“Enterprising” officials of the pension agency for government workers have hatched a scheme to rake in a few millions of pesos in the purchase of an insurance treaty from a reputable international insurance or reinsurance provider. The practice is meant to safeguard and earn from the insurance treaty duties to the country and pensioners.
Before 2016 came to a close, the Government Service Insurance System (GSIS) tendered its 2017 insurance treaty requirements to the market with a P375-million authorized budget cap (ABC). Here’s the rob/rub: Global markets and analysts priced and valued the treaty needed by GSIS at some P350 million only. That’s a P25-million excess over the true worth of the services needed.
No GSIS top official has come forward to explain the P25-million overprice. Not one offered a clue where the P25 million went or who gained from the overpricing.
This scheme has been one of the easiest sources of huge commissions for certain GSIS officials and their partners in the scheme (which had been ongoing under various administrations). A close look at the records over the years would show who were/are these favored partners in the scheme.
Obviously, this “practice” persists to this day. Unfortunately, for GSIS members—especially public-school teachers who constitute the bulk of the pension agency’s membership—and the government, the old syndicate members (insiders and their favored insurers) continue to lord over the entire process.
By giving out inadequate, if not thoroughly false, misleading or even garbage information to possible bidders, this syndicate has set into motion the laundering of commissions through adjustment payments, i.e., the “favored” insurer(s) will have the chance to collect additional fees since they can claim that the data and related items contained in the terms and conditions of the bid were inaccurate, inadequate, misplaced, etc.
On November 29, despite unanswered queries about its flawed bidding data and rules, GSIS bid out the 2018 insurance treaty. The usual excessive pricing: the 2018 authorized budget cap is P450 million, while analysts and the markets are saying that the coverage needed is only P350 million. The fatty excess of P100 million can likely grease certain people’s pockets.
Only three prospective bidders have turned up and “shown interest”: a) Federal Phoenix (part of the Zuellig Group) that used to employ the current GSIS SVP for insurance, Atty. Maria Obdulia V. Palanca; b) Pioneer Insurance (a new entrant), one of whose senior executives is Atty. Betty Medialdea, the wife of Executive Secretary Salvador Medialdea; and c) Prudential Guarantee, owned by Robert Coyuito, who was recently appointed presidential adviser on capital markets.
Then again, there exists a provision in all government tender documents that allows the procuring entity to stop and cancel the bidding process at anytime—without penalty. Or, simply accept the market’s verdict and work within the limits imposed by it.
Given the market’s rejection of GSIS officials’ folly, (the market held its ground on a realistic P350-million appraisal vs. a bloated P450-million ABC trotted out by GSIS ex-chairman Francisco Duque III-led operatives) will GSIS calmly accept the market verdict even if it means a cool P100-million “lost revenue” to the manipulators?
Or, will it reject what the market prescribes and consider another bid? Or, worse, rechannel the programmed P100-million overprice to some other “activity”?
Will the GSIS board, sans Duque, have the courage to initiate an investigation into this aborted mess to ensure the proper usage of government funds?
Millions of public-school teachers are waiting for answers—their hard-earned money is at stake.
E-mail: ernhil@yahoo.com.