price lower than how much new investors would buy them from the stock market for the first time during a public offering.

In the case of Polar, it acquired its Vista Land shares at P2.46 per share during a previous share swap exercise. At the time of listing, new investors acquired their Vista Land shares at around P6.85.

With a lock-up period, the existing shareholders would not be able to sell their shares, make a fat profit of around P4.4 per share (P6.85 selling price minus P2.46 acquisition cost), and leave behind the new ones who have yet to earn the same margin.

Since the stake of Polar in Vista Land was equivalent to 11.3%, these shares were set aside to an escrow account. The same was imposed on Fine Properties and Adelfa Properties, which at the time had 47.6% and 24.3%, respectively, in Vista Land.

Just because Polar breached the 10% threshold for the lock-up rule by a slim 1.3%, Polar’s shareholders could not sell any of its shares in Vista Land for 6 months.

At the target price of P6.85 per Vista Land share at the time, each share of Polar was worth P105 million. The entire block was worth P5 billion.

Villar’s presence in the PSE boardroom was an effort to ask the board to reconsider putting off the chance for Polar, which his family also effectively owns, to immediately cash in on the entire or a portion of its block shares.

Corporate lieutenants

The lock-up issue on the shares of Polar stemmed from the lack of coordination between two groups that were working on the Vista Land fund raising.

The cast of characters in this whole scheme included law firms—Picazo Buyco Tan Fider and Santos Law Firm and Romulo Mabanta Buenaventura Sayoc & De Los Angeles Law Office—and those in charge of raising the funds: global coordinator and bookrunner UBS Investment Bank, co-lead manager ABN Amro Rothschild, and lead domestic underwriter BDO Capital and Investment Corporation.

One group was in charge of restructuring the entire Villar Group of real estate companies to raise funds for expansion plans and, as Enrile has alleged, for the campaign kitty of Villar.

Raising funds through the stock market was the chosen route since the real estate group, mainly previous flagship firm Camella & Palmera Homes (C&P), would have difficulty tapping the debt market again. C&P and its sister companies had defaulted on billions of pesos of debts from commercial banks and bond investors in the aftermath of the 1997 financial crisis.

The law firms essentially moved assets and resources around through share swaps, property dividends, among others. In early 2007, Vista Land emerged. It was packaged to be the largest homebuilder in the country and its portfolio of products ranged from low-end to high-end, and from horizontal to high-rise or vertical developments.

This first group arranged and signed the escrow agreement to lock up Polar’s shares for 6 months starting June 20, 2007.

The following day, June 21, the second group—composed of the investment bankers and underwriters—called the attention of PSE’s listing unit. In a letter request, this group asked that the shares of Polar be excluded from the lock up period.

The reason, apparently, was that the two groups are not abreast of the goal of the other. The investment bankers and underwriters, for instance, had already included the Polar shares in the pool of primary and secondary shares they were about to offer to public investors. The more shares the bankers could sell, the higher the chance they could produce the fresh funds that Villar and Vista Land were aiming to raise.

Proceeds from the sale of the 2.12 billion primary shares would translate to over P14.5 billion in fresh funds for the coffers of Vista Land. On the other hand, proceeds from the 986 million secondary shares will yield almost P7 billion, but this will go to the existing Vista Land shareholders, including Polar.

Apparently, the investment bankers wanted to sell 2% out of Polar’s 11% stake since this means another P1 billion in fresh funds for Polar’s shareholders, which include the Villar family.

Polar is 53% owned by Adelfa Properties, where spouses Manuel and Cynthia Villar have a combined 99% stake, based on the 2009 SEC records.

“Director Vivian Yuchengco said the board is in this predicament because of the fault of the underwriters and counsels who insisted on the structure. She suggested that sanctions be given to these professionals who caused these problem knowing fully well that the Exchange requires the lock up,” according to the minutes of a PSE board meeting provided by Enrile during the Thursday presscon.

No lock-up rule

“We didn’t know what rule we will apply to allow the release of Polar shares that were already locked up,” a source who was present in the board meetings said. The source spoke to on condition of anonymity.

The minutes of the board meetings confirmed that the PSE has no specific rule on how to apply the lock-up requirement in the mode of listing that Vista Land took.

Vista Land did not raise funds through an Initial Public Offering (IPO), which is the more common mode.

Vista Land raised funds through an alternative mode called Listing By Way of Introduction (LBWI), which is a way for companies to trade their shares and have access to liquidity. Some companies avail of this to prepare them for an IPO, which involves more stringent financial and documentary requirement. Others basically just want an avenue for their employees to trade their stock options through a financial market.

At the heart of the issue on whether Polar shares should be locked up or not is the difference between the listing date of the shares under an IPO mode and LBWI. Once the shares were listed in the stock exchange, public investors could already buy or sell them.

In an IPO, the company first offers the shares to the public before it lists the sold shares on the stock exchange. In an LBWI, the company lists its existing shares first on the stock exchange, before it could sell additional or new shares to raise funds.

Not having rules that could be directly applied to the Polar shares issue, the PSE’s Listings Department considered the lock up rule for IPOs: “The applicant company shall cause its existing stockholders or security holders who own an equivalent of at least 10% of the issued and outstanding shares not to sell, assign or in any manner dispose of their shares for a minimum period of 180 days after the listing of the said shares.”

