Marketing phantasma
By Abdel Aziz Dimapunong
Founding chairman, Amanah Islamic Bank
Students of marketing must be familiar with the term “Marketing Myopia” by Theodore Levitt. According to Wikipedia, it is in indeed one of the most important papers ever written. This paper was published in the Harvard Business Review, a journal of which Levitt was an editor. Wikipedia says that commentators have even gone as far as to suggest that its publication marked the beginning of modern marketing.
I have read Marketing Myopia while taking an MBA course at the Asian Institute of Management. Until now, Levitt’s Marketing Myopia sticks in my mind.
Myopia was derived from the fact that the vision of most organizations in the past was constricted in terms of what they narrowly saw as the business they were in. In the past, managers of the railroad industry saw themselves as confined only to the railroad industry instead being actually in the transportation industry. This was also true in the radio industry which actually belongs to the communication industry.
Levitt exhorted CEOs to re-examine their corporate perspective to properly define their markets in terms of wider vision.
Today, the result of looking at business in the wider perspective is seen in the popular Information Technology. Radio is here via the Internet. The TV industry is here through You Tube, Google and others. Communication is here via email facilities including Yahoo, Gmail and so many others. Virtually all software programs are within the sphere of the IT.
However, to some sectors, it seems that the lessons in Marketing Myopia is overly extended to the point of fantasy by adopting the widest and wildest perspectives that include those in the lost horizon of Shangri-la and those prohibited by the blue sky law.
While making an analysis of the circumstances that are the subjects of my write up on the propose sale of 9 million shares of the Amanah Bank, I am convinced that what could be happening may be termed as marketing phantasma. It is characterized by fantastic imagery and incongruous juxtapositions. This is the case of chunking the abolished Philippine Amanah Bank with the new existing Amanah Islamic Bank. It is the more complicated imagery when their respective shares of stocks are chunk together in juxtapositions.
Last April 22, I wrote and posted my article about the shares of stocks which are now on sale by the Privatization Management Office (PMO) under the Department of Finance. The original Islamic Bank now calls this office as Phantasmagoric Management Office (PMO). Most of the shares on sale are wrongfully identified by the PMO as shares of stocks of the Amanah Islamic Bank.
Grande Dianaton, the incumbent chairman of the existing original Amanah Islamic Bank calls those shares the carcass of the defunct Philippine Amanah Bank.
The confusion about the abolished Philippine Bank and the existing Amanah Islamic Bank is a serious matter to the existing stockholders of the existing Islamic Bank. What is happening to the shares of stocks that they own? Are these shares the subject of the forthcoming bidding by the PMO on May 21, 2007? Many stockholders and investors frantically called me about the PMO and its wildest idea of selling shares that belong to them.
All the confusion started last Tuesday, April 3, 2007, when Mr. Guillermo Hernandez Chief Privatization Officer of the Privatization Management Office ran an advertisement on the Philippine Star about selling the shares of the Amanah Islamic Bank. The PMO invites all interested parties to participate in the bidding of nine million (9,000,000) issued and unissued shares of stocks of AIIBP at a minimum bid price of P900 million, representing 90% of the authorized capital stock of the bank.
The announcement of bidding was properly timed. It came out just the day after Saudi Prince Alwaleed bin Talal bin Abdulaziz Alsaud arrived at Villamor Air Base. He arrived on his private jet and he left right after a dinner with Her Excellency President Macapagal Arroyo at the
Obviously, the target of the bidding announcement was the Saudi Prince who happens to be the thirteenth richest man in the world.
The President also said that the Saudi prince wanted to put up hotel resorts in the
The President suggested to the Saudi Prince areas in the Visayas, Bicol,
It is said that Prince Alwaleed is worth over $20 billion. The US-educated prince, 50, is a nephew of
Alwaleed arrived at Villamor Air Base Tuesday evening on his private jet and left right after the Malacañang dinner.
After having posted my article on the announced sale of shares of the Islamic Bank by the PMO, I sent a link to many stockholders of the Amanah Islamic Bank. In turn, they sent email replies and most of them asked me information about the PMO, its creation, duties and powers.
