MANILA, Philippines—A measly P400 per semester.

This is what most of the 700,000 plan holders of the College Assurance Plan Philippines Inc. (CAP) have been getting under the rehabilitation program approved by the court since the pre-need company sought a financial bailout five years ago.

The P400 per semester is less than half of the P855.20 average cost per unit in Metro Manila’s top universities and colleges, according to the National Union of Students of the Philippines (NUSP). A typical semester has 21 units or 3 units per subject.

Parañaque Rep. Roilo Golez said he was “aghast” at the measly sum being given to the plan holders based on their testimony in Monday’s congressional hearing on the state of the pre-need industry.

“I can feel their frustration, [the people] they expected to help have failed them. It’s like they were being dribbled like a ball until they gave up,” Golez told reporters.

Turned away by SEC

According to Chit Baita, president of the group of CAP plan holders, CAP has been giving them as little as P400 per semester in the past years as part of the rehabilitation program.

Baita said they were opposed to the rehabilitation program because it allowed CAP to ignore their demands for an immediate refund of their premiums so they could send their children to school.

She claimed they had sought help from the Securities and Exchange Commission (SEC) but they were repeatedly turned away by SEC chair Fe Barin, who claimed it was out of their hands as the matter was under court jurisdiction.

Baita revealed that while plan holders were getting a measly compensation of P400 per semester, the court-appointed receiver had approved the sale of $9-million worth of Mass Rail Transit (MRT) bonds in CAP’s trust fund to pay off companies owned by the pre-need firm’s owners, the Sobrepeña family.

Fraud or estafa?

Golez questioned why the receiver, Mamerto Marcelo, would agree to sell off bonds in CAP’s trust fund when it had not paid off the claims of its plan holders.

Nueva Vizcaya Rep. Carlos Padilla asked SEC’s Barin whether this was allowed under the regulations on pre-need companies but the senior official could not give an immediate answer, claiming she had to review the matter first.

Padilla said the SEC should determine whether CAP was guilty of fraud or syndicated estafa when it used its trust funds for the benefit of a related company.

Golez said the SEC should have acted with more initiative in dealing with the CAP plan holders as they depended on the agency to protect their interests.

The lawmaker was also irked that Marcelo snubbed Monday’s hearing which, Golez said, showed the receiver’s lack of compassion for the plan holders.

Equitable scheme

In an interview Monday, Marcelo defended CAP’s rehabilitation plan, saying it was the most equitable scheme for plan holders.

He said the criticisms CAP received from the congressmen should be “put in perspective.”

“The plan was approved in November 2006 and we have so far paid out over P200 million [to plan holders],” Marcelo said.

He conceded, however, that not all CAP plan holders were happy with the scheme, especially those who availed themselves of policies meant to pay for matriculation in exclusive schools.

“They will be the hardest hit,” Marcelo said, adding that plan holders for matriculation in nonexclusive schools and state colleges were expected to recoup more of their initial investments.

“This plan has been approved by the court and we are following it very faithfully,” he said.

26,000 checks

Marcelo said he was not amenable to accelerating asset sales just to meet short-term financial gains since this would mean losing the chance to sell them at better prices in the future.

“If they say ‘let us liquidate,’ buyers will get the properties for a song,” he said. “That’s the worst thing that can happen.”

To date, according to Marcelo, there are 26,000 checks worth about P22 million that have yet to be claimed by plan holders.

He said CAP had about 400,000 plan holders eligible for compensation under the rehabilitation scheme, down from 700,000 after he asked the firm’s officials to “clean up” the list of ineligible claimants.