All was fine and smooth as Vista Land’s lawyers agreed with the PSE to lock up the Polar shares and even executed the escrow agreement on June 20, 2007.

This was only raised when the other professional group working for Villar wanted to undo what the first group has already signed up and committed to.

Moreover, those who crafted the lock-up rules for the LBWI mode did not consider when or if the lock-up period applies to existing shareholders, like Polar, who would want to sell their shares in the company also on the same day that the company’s shares were listed.

According to the rules of the PSE for LBWI mode, the listed firm, in this case Vista Land, must “conduct a public offering of its shares within one year following the listing by introduction.”

There is no PSE rule that bans a firm that lists via LBWI to offer its shares to the public simultaneously with its listing.


As the PSE management and Vista Land counsels deal with these issues, the investment bankers and underwriters were uneasy. The roadshows on the Vista Land shares was to start 8 days after, or on June 29, 2007.

PSE president and chief executive officer Francis Lim raised the issue to the board. The PSE directors, however, only had one regular board meeting before June 29.

On June 27, the board members had a regular meeting and the case of Vista Land-Polar was in the agenda. The meeting ended without the board arriving at a final decision.

A special board meeting was called on the morning of June 29. Board members were surprised when Villar walked in with Lim.

Villar was in that special meeting with the group of Atty. Gemma Santos, the legal counsel for Vista Land, and the representatives of UBS, according to the meeting notes.

“Mr. Villar thanked the members of the board and gave a short background on the application of the Villar group to release shares in lock up so that they could be included as part of Vista Land’s public offering,” the minutes of the meeting chronicled.

Villar and UBS reportedly tried to bat for the lifting of the lock-up rule not only on Polar shares but also on Fine Properties (48% stake in Vista Land). They were eyeing some 30% of the locked up shares to be added to the shares for sale.

He stayed for less than an hour.

After the board members’ caucus, they debated the case of Vista Land from 10:00a.m. to 10:30a.m.(Read: How Villar ‘pressured’ the PSE board)

At the end of the meeting, the board has agreed to allow the release of the escrowed shares of Polar. Some 2%, out of the 11%, were eventually included in the pool of secondary shares for sale.

In a day, Polar’s 11% shares in Vista Land was listed on the exchange. Two percent of which were sold by the underwriters. At the end of the day, Polar was left with only 9%, which means it did not reach the 10% trigger level for the lock-up rule anymore.

In 2008, Polar’s stake in Vista Land has been whittled down to 5.35%. This means its owners have already cashed in somewhere in the vicinity of P2 billion from selling its shares in the listed company.

Vista Land’s assets total P43.2B

Vista Land’s assets total P43.2B
Philippine Daily Inquirer

MANILA, Philippines—Sen. Manny Villar’s Statement of Assets, Liabilities and Net Worth (SALN) in 2008 showed he owned 99.99 percent of Adelfa Properties Inc. and 97.88 percent of Fine Properties Inc.

Combined, both firms own more than half (58.1 percent) of Vista Land & Lifescapes Inc., according to the Philippine Stock Exchange. Adelfa owns 33.9 percent of Vista Land’s outstanding stocks while Fine Properties owns 24.2 percent.

Vista Land was incorporated on Feb. 28, 2007, as an investment holding company. It operates through four distinct business units: Brittany, Crown Asia, Camella Homes, and Camella Communities. The business units are involved in various real estate markets ranging from the low-cost housing segment to the high-end market offering luxury homes.

Vista Land and its subsidiaries’ projects include Portofino, Crosswinds, Maia Alta, Ponticelli, Tierra Nevada, Pacific Residences, Wedgewood and Plantacion Meridienne.

The company had total assets of P43.2 billion in 2009.

In March this year, Vista Land said it was allotting P10 billion to launch 30 projects for 2010, bringing its real estate portfolio to a total of 157. The projects cover 19 provinces and 46 cities and municipalities nationwide.

Vista Land’s board of directors consists of Marcelino C. Mendoza (chair), Benjamarie Therese N. Serrano, Cynthia J. Javarez, Manuel Paolo Villar, Mark Villar, and independent directors Ruben O. Fruto and Marilou O. Adea. Its officers are Serrano, president and chief executive officer; Javarez, treasurer; and Manuel Paolo, chief financial officer. Manuel Paolo and Mark are Villar’s sons. Inquirer Research

Sources: Sen. Manny Villar’s baseline SALN, Vista Land & Lifescapes Inc. official website, Securities and Exchange Commission and Philippine Stock Exchange

Villar: Trouble with hellos

Villar: Trouble with hellos

NP bet used influence to twist stock market rules

By Gerry Lirio
Philippine Daily Inquirer

(First of two parts)

MANILA, Philippines—Hello Fe! Hello Francis!

Sen. Manny Villar called Fe Barin, chair of the Securities and Exchange Commission, and Francis Lim, then president of the Philippine Stock Exchange, many times sometime between May and June 2007, the Philippine Daily Inquirer has learned.

But the calls, according to SEC and PSE lawyers and brokers interviewed by the Inquirer on separate occasions, were “too many to be easily dismissed and forgotten.”

