PEP Coalition

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Drilon, Robredo can’t run for Senate yet

(excerpt taken only)

By Neal Cruz, As I See It
Philippine Daily Inquirer
First Posted 00:05:00 01/23/2009

The Yuchengcos have dumped the ailing Pacific Plans Inc. (PPI) on the lap of a white knight, in the person of investment banker and former airline owner Noel Oñate. The latter bought PPI for P250 million. Thus, the Yuchengcos gained P250 million while at the same time getting rid of the pesky pre-need holders who have sued them for nonpayment of their claims.

The pre-need industry used to be a growth industry. Its basic premise is that you pay now, in installments, what you will need to pay for future obligations, whether it is for education, memorial or pension. It is like forced savings: You save now what you will need in the future. In exchange, the pre-need company guarantees that it will pay your claim at the time you need it.

This went beautifully until the Department of Education lifted the limits to tuition increases. Like insurance companies, pre-need firms rely on actuarial computations to determine how much money they will need in the future. This was fine for as long as the schools limited their tuition increases to 10 percent as prescribed by law.

When this limit was lifted and the increases hit the roof, trouble began for the education plans of pre-need companies. They couldn’t keep up with the payments. The plan-holders, on the other hand, insisted that they pay the amounts guaranteed in their plans.

The memorial, pension and fixed-value educational plans were not affected, however. The Yuchengcos tried to protect these viable plans by putting them in a separate company, Lifetime Plans Inc. but was ordered to fold them back with the affected educational plans.

Burdened once more by unlimited tuition increases, PPI sought and obtained court rehabilitation. Meanwhile, the plan-holders were not paid the claims for the tuition fees of their children. Everybody was a loser.

Then came the white knight. Oñate seems to be a miracle worker. He started Asian Spirit Airlines in 1995 with only two small planes serving missionary routes in the country to become a competitive international airline serving the region. He sold it last year as the country’s fourth largest air carrier, for P1 billion, to AMY Holdings of businessman Alfredo Yao, owner of juice maker Zest-O. The airline has been renamed Zest Air.

Oñate pledged to abide by the rehabilitation plan for PPI. It is business as usual, he said. Plan-holders will be served by existing PPI branches nationwide until further notice.

PPI president Alfredo Non said: “There were other parties interested in PPI but the group of Mr. Onate was chosen, given his track record of success, his strong financial standing, and his vision for the company and its plan-holders.

“The sale was a business decision that will benefit all parties: PPI and its plan-holders, because Mr. Oñate has promised his full resources, energy and focus on his new venture; and the Yuchengco group, which can now fully focus on its banking and mainstream insurance businesses.”

As I see it, the acquisition of PPI by Oñate is the silver lining on the depressed pre-need industry. In fact, it was welcomed by the Securities and Exchange Commission.

Abundance Providers Investment Corp. (APIC), Oñate’s company that bought PPI, will take over control and management of PPI and will continue to sell and service its education, pension and memorial plans. It will also service the PEPTrads based on the provisions of the court-approved Modified Rehabilitation Plan.

Why is Oñate getting into the pre-need business when it is on the brink of a crisis? The answer of his camp: Oñate is a pioneering entrepreneur. He sees opportunity in adversity.

His move to establish Asian Spirit and service missionary routes were scoffed at in the beginning. More established airlines did not find these routes profitable. This business model proved successful and was later copied by other successful budget airlines. This is the same pioneering spirit that drives him to take on the challenges in the pre-need industry. Oñate thinks that given enough time the market will recover and the pre-need industry will survive the problems besetting it now.


January 23, 2009 - Posted by | Columns and Editorials | , , , ,


  1. I am a plan holder of pacific pension plans which eventually was transferred to Lifetime plans inc. My plan will mature in 2019. May i know what has been happening? Is Mr Noel Onate still n top of this? Are there options for earlier availment? I would appreciate your kind reply.

    Comment by Ma. Belen E. Tamayo | February 24, 2012

  2. Good day! I wanna know your branch address here in Dipolog City..I have fully paid my memorial plan almost 7 years.Waiting for your response..Thank you.

    Comment by Lorraine Claire Carabuena | February 5, 2013

  3. This is Amor G. Penada..I’m a plan holder of Pension Plan under Lifetime Plans, Inc. It’s going to mature on October 2014..I wanna know if this company is still existing. Please reply. Thank you.

    Comment by Amor G. Penada | July 5, 2013

  4. i’m susan a. chua. i’m a planholder of lifetime plans, inc. i want to know how i can claim my return of investment benefit.

    Comment by susan agravante-chua | January 7, 2016

  5. I’m Elsie Pimentel. a plan holder of education Plan for my son, the plan will mature on 2017, may i know the update.

    Comment by Elsie A. Pimentel | April 25, 2016

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