U.S. INVESTMENT FUND (CALPERS) TO REVIEW RP'S PERFORMANCE

Manila, August 13, 2003 (STAR) By Des Ferriols  - The California Public Employees Retirement System (Calpers) is sending its controversial consultant, Wilshire & Associates, to the Philippines to conduct a ground-level evaluation of the country’s performance before the so-called cure-period lapses in February next year.

After giving the Philippines a failing grade in its last two evaluations, Wilshire is expected to meet with Philippine officials including representatives from the judiciary which had been particularly upset with Wilshire’s report early this year.

Calpers is the biggest investment fund in the US. Although its Philippine investments are relatively small compared to other funds, it’s rating and evaluation is widely used by other investment funds when deciding whether to invest in the Philippines or not.

When Wilshire recommended the removal of the Philippines from Calpers’ investment portfolio, Philippine officials launched an aggressive lobby to be reinstated after it concluded that Wilshire’s report was based on wrong information provided by third party sources.

According to Corazon Guidote, managing director of the Investor Relations Office of the Bangko Sentral ng Pilipinas (BSP), the Philippines was reinstated but it was put on a one-year cure-period within which it was supposed to get its affairs in order.

Guidote said this period will lapse in February which means that the Philippines should be able to convince Calpers that it should be fully reinstated after the rebuttal of the Wilshire report.

According to Guidote, a delegation from the Philippines is scheduled to meet with Calpers and Wilshire on Aug. 23 in California.

Guidote said the meeting was part of the agreement struck by Finance Secretary Jose Isidro Camacho when he met with Calpers during the state visit earlier this year.

According to Guidote, Calpers had directed Wilshire to meet with Philippine officials in Calpers premises with Calpers officials present.

"What we will do is simply present empirical data that would dispute Wilshire’s findings," she said. "We will counter their evaluation with actual data that would show that the reality on the ground is exactly the opposite of what they gathered from their third party sources, some of which didn’t even know that their reports were used by Wilshire."

After the August presentation, Guidote said Wilshire will then send its evaluation team to the Philippines to validate its findings and make a new recommendation to the Calpers board of directors on whether or not to retain the Philippines in the fund’s investment portfolio.

"It’s not confirmed yet when Wilshire will arrive but it is part of the agreement when Secretary Camacho met with Calpers," Guidote explained. "When we meet on Aug. 23, we will have three hours to make the presentation to Wilshire and Calpers."

According to Guidote, the Philippine delegation will be joined by Philippine Ambassador to the US Albert del Rosario with representatives from the Securities and Exchange Commission, Philippine Stock Exchange and the Anti Money-Laundering Council.

Makati Business Club executive director Guillermo Luz is also expected to join the delegation, Guidote said, because it was this group that prepared the International Country Risk Guide that Wilshire used as one of its third party sources for its erroneous report.

"Mr. Luz would be joining the team to explain that the particular report used by Wilshire is no longer the relevant one because the criteria have changed since 2001," Guidote explained.

Guidote said the Supreme Court was asked to send a representative but she said the justices were so insulted by the Wilshire report that they declined to send a representative. Instead they asked Wilshire to formally and publicly apologize for its "unsubstantiated report" on the Supreme Court.

"Wilshire will have to meet with the Supreme Court when they get here," Guidote said.

According to Guidote, the Philippines is the first country to be given the opportunity to make this kind of presentation before both Wilshire and Calpers. Malaysia and Thailand had earlier protested their removal from the Calpers investment portfolio but their lobby was not as aggressive.


Reported by: Sol Jose Vanzi

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