They couldn’t forget about the calls either, they said, most especially because Villar, then Senate President, wanted the SEC and PSE officials “to throw the exchange rules out the window.”

Villar was seeking the release from escrow of about 1.2 billion of the 5.3 billion secondary shares of Vista Land & Lifescapes Inc. in June 2007 so these could be offered both as primary and secondary shares at the same time, or several days apart.

The Senate President not only made the calls, he also appeared before SEC and PSE board meetings, the lawyers said.

Villar and his wife Cynthia, the Las Piñas representative, are majority stockholders of Vista Land, the couple’s flagship company.

The couple became P6.75 billion richer from the secondary offering of 985.9 million shares that began on July 26, 2007, or within the escrow period of 180 days from the date of initial offering.

Lawyers said this violated article III, part D, section 7, of the exchange’s revised listing rules, which provides for a 180-day lockup on the secondary shares.

Vista Land, formed only in February 2007 to oversee operations of decades-old real estate brands Camella, a listed firm, Crown Asia and Brittany, made P14.5 billion from the sale of 2.12 billion primary shares.

Despite a weak showing in early trade, share prices soared to more than the offer price of P6.90, or up to as much as P7.50 per share. Share prices subsequently took a dive and hardly recovered since the secondary offering.

Simply put, Villar wanted the secondary offering held at once, despite the 180-day lock-up rule. He wanted to seize the day while the market was bullish. And he got it.

180-day lock-up rule

The rule, according to a PSE document obtained by the Inquirer, requires a company to cause its shareholders owning at least 10 percent of its issued and outstanding capital to enter into an agreement not to sell, assign, or in any manner dispose of their shares within the 180-day period from the listing of the shares.

The 180-day rule effectively puts the secondary shares in escrow mainly to allow the public buying into the primary shares to have their due course, stabilize the market share of prices, and to prevent the majority stockholders from abandoning the company which could take place during a secondary offering.

“It is an assurance that the majority stockholders are not selling just because they want to abandon ship and that they want to first jump from it,” an SEC lawyer said.

It also allows the SEC to check a company’s tangible assets of any legal encumbrances and, if so, if it is worth stopping the public offering.

How Villar managed to get his wish shocked some SEC and PSE lawyers and stockbrokers. Five of them talked to the Inquirer separately at the height of the controversy surrounding an ethical complaint lodged by Sen. Jamby Madrigal against the billionaire-senator last year in connection with the multibillion C-5 road diversion controversy.

Lobbying for private business

The trouble with Villar’s phone calls, the lawyers said, was that these were “unethical and inappropriate” because he was a high-ranking government official personally lobbying for his private business interest. “These exerted so much pressure on the PSE board,” a lawyer added.

An initial public offering is often undertaken by younger and smaller companies looking for new capital to fund expansion plans, though some large privately owned companies may also look to enter public trading.

A secondary public offering is an opportunity to welcome new investors into the company. But more importantly, it gives the selling shareholders the chance to cash in on their holdings with minimum tax payments.

This is allowed, but the shareholders need to observe the 180-day lock-up period after the initial offering.

The PSE approved the application of Vista Land for initial listing on May 24, 2007, subject to the fulfillment of certain conditions, among which was compliance with article III of its revised listing rules.

Terms sheet

As indicated in their signed offer terms sheet, the selling shareholders (or the Villars’ holding companies) namely, Adelfa, and Polar, offered to the public a total of 1,265,000,000 Vista Land in secondary shares.

To comply with the requirement, Vista Land and the shareholders executed an agreement with its agent ATR Kim Eng Capital Partners Inc. placing in escrow 5,320,192,648, representing the Villars’ 82.28 percent stake on June 20, 2007.

Broken down, the shares belonged to Fine Properties, 3,042,615, 495 (47.63 percent); Adelfa Properties, 1,554,961,666 (23.34 percent); Polar Property Holdings Corp., 722,615,487 (11.31 percent).

But on June 21, 2007, Vista Land requested the PSE in a letter to waive the 180-day lock-up period, according to the PSE document. The letter asked the PSE board to allow the exclusion and release from escrow of the secondary shares.

According to an SEC lawyer, Villar called Barin at least twice in the middle of an SEC board meeting. The SEC chair later revealed to the board that Villar had made other calls at other times.


The Inquirer tried to reach Barin, but a ranking SEC official said Barin had rejected many requests to talk publicly about Villar’s request.

But as if his calls were not enough, Villar made what the SEC lawyer called an “unprecedented” move. Along with Francis Lim, Villar went to the SEC board meeting “unannounced and uninvited” and right there and then, with Lim’s help, “made a pitch for a relaxation of the 180-day lock-up period before the board” which was “a no-no,” he added.

“Villar came too strong to get his wish,” the lawyer said. “He wanted Chair Barin and the board to swallow the rules.”

The five-person SEC board rejected Villar’s request. “The decision was made because there were a number of other IPOs during the period and they did not want to send a bad signal to investors,” the SEC lawyer said.

“The lockup is essentially a sign of sincerity of the original owners,” he said. “The rule not allowing the original stockholders would prevent them from taking advantage of high prices and not get out. So, investors would not be hoodwinked.”