Even when issues are brought to the court, I had been frequently asked to give my statement as among the founders of the bank. The issue on sales of shares of the Amanah Islamic Bank is understandable because there have been so many parties who wish to buy and own the bank. Those of them who have no means and no way to own a part of the Islamic Bank resort to dirty politics. This is also understandable because the Amanah Islamic Bank is basically a political bank having been established by politicians like the late Senator Mamintal A. Tamano, the late Speaker of the House of Representatives, Ramon Mitra, former Congressman Michael Mastura, and the former President of the
The Islamic Bank is coveted by many Muslims not only in the
As a founding chairman, I stand witness to the ownership of the Islamic Bank by those who invested in the Islamic Bank from 1992 t0 1998. These were made by subscribing to the shares of the bank in the manner prescribed by the charter of the Islamic Bank, Republic Act No. 6848. This is the special law that governs the ownership of the Islamic Bank, as provided for by this law (enacted in 1999) and as recently updated by the new General Banking Act of 2000.
The background of privatization in the
Before the fall of President Ferdinand Marcos, he issued two successive Presidential Decrees, PD 2029 and PD 2030. These two Decrees declared privatization as a matter of national policy. Privatization was actually an implementation of the Structural Adjustment Program that was imposed by the International Monetary Fund and the World Bank.
On February 1986, President Cory Aquino succeeded Marcos by the popular people power. Aquino pursued vigorously the implementation of the privatization laws. In addition to PDs No. 2029 and 2030, Aquino signed into law Proclamation No. 50, creating the Committee on Privatization (COP) and the Assets Privatization Trust (APT) to administer the implementation of privatization.
In 1989, the Congress of the
In 1998, Executive Order No. 12 was issued and reaffirmed the privatization policy of the Government by encouraging all heads of departments, bureaus, agencies and instrumentalities including government owned and controlled corporations to identify assets and activities that can be efficiently and effectively undertaken by the private sector; by broadening the coverage of privatization activities with the inclusion of some authorities such as Bases Conversion and Development Authority (BCDA), Public Estates Authority (PEA), Philippine Tourism Authority (PTA), Philippine Economic Zone Authority (PEZA) and Subic Bay Metropolitan Authority (SBMA).
Executive Order No. 12 also directed the COP to consider other alternative modes of privatization such as leasing, management and maintenance contracts, BOT schemes or joint venture arrangements.
Pursuant to Republic Act No. 8758 (1999), the life of the Committee on Privatization (COP) and the Asset Privatization Trust (APT) expired on December 31, 2000. Republic Act No. 8758 provided that, “All assets held by the Asset Privatization Trust, all moneys and other properties belonging to it, and all its liabilities outstanding upon the expiration of its term shall revert to and be assumed by the National Government”. Republic Act No. 8758 mandated the transfer for disposition of the assets held by the APT by the President of the Philippines to the trust department of the appropriate government agency upon the expiration of the term of APT.
As of December 2001, there were remaining partially sold and undisposed accounts approved for privatization consisting of 150 transferred assets, of which 88 are partially sold and 62 are still undisposed, 57 government-owned and controlled corporations, of which 31 have been partially sold and 26 are still undisposed. This includes the government shareholdings in the abolished Philippine Amanah Bank.
The abolished Philippine Amanah Bank was created by the Marcos Administration under Presidential Decree No. 264. On the other hand, the Amanah Islamic Bank was created by the Aquino Administration with a special law known as the charter of the Al Amanah Islamic Investment Bank of the
The Philippine Amanah Bank does not exist anymore. It follows that it has no existing shares that can be legally sold. It follows; therefore that the Privatization Management Office is selling 9 million NON-EXISTING SHARES for a price of Pesos 900 million, as advertised.
So what do I say to the private stockholders who own the Islamic Bank? I say: keep your cool. The Saudi Prince, 50, with western education in the
Below is a copy of Executive Order No. 323 that created the PMO.
MALACAÑANG
BY THE PRESIDENT OF THE
EXECUTIVE ORDER NO. 323
CONSTITUTING AN INTER-AGENCY PRIVATIZATION COUNCIL (PC) AND
CREATING A PRIVATIZATION AND MANAGEMENT OFFICE (PMO)
UNDER THE DEPARTMENT OF FINANCE FOR THE CONTINUING PRIVATIZATION OF GOVERNMENT ASSETS AND CORPORATIONS
Whereas, pursuant to Republic Act No. 8758 s. 1999, the life of the Committee on Privatization (COP) and the Asset Privatization Trust (APT) will expire on December 31, 2000.
Whereas, Republic Act No. 8758 provided that, “All assets held by the Asset Privatization Trust, all moneys and other properties belonging to it, and all its liabilities outstanding upon the expiration of its term shall revert to and be assumed by the National Government”.
