By Adolfo Quizon Paglinawan

 

Part 5: Is it worth saving an incompetent and corrupt President?

Francis Lim, chairman of the Securities and Exchange Commission, in a speech before the Financial Executives Institute of the Philippines last October 7 said a decline of P1 trillion in apparent stock market valuation occurred last August 11 to 29.

This revelation sent Malacanang into panic driving it into damage control that the claim was “fictitious”. Two days after the Philippine Stock Exchange said in a separate statement that only P185 billion in market capitalization was lost during the three-week period.”

Lim said that the figure was “based on what I believed at the time to be a credible industry report. He however apologized” “I deeply regret any confusion or concern that my statement may have caused. My sole intent was to underscore the vital importance of integrity in our markets and the devastating impact corruption can have on investor confidence.”

But the SEC erratum was also cautious as it assured the public that it is “firmly committed to promoting transparency, good governance and investor protection.”

“That being said, PSE president and CEO Ramon Monzon issued a rejoinder that SEC Chairman Lim was correct in assailing the level of corruption in the country, and its adverse effects on the economy and financial markets.” So, whether it was P1.7 trillion or P185 billion, what finally surfaced as the truth is secret the Palace has been hiding – that the stock market has been struggling since last year and the much-ballyhooed foreign investors President Ferdinand Marcos Jr. has been crowing about since he started his foreign trips, have not been coming.

Cora Guidote, former head of the Bangko Sentral ng Pilipinas (BSP) Investor Relations Office, sets the record straight:

“Allow me to correct the market cap numbers that I mentioned in the previous post. I initially got them from Grok AI because the market cap history is not readily available online. Only select dates are available.

Using a ₱57-to-the-dollar exchange rate, as some figures were in U.S. dollars, she added: “So I went back to Grok and sought the data sources. The numbers are different and more realistic but the trends are the same and the drop in market cap are in fact larger from December 2024.

“This time, Grok cited its sources:

“Dec 2024 Market Cap USD350 or approx Php19.9 trillion Source: pse.com.ph

“February 2025 Market Cap USD325 or approx Php18.5 trillion Source: ceic.com

“No available data for September.

“October 9, 2025 Market Cap USD260.9 or approx Php14.9 trillion Source: tradinghours.com

“(I used forex rate of Php57:USD1 for all mkt cap numbers since sources expressed them in USD.)

“Given these data, the Phisix market cap actually dropped by Php5 trillion from December 2024 to October (ten months) with Php3.6 trillion of which from February to October (eight months)

“These numbers are in fact much larger than what was formerly cited.

“Although, if one looks at the index performance in the last 3 weeks the Php1.7 trillion loss may not be that farfetched.

“They are also in line with the index performance which peaked late last year.”

“As usual, Malacañang is lying,” Guidote said.
The securities expert gave this prognosis: “Hard to see any recovery in sight. The index will most likely decline further or flatline at the least given the political uncertainty and the long-term economic impact of the exposed massive corruption.”

Guidote was tapped to head the Investor Relations Office during the Arroyo administration, bringing with her over 15 years of capital markets experience. She previously served as Chief Operating Officer of ABN AMRO Securities and led Philippine equities at UBS Securities (East Asia) Ltd.

Her career spans senior roles at Citibank N.A., Peregrine Securities, Vickers da Costa Philippines, and Barclays de Zoete Wedd, with a strong background in securities research, institutional sales, and investment marketing.

No less than Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona has reiterated concerns over the impact of an ongoing corruption scandal on economic growth, warning of a slowdown that could extend well into next year.

A day earlier, monetary authorities bucked market expectations and delivered a fourth straight 25-basis point rate cut despite a benign inflation outlook. The economy’s growth prospects, however, were said to have weakened.

“This outlook reflects in part the impact on business confidence of governance concerns about public infrastructure spending,” the BSP asserted adding that “indications of moderating demand also reflect lingering uncertainty from the external environment.”

The Manila Times reported Remolona said that monetary authorities had observed a decline in the stock market and that fewer firms were planning to expand, which factored in a rate cut decision last October 9. The Securities and Exchange Commission chief earlier in the week said that corruption had led to a P1.7-trillion wipeout, a claim taken back after the Palace said the figure was “fake news.”

While the extent of the decline may have been exaggerated, analysts have pointed to corruption worries as having weighed on the benchmark Philippine Stock Exchange index, which has fallen by 7.52 percent since the start of the year, but as Guidote revealed P5 trillion since 2004.

Remolona said government spending could slow for six months as the government tries to address the corruption issue, which will likely lead to an economic slowdown that may last for two or three quarters. He was hopeful, however, that growth could accelerate by “more than just a catch-up” once state spending recovers.

The BSP previously said that August’s easing to 5.0 percent could be the last with the rate at a “sweet spot.” This “Goldilocks” level has since been adjusted to between 4.0 to 4.0 percent, Remolona said.

Asked to elaborate on the “credible resolution” that he said on Thursday was needed to address corruption, he said that “people” should be “heavily penalized.”

The government is working to address the matter, Remolona also said, which gives monetary authorities confidence that economic growth will be able to recover by 2027 or sooner.

Internal and external stress

This is the reason why all of a sudden after three years of stupor, we see the beleaguered president working to create a miasma of action visiting infrastructure projects here and there, moving cabinet levels, creating powerless commissions like the Investigative Commission on Infrastructure and mobilizing both its propaganda machinery among the Presidential Communications Office and its allied oligarchic media to high engagement levels.

Political pressure affecting Malacanang can be felt even outside the walls of the executive branch.