Quick PSE decision

Under its rules, the SEC can give “exemptive” relief which is an “extraordinary” procedure.

The SEC lawyer said this called on the PSE to write the SEC’s market regulation department for it to refer the exemption to the SEC en banc. However, Villar made a shortcut because the market was bullish.

The lawyer said that to his knowledge, no exemption had been granted to anyone, or at least in the last four years.

The SEC disapproval prompted Lim, according to a PSE lawyer, to call for an “emergency meeting” of the PSE board several days before the offering to address Villar’s predicament.

“There at the meeting, Senator Villar threw his weight around and tried to twist the arm of the PSE board to get his wish,” the lawyer said.

“Anyway, you don’t always follow your rules,” the lawyer quoted Villar as telling the board. “Why can’t I get an exemption? Magtulungan na lang tayo (Let’s just help each other).”

Shocked PSE board

It was rare, according to the lawyer, that Lim had called for an unscheduled meeting. It was even rarer that a person, especially the then Senate President with a pending personal request, was made to appear before them and to argue his case, he added.

At least two PSE board members—Eusebio Tanco and Alejandro Yu—expressed shock and dismay over Villar’s overtures during the meeting, according to the lawyers.

The Inquirer tried to reach Tanco and Yu, but was told that they wouldn’t want to talk about it publicly, citing the exchange’s Old Boy network, the downside of esprit de corps.

Some PSE lawyers tried to dissuade the PSE board from granting Villar’s wish.

“Such secondary shares are currently held in escrow pursuant to the lock-up requirement discussed in the item above. The offer period is expected on July 16 to 20, 2007, which is within the escrow period,” the document said.

“By allowing Villar to break the rules,” the PSE document added, “the reputation of the exchange, particularly the consistent and equitable application of the rules, may be questioned if the said request will be granted.”

Despite the SEC disapproval, the PSE and Vista Land, then still having no IPO track record, went ahead with the secondary offering.

“There are a number of ways to skin a cat,” said a ranking SEC official when asked how this was done. While the SEC approves its rules and exemptions from it, he added, the PSE is a self-regulatory body.

Lim’s side

In a statement e-mailed to the Inquirer, Lim said the secondary shares offered under Vista Land’s follow-on offering was not part of the shares that were the subject of the 180-day lock-up.

“It is important to point out that the Vista Land offering was done in connection with its listing by way of introduction. The PSE rules on listing by introduction contemplate that the company be as widely held as possible by the investing public,” he said.

“The PSE Board’s approval of the listing application merely implemented a rule on listing by introduction. This rule requires the applicant company to conduct a public offering of its shares within one year following the listing by introduction,” he added.

But Lim didn’t explain why Villar had to gatecrash an SEC board meeting to follow up his request and why he had to accompany him. Neither did Lim say anything about calling for an emergency PSE board meeting to tackle the same.

Lim turned down Inquirer’s repeated requests for an interview to clarify all other questions.

$2 billion in foreign orders

On July 1, 2007, Vista Land went on a road show to attract foreign buyers in Hong Kong, Singapore, the United States and London. The road show was successful. Mostly foreign investors bought into the secondary offering, according to Vista Land president Jing Serrano.

Of the total offering, 70 percent was allocated to foreigners while the rest was sold to an otherwise lukewarm local market that found the prices too high, according to a broker.

Foreigners snapped up shares of Vista Land during its offer period, generating $2 billion in foreign orders. The company had UBS Investment Bank as sole global coordinator and bookrunner with ABN Amro Rothschild as co-lead manager while BDO Capital and Investment Corp. was the lead domestic underwriter.

Because share prices took a dive and had hardly recovered to its highs since the secondary offering, a local broker said, some minority stockholders raised concerns to BDO, but because they were not organized, nothing came out of it.

Likewise, because of Villar’s surprise visit at the PSE, the scheduled public offering of other companies either was delayed or took a back seat, she added. “By breaking the rules, Vista Land was allowed to break the line.”

By tradition and rules, the PSE lawyers said, the corporate body never allowed public offering of secondary shares and primary shares simultaneously, or a few days apart.

Look who’s calling

They recalled the public offerings of equally prominent companies such as Metro Pacific Investments Corp. and Petro Energy Resources Corp., which were made to follow the same rules. Metro went public in November 2006, Petro in August 2004.

“The lock-up rule has been one of the symbols for the minority of the majority shareholders commitment to its business. It has been respected and observed by all companies that have listed,” the PSE document said.

An SEC lawyer tried to rationalize Villar’s overtures, saying the SEC receives many calls from different people each day either following up papers or lobbying a favorable response for their businesses from the regulatory body.

“It’s some kind of a routine,” the lawyer said. “We get calls from any Tom, Dick and Harry each day. They are free to do that. It’s no big deal. It’s a different story if they ask us to do something illegal. But we do what is just and right here. If you can’t stand the pressure, you shouldn’t be here.”

The PSE lawyer thought otherwise.

“Senator Villar was not just any Tom, Dick, and Harry here,” he said. “He was the Senate President.”

