THIS whole brouhaha over the Philippine Women’s University (PWU) and its basic education unit Jose Abad Santos Memorial School (JASMS) being taken over by businessman Eusebio Tanco and his STI started out as an emotional appeal in social media by the clan Benitez, the founding family of the former. They viewed it like Jollibee taking over Prince Albert. Indeed, how could a fastfood school company like STI take over a venerable educational institution like PWU and JASMS with its decades of quality education espoused by its founder Helena Benitez and passed on to generations of well known educators from the same gene pool?
Both sides have had a field day clarifying their positions over the past few days, the details of which can be gleaned from various media outings. Perhaps a reading of the following articles can provide enough detail for either side. This statement for the Benitez family as issued by Lyca Benitez-Brown, PWU Media:
Mr. Tanco wants TO USE THE PWU-JASMS’s real estate after he made his unreasonable demand for payment (P925M for a P448M loan). For the past 3 years Mr. Tanco DID NOT ASK FOR PAYMENT OF interest and penalties on his initial loan to PWU of P250M (PER THE TERMS OF AGREEMENTS). Now he wants 4x that amount in 7 days? THIS IS ONE REASON why the Benitez family and PWU are legally challenging his moves. In the words of Sen. Helena Z. Benitez: “PWU is not STI.”
On the other hand, here’s what the Tanco/ STI side has said, according to the report by the Philippine Daily Inquirer’s Doris Dumlao:
The STI group has vowed to invest “whatever amount is needed” to shore up the quality of PWU education and facilities.
“PWU has been in the decline in all respects. The main campus in Manila is a testament of neglect, with leaking roofs, flooding and poor laboratory facilities,” STI president Monico Jacob said.
He said PWU’s college student population had slid to 2,000 from a peak of more than 12,000 at one time which he cited as the major reason why PWU lost P115 million in 2009 and 2010, while net losses since the start of the school’s operations reached P374 million as of May 2010.
Jacob said it was only the bailout from STI that allowed PWU to continue operating and gave it a “healthier cash flow” moving forward.
To fulfill the students’ dreams of a better school and better education is the “bottom line of PWU’s legacy,” he said. “We have the resources and the expertise to succeed where the previous owners failed.”
If STI did not bail out PWU in November 2011 for failing to pay its bank loan, it would have been foreclosed, and the Benitezes would have been ousted, Jacob added.
He said the collateral was the school and its properties, including the JASMS (Jose Abad Santos Memorial School- PWU’s basic education arm) campus in Quezon City.
The Benitezes were also required by the bank to sign undated resignation letters as owners and board members that would take effect upon default.
“We bought the debt from the bank and became the creditor. So we helped the Benitez group keep control of PWU. But last month its key members asked for the rescission of its agreement with STI without offering to pay us a single centavo. Since they were actually in default with us just days after we bailed them out, we called in their resignations,” Jacob said.
But, as stipulation of facts go in any pretrial, it seems that both sides agree on this simple narration:
- PWU/ Benitez owed BDO Php250 Million
- The BDO loan was due and PWU was going into default.
- PWU borrowed P480 million from Tanco/ STI
- BDO was paid P250 million while the P230 million was, well, with PWU
- PWU is now in default with Tanco, the latter is calling in the loan.
Now the devil, of course, is in the details. Questions on what the loan terms are actually. Tanco has been quite straightforward in his claim: you owe, you pay. On the other hand clan Benitez has taken the stance: how dare you even think you can bully us with your money. Meanwhile, it is still unclear where the P230 million went.
The Benitez reasoning behind their efforts to keep control of PWU/ JASMS seems to be that education – quality education, that is – is a philanthropic venture. They seem to have forgotten, however, that philanthropy exists due to those who want to give to the cause. Perhaps that is how they started when the Benitez and Tirona families were in the top of Manila’s high society. But those fortunes are no more. (You can read about their heritage here)
And loans are not donations. They have to be paid back, most of the time with interest.
At this point it is hard to speculate what the real game plan of either the Benitez or Tanco sides are up to. For one thing, some have pointed out that key members of the Benitez family have been leeching from the schools because they simply have nothing to live on. Clan Benitez, on the other hand, charge that Tanco is just after the prime PWU and JASMS real estate and will turn them to – God forbid – malls.
But based on STI’s public pronouncements they plan to infuse as much capital as needed to make the schools profitable, so we’ll have to go with that as an assumption. And there is just so much positive experience with big moneybags taking over run down schools and turning around a profit, not to mention more educational opportunities kids and quality graduates.
In 1999 I had the privilege to work with Rene Evidente, then Executive Director of the organizing committee of the Pacific Economic Cooperation Conference held in Makati. PECC is an International tripartite body of the academe, government and business sectors which served as a precursor and main advisory body of APEC.
Evidente was formerly with the Yuchenco Group of Companies (RCBC, Malayan) and among those responsible for its purchase and takeover of Mapua Institute of Technology. From what I recall in our conversations they infused some P700 million in capital on top of what they purchased the school for. Today it remains a successful and profitable school.
Another friend and former associate Chito Salazar is head the PHINMA Education Network. Basically he brought the Del Rosario’s investment company into the lucrative world of education, first by acquiring Araullo University in Nueva Ecija then later purchasing and managing other schools in Cagayan De Oro and Baguio. As of August last year news was they were allocating another P3 Billion for more school acquisitions. (link)
By the way, Salazar was former president of STI.
Finally, there’s National University (NU), bought by Henry Sy’s SM. We don’t know how they’re faring academically, but they definitely displayed supremacy in bagging the basketball championship of the last UAAP season, away from the usual contenders Ateneo, La Salle and FEU. Definitely helps the Bulldogs that their home court is SM Mall of Asia Arena.
And it just isn’t limited to schools. Manuel V. Pangilinan is buying up hospitals and turning them around into profitable ventures. Apparently, doctors make the worst businessmen.
So no matter what other say about businessmen like Tanco taking over a so-called venerable institution like PWU/ JASMS, you have to admit it isn’t enough to have money, you have to know how to keep that money growing to stay alive. As Philstar’s Boo Chanco pointed out, it’s a financial management problem.
Nothing personal, just business.