Whereas, Republic Act No. 8758 mandated the transfer for disposition of the assets held by the APT by the President of the Philippines to the trust department of the appropriate government agency upon the expiration of the term of APT;
Whereas, Executive Order No. 12, s. 1998 reaffirmed the privatization policy of the Government by encouraging all heads of departments, bureaus, agencies and instrumentalities including government owned and controlled corporations to identify assets and activities that can be efficiently and effectively undertaken by the private sector; by broadening the coverage of privatization activities with the inclusion of some authorities such as Bases Conversion and Development Authority (BCDA), Public Estates Authority (PEA), Philippine Tourism Authority (PTA), Philippine Economic Zone Authority (PEZA) and Subic Bay Metropolitan Authority (SBMA); and by directing the COP to consider other alternative modes of privatization such as leasing, management and maintenance contracts, BOT schemes or joint venture arrangements;
Whereas, under the Constitution and under the Administrative Code of 1987, the President, as Chief Executive, has control and supervision over, and the authority to reorganize, the Executive Branch of the Government, including the Office of the President;
Whereas, the Government’s privatization program has proven beneficial and helpful to the economy in terms of generating revenues, improving investment climate, attracting foreign capital and investments, broadening ownership base, developing capital markets and fostering private sector participation;
Whereas, there are remaining partially sold and undisposed accounts approved for privatization consisting of 150 transferred assets, of which 88 are partially sold and 62 are still undisposed, 57 government owned and controlled corporations, of which 31 have been partially sold and 26 are still undisposed, and several surrendered properties with sizeable amount of projected revenues for the much-needed resources of the Government;
Whereas, there is a vast opportunity for greater private sector participation in the development of the Philippine economy with the successful launching of Government’s PROGRESS Bonds and the pending enactment by Congress of the bill restructuring of the power industry and privatizing the National Power Corporation;
NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the
Section 1. Restatement of Policy. The National Government hereby restates its privatization policy to promote an orderly, coordinated and efficient privatization of remaining government corporations, assets, activities and idle properties which have been identified as unnecessary and inappropriate for the government sector to maintain.
Article II. The Privatization Council
Section 1. Organization. There is hereby established a Privatization Council (PC), referred to as the “Council”, to oversee the privatization program of the Government.
Section 2. Composition. The Council shall be composed of the Secretary of Finance as Chairman, with the Secretary of Budget and Management, Trade and Industry, National Economic and Development Authority and Justice as members. The National Treasurer and the Chairman of the Presidential Commission on Good Government shall be non-voting members of the Council. The Technical Committee shall also be established to be composed of the representative of the Department of Finance as Chairman, and representatives of the Department of Justice, Department of Budget and Management, Department of Trade and Industry, National Economic Development Authority, Bureau of Treasury and the PCGG, as members.
Section 3. Objectives, Powers and Functions. The Council shall direct, supervise and coordinate all privatization and similar disposition efforts undertaken by the Government in order to promote private sector participation in developing the Philippine economy and to generate maximum cash recovery for the National Government. In pursuit of these objectives, the Council shall assume all the powers, functions, duties and responsibilities, all properties, real or personal assets, equipment and records, as well as the obligations and liabilities previously held or exercised by the COP under Proclamation No. 50, as amended, which have been devolved to the National Government pursuant to Republic Act No. 8758.
Section 4. Meetings. The Council shall meet at least twice a month, or as frequently as necessary to effectively discharge its functions and responsibilities and expedite the disposition of GOCCs, assets, activities and other government properties. The presence of the majority of the voting members shall constitute a quorum and the concurrence of said majority should be adequate for any decision of the Council: Provided, that were a disposition or rehabilitation proposal is involved, the decision of the Council must be unanimous. In case they are unable to attend, the Chairman and Members may designate any of their immediate subordinates with the rank of Undersecretary or its equivalent to represent them in the meetings of the Council. The Council shall act on any recommendation for disposition not later than thirty (30) days from the date of its submission to the Council.
Section 5. Legal Counsel. The Secretary of Justice shall be the ex-officio adviser to the Council on legal matters. Section 6. Funding. The Council shall be provided with an initial budget of Ten Million Pesos (P10, 000,000.00) to be drawn from the Organizational Adjustment Fund. Appropriations for the succeeding years shall be incorporated in the budget proposal for the Office of the President.