The noisy Senate leadership has been replaced from an independent-looking Francis Escudero to a Palace puppy the social media has tagged as “TutaSen”. The chairmanship of the Blue-Ribbon Committee has been moved from a highly aggressive Rodante Marcoleta who is a lawyer to Panfilo Lacson a former policeman.

Lacson’s chair started shaking, however, even before earthquakes hit Cebu and Davao, because he allowed his policeman’s puny reflex to put more emphasis on questioning a document, rather than putting weight on the fact that a witness has already read his testimony and has amplified over it with answers to questions under a hearing where he has again been sworn to tell the truth, the whole truth and nothing but the truth. The former police chief put more weight on the credibility of the notarization process (form) rather than on the probity of the information that has been spoken for in person and also under oath (substance)

Attacked by social media by putting more value to notary public, a certain Atty. Espera who is even rumored to be an employee of the Bureau of Jail Management and Penology, rather than to the oral testimony of Retired Marine Sergeant Orly Regala Guteza that has been tested by an interpellation by the Senators, a question-and-answer session that was even hostile, Lacson showed his incompetence to head the Blue Ribbon Committee.

Worse, when pushed to the wall to obscure Guteza’s damning revelation that deliveries were made to Speaker Martin Romualdez’s residence at Aguado Street, opposite Malacañang and allegedly having an underground tunnel across Jose P. Laurel Street to palace premises, Lacson recklessly indicted his fellow senators for having made insertions of around P3 billion each in the 2025 national budget.

As of this writing Lacson has resigned and his replacement remains uncertain.

This is most important to the national interest because it is only the Blue-Ribbon Committee who has the power to summon executive and legislative officials, as well as private citizens, to testify before it, and to conduct investigations motu proprio (on its own initiative) into malfeasance, misfeasance, and nonfeasance in office by government officials and agencies. This allows it to investigate any matter of public interest, not just those referred to it, and issue its own subpoenas (to including private individuals) and hold witnesses in contempt if they fail to cooperate, acting as a powerful check on government accountability. 

            The ICI is just an investigative body who cannot even compel suspects and witnesses to appear before it. Its findings are only recommendatory and subject to the Constitutional powers vested in the Office of the Ombudsman.

            The Ombudsman’s powers also cannot cover legislators, and has limitations over private parties.

            The House Committee on Good Government and its other committees, such as the InfraCom, has already been discredited as covering up for its former Speaker.

            The tipping point in the investigations ordered by the President is the emasculation of the Blue-Ribbon Committee. If for any reason the independence of the Blue-Ribbon Committee is lessened due to manipulation of Malacañang, the whole credibility of any action of the President arriving at the truth, the whole truth and nothing but the truth, crashes.

            The President himself is not only suspect but is being touted to be the “mastermind” of this entire economic sabotage.

Smoking gun

            Legal luminaries, otherwise friendly to the presidency, like former associate justice Antonio Carpio and former Ombudsman Conchita Carpio-Morales have pointed at his signing into law the 2025 General Appropriations Act as the “smoking gun”.

            Last September 19, Carpio submits that Marcos’ failure to veto the entire P450 billion anomalous insertions, that has already been yellow-flagged by overt public opposition, means that he owned up to the ultimate responsibility for the remaining P421 billion. “His veto on only P29 billion is just a window dressing. He cannot escape liability because he could have vetoed the entire amount, but did not.”

            I have consulted many lawyers who aid that this is an impeachable offense for betrayal of public trust. The people are waiting for Congressmen Kiko Barzaga and Isidro Ungab to file the necessary impeachment case against the against Marcos. (By the way, just for a footnote – Reginald Velaso has already resigned a secretary-general of the Lower House and replaced by Cheloy Velicaria-Garafil as Secretary General.)

In her interview with Karen Davila, former Ombudsman Carpio-Morales, slammed the lack of transparency in the Independent Commission for Infrastructure while saying the mere fact that Congress or Senate conducts hearings openly, it is not trying by publicity.

She says transparency, not secrecy, should be the norm in the corruption probes.

“I cannot be optimistic because these hearings are supposed to be held in secrecy. They don’t involve the public. I don’t understand why, because even the courts, sitting as courts, is open to the public. It’s only when in the interest of morality and decency that the judge may conduct hearings in private.

“Because people who will decide will be the ICI people, but their decision will only be recommendatory. It should be the Ombudsman really who should do the investigating.”

Davila’s video cites that Carpio Morales was also unimpressed with the President’s vow that no one will be spared in the flood control investigation.

“I won’t even give him the benefit of the doubt, because there had been some instances where he had said something, but he did not comply with it, or he welts on his promise. That’s just the trouble if you are a president who does not have immaculate background. People could hardly give you the benefit of the doubt.”

            Encyclopaedia Brittanica best describes our situation.

            A failed state is composed of feeble and flawed institutions. Often, the executive barely functions, while the legislature, bureaucracy and armed forces have lost their capacity and professional independence. It suffers from crumbling infrastructures, faltering utility supplies and educational and health facilities, and deteriorating basic human-development indicators, such as infant mortality and literacy rates.

Failed states create an environment of flourishing corruption and negative growth rates, where honest economic activity cannot flourish.

The only saving graces remaining is a functioning judiciary and strong financial fundamentals turned over by President Rodrigo Duterte to his successor – a growth in the Gross National Product that peaked in 2022 to an annual 7.6%.

But this too has been anticipated to sink by two points to 5.6% by the Asian Development Bank. #

To be continued

   

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