Manny Villar's Statement of Assets, Liabilities and Net Worth Pt 1

Concentric Circles: private musings on Manny, money and a national apocalypse
Lila R. Shahani

Part I: Personal net worth — a case of perjury or money-laundering?

“When I travel, I don’t charge the government, although it’s allowed because it is work-related. I pay my own way. When you are this big, you have to follow the rules. You can’t afford not to, because all eyes are on you. It is not a wise business practice to use government perks. I’ll serve the three terms (allowed by the Constitution). After that, I’ll think about the future. But I’ll stop at being a congressman.” — Senator Manny Villar

There was no doubt about it: the C5 issue had been troubling enough on its own. The scale of its core allegation — that an esteemed solon had willfully deployed public funds for his own personal benefit – had been nothing short of vertiginous. The masterful studies by both Winnie ( and Jamby ( conveyed volumes, as had Joker’s allegations of conflicts of interest a decade before ( The latter’s recent (and arguably dubious) shift in tone notwithstanding (anything for a fee, as they say), a seed of doubt had already begun to nestle in the public mind.

Still, there were other issues those lengthy readings had failed to shed light upon. Looking at Villar’s own C5 Primer and his Senate speech on 2 Feb 2010, one wonders at that controversial 2008 P200M budget insertion, which had been initially embargoed by the DBM, but was subsequently used for the Sucat flyover after it was realized that the C5 extension was in fact a dead-end road. Had there even been an existing “program of work” so as to justify the term “double insertion”? What we have on record, in fact, is an admission by Engineer Adriano (the consultant for Villar-owned businesses who had allegedly dictated the Villar amendment to the 2008 national budget; this, at least, was according to Yolanda Doblon, Director General of the LBRMO, the Legislative Budget Research and Monitoring Office in the Senate) that the amount had been arbitrarily made in anticipation of the fact that the original P 200M would most likely be reduced; the superfluous P 200M may have been added after the dead-end realization had been made, prompting Villar to use the embargoed funds.

GMA supposedly instructed DPWH to submit the study to use the embargoed funds for the fly-over only after the budget allocation had already been made, thereby effectively providing a “program of work” to justify the release of funds. Needless to say, this is highly irregular: in established funding practice, a program of work is usually submitted before. Does this suggest that the additional P 200M had been retroactively added to ultimately “free up” a hitherto unprogrammed amount?

Adriano, a Villar real estate employee, had been put in a critical legislative role. And while there have been indications that, as a Lower House representative, Villar had put some of his employees on the congressional payroll, Adriano himself was apparently not on the Senate payroll. So why was he dealing with LBRMO in the first place? And why does Committee Report 780 contain several admissions indicating position and knowledge with respect to the 2008 budget allocations? Separate documents also tag Adriano as the sole contact person authorized to “deal” with government agencies and the courts (DAR, NIA, lower courts, a Malacañang employee, LGUs, etc.: does this suggest bribery?) before specific Villar company interests could even be addressed.
This is not to quibble over minor details after the fact. But there was no doubt about it, as I said: there had been dubious business practices all round. So who was this Manny Villar and how had he managed to amass wealth that was nothing short of stratospheric in so short a span of time? According to PCIJ, after only 14 years in government, Villar’s net worth had risen to P 1.05B in 2007 or to a staggering 1,292% increase from his assets in 1992:

In order to assess this “sipag at tiyaga” phenomenon as fairly as I knew how, I decided to investigate him myself, and to separate both propaganda and polemic, on the one hand, from what could be empirically verified, on the other. I began to think in terms of a concentric circle: at the center of the circle, I would look at his personal finances (ultimately the measure of a man, one might say), before examining his land dealings in specific regions (as the circle expanded outwards) and, finally, his national/international endeavors on a larger scale (the outermost rim of the circle itself).

The personal: Statement of Assets, Liabilities and Net Worth

So I began with his Statement of Assets, Liabilities and Networth (SALN). The documents studied (with the help of two gifted accountants, two lawyers and several highly-placed financial analysts, not to mention a handful of deeply committed patriots who patiently withstood my incessant questions and valiantly wore as many hats as were needed at any given moment) are copies of SALNs filed in the Philippine Senate. The difficulties in accessing them notwithstanding, they are technically a matter of public record. They cover an 8-year period (2001-2008, inclusive) because the 2009 SALN is only due for filing on 30 April 2010.

Anyone who has had to draw up a balance sheet or assess their own personal net worth will tell you that it can be a royal pain in the neck. But those insufferable categories and dreadful numbers notwithstanding, none of it, really, is rocket science. In a nutshell, it’s simply a snapshot of your financial health in any given year. The net worth statement includes what is owned (assets) on the left side of the sheet, what is owed to creditors (liabilities) on the right side of the sheet, and the net value (or difference) between what is owned and what is owed (net worth). Unless you’re a vagabond or happen to be fabulously wealthy, you generally have both A&L.

So what do Mr Villar’s SALNs indicate (SALNs from 2001 to 2008 at here:
and the the columnar numerical analysis)?