Article III. Privatization and Management Office
Section 1. Organization – There is hereby organized under the Department of Finance an Office called Privatization and Management Office (PMO), hereinafter referred to as the “Office”. The Office shall be headed by a Chief Privatization Officer (CPO) who shall be appointed by the President of the
Section 2. Powers and Functions. In addition to the powers, duties and functions under Proclamation No. 50, as amended, the Office shall be empowered to implement the actual marketing/disposition program of the government corporations, assets and idle properties after securing prior approval of the Council, to execute and deliver, on behalf of the National Government, the deeds of sale, contracts and other instruments as may be necessary or appropriate to convey title to such assets, to take title to and possession and conserve assets transferred to it, to engage external expertise as necessary in the fulfillment of its tasks, to adopt internal rules and regulations and to submit periodic reports to the Council on the status of the disposition program.
Any and all sales and other modes of privatization or disposition shall not be considered final unless and until approved by the Council. All receipts from the sale of assets of the Office, except portions thereof for reimbursable custodianship and/or operational expenses, shall be remitted to the National Treasury.
Section 3. Powers and Functions of the CPO. The CPO shall have the following powers and functions.
1. To enter into management and other contracts as may be appropriate; and
2. To develop the staffing requirements of the Office, and for this purpose, appoint, remove and fix the remuneration of the personnel of the Office: Provided, That as far as practicable, the CPO should rely on secondment from government entities undertaking related functions, and or qualified external expertise in an advisory capacity and on a contractual basis.
Section 4. Qualifications. No personal shall be appointed an Officer unless he or she is of good moral character, of unquestionable integrity and responsibility, and of recognized business competence. No person, or director, officer, consultant or stockholder of corporations constituting or having any interest in the assets assigned to the Office may be appointed as an Officer.
Section 5. Internal Guidelines. The Office, through its Chief Privatization Officer, may adopt and implement such internal rules and regulations necessary or convenient for the proper discharge of the functions of the Office. Provided, That such internal rules and regulations must be in accordance with existing laws, orders, decrees and proclamations. Provided further, That such rules and regulations may be subsequently amended, abrogated or disapproved by the Secretary of Finance.
Section 6. Funding. The Office shall be provided with an initial budget of Thirty Million Pesos (P30, 000,000.00) to be drawn from the Organizational Adjustment Fund. The Office shall be allowed to retain commissions, due diligence fees and proceeds from the sale of Asset Bidding Rules, information memoranda and similar documents, as well as a portion or percentage of proceeds from disposition efforts, not to exceed ten percent (10%), to be approved by the Council to maintain a revolving fund to be utilized for the payment of fees and reimbursable expenses and of the costs and expenses incurred by the Office in the conservation and disposition of the assets held by it or in the performance of its other responsibilities under this Executive Order. Appropriations for the succeeding year shall be incorporated in the budget proposal for the Department of Finance.
Article IV. Operational Provisions
Section 1. Transfer of Assets. Pursuant to the provisions of Republic Act No. 8758, the financial assets of APT shall be transferred for disposition by the President to a trust department of the Land Bank of the
Section 2. Utilization of Proceeds. Upon the effectivity of this Executive Order, all receipts from the sale of assets shall be remitted to the National Treasury in the following proportion: sixty percent (60%) to the special account of the Agrarian Reform Fund and forty percent (40%) to the general fund: Provided further, That except for the subsidiaries of the Government Service Insurance System and the Social Security System, all government owned and controlled corporations shall remit to the National Treasury at least fifty percent (50%) of the net proceeds derived from the sale of shares or assets effective October 1, 1992. Provided further that the net proceeds shall mean gross proceeds less related liabilities and selling expenses as stipulated in the provisions of Republic Act No. 7661.
Section 3.
Article V. Miscellaneous Provisions
Section 1. Separability Clause – Any portion or provision of this Executive Order that may be declared unconstitutional or invalid shall not have the effect of the nullifying the other provisions thereof: Provided, That the remaining portions can still stand and be given effect in their entirety to accomplish the objectives of this Order.
Section 2. Repealing Clause – All executive orders, rules and regulations and other issuances or parts thereof that are inconsistent with the provisions of this Executive Order are hereby repealed and modified accordingly.
Section 3. Effectivity – This Executive Order shall take effect upon publication but not earlier than January 1, 2001.
DONE in the City of
(Sgd.) JOSEPH EJERCITO ESTRADA
President
Republic of the
By the President:
(Sgd.) RONALDO B. ZAMORA
Executive Secretary
No comments:
Post a Comment