The assets reported consist of only three main types:

a) Real Properties
i) Land/Buildings
b) Investment in Shares of Stock
c) Personal Properties
i) Cash in Bank
ii) Receivables
iii) Other Personal Properties

Please note that this analysis is based on “acquisition cost” or “book value,” as reported in the SALNs. To simplify the analysis, the cost of living and personal expenses of someone of his stature and wealth have not been considered. A more comprehensive reading would include Cynthia Villar’s SALNs because they are, in fact and law, only one economic unit, so cross-checking would be useful. However, this also suggests that Manny Villar’s SALNs are a fairly adequate resource in assessing their conjugal wealth since he is required by law to list her assets on his SALNs as well.

General Observations

* No liabilities were reported at all: ergo, Net worth = Assets, which means that he had nothing to pay off.

* His net worth from 2001 to 2008 increased by P 641,133,934, or 133%, making his 2008 Networth 258% of his 2001 net worth.

*According to several published reports (please see the PCIJ reference below for an example), he started with a networth of P75M when he first entered politics as a Congressman in 1992. In a span of 16 years, therefore, he managed to increase his net worth by over 1000 times!

*The biggest increase can be found in his Personal Properties — P 618,363,371, or 309%, making his 2008 Personal Properties 409% of those in 2001.

*An increase in net worth suggests that he made or realized income in the previous years equal to at least the amount of the increase, considering that he has had no liabilities.

*There is, however, no indication that he made such an income, nor is it suggested how this might have even been possible. As a Philippine senator, his declared salary is only P426,500.

Real Properties

* Real properties generally refer to real estate or immovable properties.

* In 2001, he reported only the following Real Properties at acquisition cost:

Residential, BFRV Las Pinas: P 3, 181, 089
Residential, BF Vista Grande: 80, 000
Residential, BF Int’l LPC: 50, 000
Residential, Putatan, Muntinlupa: 446, 370
Residential, San Nicolas, Cavite: 337, 360
Residential, Naga Rd., LPC: 500, 000
Total: P4, 594, 819

* From 2002-2006, he declared the same properties, but at the aggregate acquisition cost of P4,588,619 (lower by only P6,200, so — for the purposes of this analysis — the lower figure is used).

* In 2007, this figure suddenly ballooned to P 19,518,532, or by 425% of the 2001 level. In absolute terms, this is an increase of P14, 929, 913.

* The 6 real properties listed from 2001-2006 became 38 parcels/pieces in 2007. These are the same properties declared in 2008. Reportedly, they are registered under the names of:

Cynthia alone, 10 parcels: P 5, 794, 232
Manny alone, 6 parcels: 2, 600, 500
The Spouses jointly, 8 parcels: 5, 503, 060
“Cynthia, married to Manny”: 14 parcels, 5, 620, 740
Total: P19, 518, 532

* There is no way to determine from the face of the SALN alone if the 6 properties he declared from 2001-2006 are the same 6 properties listed in his name in Annex “A;” for one, they are different in value/acquisition cost as those previously reported (PHP 2,600,000 v. 4,588,619 in 2002-2006). Those reported in 2001-2006 are listed by location; those in 2007-2008 are listed by title number and area, so an accurate comparison is difficult. However, since the aggregate acquisition cost of these properties in 2001-2006 are not much different from the 2007-2008 values, it may be safely assumed that the 6 properties in MV’s name are the same 6 properties he declared in 2001-2006.

* The rest of the listed properties – those registered under “Cynthia A. Villar m/to Manuel B. Villar,” and those registered in their joint names – are conjugal: should they therefore not have been declared in his SALNs from the outset as well? It is after all highly unlikely that they were only acquired in 2007, in view of the acquisition/book values that were given.

* Considering the values/amounts reported, it is equally unlikely that the Laurel Property on Shaw Blvd. (currently the NP HQ) is included in this list. This property is widely-known as having been acquired by Mr Villar and his wife: in a PDI article by Gerry Lirio in July 2008 (, conversations with Cynthia on their purchase of the property are quoted, including their plans regarding the property, renovation costs of P4M, and the private dinner they shared when they first moved in, etc. Does this, too, suggest misrepresentation and therefore perjury? It should be remembered that we are after all required by law to declare all our assets and liabilities without any exclusions: any misrepresentation is considered to be perjury, which is a criminal offense.

Investment in Shares of Stock

* From 2001-2008, he declared Investments in Shares of Stock in a lump sum amount of P200, 837, 890 – no breakdown and no changes.

* In 2007, he itemized in Annex B.2.1 of his SALN the following “Investment Items” at “Book value” (i.e., acquisition cost):

Shares of Stock, Adelfa Properties: P 99, 997, 000
Shares of Stock, Fine Properties: 98, 000, 000
Shares of Stock, MB Villar Co: 1, 000, 000
Shares of Stock, Macy’s Inc: 500, 000
Shares of Stock, Mooncrest Properties: 1, 340, 890
Total: P200, 837, 890

Could this really have been all? Where were the shares in the other companies? Indeed, had Mr Villar not gone out of his way to declare his enormous wealth to all and sundry? So why is it not in the books, one is compelled to ask?
Since the total value of the foregoing investments is also P200,837,890 — the same amount he reported from 2001-2006 as “Investments” — and the companies are also the same companies he reported in 2001-2006 as those in which he and his wife had “business interests and financial connections,” is it not more likely that he is referring to the very same investments (which remained unchanged from 2001-2008) here?
In 2007, his investments in shares of stock increased by P7,846,850, although they remained unchanged in 2008. These consist of the following items:

Shares of Stock, PLDT: 10,600
Shares of Stock, Sun Life: (no value given)
Club share, Alabang Country Club: 1, 100, 000
Club Share, The Country Club: 4, 150, 000
Club Share, Quezon City Sports Club: 150, 000
Club Share, Tower Club: 356, 250
Club Share, Sta. Elena Golf Club: 1, 800, 000
Club Share, Camp John Hay Golf Club: 280, 000
Total: P 7, 846, 850

Based on the reported values of the “additional” investments above (which were at acquisition cost), it is improbable that they were acquired only in 2007; given real estate values, it is more likely that they were acquired much earlier, but were reported in his SALN only in 2007. Could this be another ground for perjury?

* From 2001-2008, he has consistently declared only 5 companies in which he and his wife have an interest: Fine Properties, Adelfa Properties, MB Villar Co., Macy’s Inc. and Mooncrest Properties. So where and how does Vista Land relate to these companies? What is his connection to, and interest in, Vista Land? And what of other companies associated with him or otherwise referred to by him in press statements as “his” company/ies? This bears much more careful scrutiny.

* The C-5 Report should also be considered, given its core allegation, precisely, that he used his position to allocate funds for the road that traversed and benefited “his” housing subdivisions. According to the C-5 Report, Adelfa Properties, which is owned by Mr Villar and his wife Cynthia, owns Brittany Corporation (formerly Azalea), together with Vista Land and Paolo Villar, MV’s son. Vista Land, on the other hand, is also owned by Adelfa and MV’s sons Paolo and Mark. Adelfa further owns Golden Haven Memorial Park. Brittany, Vista Land and Golden Haven are therefore 100% owned by MV and his family indirectly, through Adelfa. These companies — Adelfa, Brittany and Golden Haven — all sold properties to the government as right of way for the C-5 Project.

Personal properties

* As stated earlier, this is where the most dramatic increases in his net worth can be found:

Amount/Value Increase YoY % Increase

Increase 2001: 200,085,040
2002: 274,868,165 74,783,125 37.37%
2003: 325,798,839 50,930,674 18.53%
2004: 415,327,318 89,528,479 27.5%
2005: 554,398,826 139,071,508 33.48%
2006: 710,225,075 155,826,249 28.1%
2007: 813,180,674 102,955,599 14.5%
2008: 818,448,411 5,267,737 .65%

* Cumulatively, from 2001-2008, the increase in absolute terms is P618,363,371 – or a three-fold increase (309%) over an 8-year period – making his 2008 declaration 409% of the 2001 values.

* From 2001-2004, these were simply reported as “Personal Properties;” in 2005-2006, as “Other Real and Personal Properties.” Here, too, we observe no details or itemization.

*In 2007, “Other Personal Properties” were itemized as follows:

Cash in Bank (SA/CA/TD): P 24, 573, 990
Receivables: 701, 106, 684
Other Personal and Real Properties: 87, 500, 000
Total: P 813, 180, 674
(See Annex B.2.2 of his 2007 SALN)

In 2008, “Other Personal Properties” were:

Cash in Bank P 29, 212, 803
Receivables & Other Personal & Real Properties 789, 235, 608
Total: P 818, 448, 411
(See Annex B.2.2 of his 2008 SALN)

* It is unfortunate that he lumped “Receivables” with “Other Personal and Real Properties” in 2008, so no assessment can be made about whether “Receivables” increased in 2008. For the purposes of the ensuing analysis, the 2007 figure of P701,106,684 will therefore be used. Taken together with the rest of his assets, receivables – even at the amount of P701,106,684 declared in 2007 — comprise more than half of his entire net worth! (Receivables of P701,106,684 divided by his 2008 net worth of P1,046,651, 683 = 67%).

* It is intriguing, to say the least, that he would have receivables in the first place. Remember, this is money one is expecting to receive. This category is usually reported by business enterprises, like corporations and single proprietorships, and arises from sales on credit or loans extended in the course of business. But is he actually running a business as a single proprietor? Is he selling goods or services, where it is customary to sell on credit; or is he engaged in the business of a lending investor, pawnshop or some such enterprise, where he would tend to extend credit or loans? If so, should he not have reported in his SALN that he is a single proprietor/individual engaged in business? As far as we know, he deals only through corporations – like those 5 companies he declared in his SALN, in which he has “business interests or financial connections.”

* What could this imply? The only plausible explanation is that he extended personal loans, year after year, to unspecified parties, or had money claims with these parties, as would give rise to such receivables. If this is the case, to whom did he lend or from whom does he have money claims, and why? Is this not a matter of public interest, considering the enormous size of his “receivables”? Indeed, a typical rural bank outside of Metro Manila and other urban centres, such as Cebu or Davao, might not even have a loan portfolio this sizeable.

* More significantly, if he lent money, where and how did he get the funds to lend? If he has money claims, what is the underlying obligation of the supposed debtor/s? Logic – and the causal connection between creditor and debtor – dictates that he must have had a source for the moneys he lent out and, since he had no reported liabilities, he must have generated enough income to lend. As stated earlier, an increase in net worth — where, as in this case, there are no liabilities — presupposes that income was earned to the extent, at least, of the increase in net worth itself. So where and how did Mr Villar get the money?

* The increase in his net worth could not have come from the following:

a) The sale of real properties: he reported 6 in 2001-2006, with fair market value — by his own report in the SALN – of P4,012,760 (2006 SALN), and there are still 6 in his 2007-2008 SALN registered in his name alone. Moreover, as of 2008, his Real Properties included 32 “additional” parcels/pieces.

b) The sale of shares in his companies: shareholdings in the 5 companies he declared remained constant from 2001-2008; there was therefore no change.

c) Stock market transactions in quick deals; i.e, he bought and sold “short term” (could this have been margin trading?): if he had invested in the stock market, should he not have declared these investments in his SALN? Apart from his shares in the 5 companies and the club shares in various golf and country clubs, there were no other such investments declared. Assuming that he bought and sold in quick succession such that, as of the end of each year, he had no other shares than those he held in the 5 companies (hence, no other stock investments to declare in the SALN), could he have made so much on these deals without having first sunk in a significant investment so as to enable him to take such positions in the first place?

d) He could have also earned interest on his bank deposits but, given the level and nature of his declared Cash in Bank in 2007-2008 of less than P30M, the interest income could not have been that significant.

* So where was the increase coming from? In a newscast aired on 10 February 2010, he declared that the increase in his net worth came from dividends ( If so, these dividends (a sum of money paid to shareholders of a corporation out of company earnings) must have only come from the 5 companies he declared. Records obtained, however, indicate that, of these 5, only Fine Properties was reported to have declared dividends of P196,000,000 on 2 December 2006. This is certainly very far from the net increase in his net worth from 2001-2008 of P618 M+.

* Even assuming that his companies had in fact declared dividends, it would appear that they have not been paid out – hence the term “receivables.” This suggests that he does not have the funds on hand, and only has the expectation that these “receivables” will be converted into cash in due course. If so, how could he have over a billion pesos “of his own money,” which he has openly admitted to having spent on his campaign and that of the NP’s?

* In any case, regardless of the source of the increase in his net worth, should he not have paid income taxes on them? Did he in fact do so? Dividends constructively received by individuals are subject to a final tax of 10% of the gross amount, to be withheld by the corporation-declarant. Assuming that the P700M+ “receivables” are dividends, the withholding tax would be at least P70M. BIR insiders (who were apparently too apprehensive to go on record) have privately suggested that nothing near this amount has been paid in taxes, although this has yet to be verified. Still, as this is a matter of public interest, perhaps we could prevail upon Mr Villar to address these insinuations and clear his record once and for all?

* The considerations above strongly suggest that he may have deliberately “inflated” his net worth with the ingenious use of receivables to justify his widely-publicized wealth and the billions he is now spending on his campaign, which he continues to describe as “his own money.” When “hidden wealth” or “ill-gotten” gains are put through legal channels (like reporting them in the SALN) so they can “surface” as legitimate, can this be considered to be a case of money-laundering? In other words, did he make up those receivables to make it look like he had more assets than he actually did so he would therefore appear to be extremely wealthy, in the hopes that people wouldn’t look into how he has been able to finance what has arguably been the most expensive political campaign in Philippine history?

As far as this writer can see, there are only three possible conclusions one might make about his declared assets (what remains undeclared, of course, is another story entirely). Either my assessment is riddled with errors (in which case this also applies to the battery of financial and legal experts/scholars I have had to consult informally) or there’s something seriously amiss with his SALNs, in which case he could conceivably be accused of perjury. Otherwise, if my graver suspicions are correct, he could be accused instead of money-laundering. Either way, the implications make the mind reel, and the voter would do well to consider how this might affect the people in the long term (especially the poor, who have arguably lost out in terms of desperately-needed public services). We are after all no longer talking about opportunity cost here but about actual losses to the public purse at a time of serious economic recession; if, as a solon, Mr Villar was able to achieve more than a 1200% increase in his net worth in a span of five short years, what could happen to our entire social infrastructure if and when — perish the thought! — the man becomes President of this embattled republic? Perish the thought, indeed: unlike Dante’s inferno, which ultimately leads upwards into the light, MV’s concentric circles can only propel us towards a collective abyss from which we may barely recover.

A private postscript

Once upon a time — oh, 24-odd years ago, I think it was, when the unending grief of the Marcos era had finally begun to lift its thick and impenetrable shadow in a youthful clarion call to freedom — I carried with me a dream that the Philippines would one day be more than just another banana republic, teeming with warlords and armies, oligarchs and monopolies. As I peer yet again upon the threshold of history, the moment gives me pause, and I pray that our voters will be wise enough not to be taken in by glib and facile solutions or appealing personalities bereft of substance; I pray that we boldly defy dishonesty (even as that easy buck is unfailingly served up before us on a gleaming, silver platter) and instead consider sacred — no matter the personal cost — this country’s future and that of our children’s unborn children.


M B Villar:

— Campaign expenditures and personal finances:

— C5:

— Laurel mansion:

— Poverty: