SECURITIZATION Explained in Filipino Language: http://www.lilactwin.blogspot.com/2013/04/in-filipino-language-securitization-as.html SECURITIZATION: The Art of Global Fund Sourcing, as expounded by the expert in this field, Senator No. 14 Mr. Baldomero Falcone, currently vying for a seat in the Philippine Senate on May 2013 Mid-Term Election.

1. By: Senatoriable #14 Baldomero
Falcone
Function Rooms 1-4, Asian Institute of
Management Conference
Center, Benavidez St., Makati City.

2.  SECURITIZATION is the special skill/art
/process of having viable and feasible
projects and their comprehensive
components (studies, land, raw
materials, labor, proper technology, contracts
etc.) entrusted to the Trust Department of a
Commercial or Universal Bank in order to set
up an Asset Pool Trust or Special Purpose
Vehicle (SPV)

3.  Under this Special Purpose Vehicle or Asset
Pool Trust, the project proponent with the
Trust Department of the Bank as
nominee, co- issuer will be able to float
securities/bonds or asset participatory
certificates.

4.  Features of these securities/bonds/asset
participatory certificates, priorly registered
with the SEC, will be longer in maturities, and
will be wrapped up by the guarantee of an
insurance firm or another standby bank in
terms of return of principal and annual yields;
hence they become investment grade and
credit worthy.

5.  The yields will be better than the T-Bills of
the Central Bank and so they will be able to
access not only the three (3) trillions of Trust
money (per CB report) held in the trust
departments of our banks(BDO, BPI, and
others)but also the global funds(other trust
money in other banks, high-net worth
individuals and multinational corporations)
around the world that like water always seeks
its own level.

6.  All sales emanating from these
bonds/securities will be controlled by the
supervising body composed of
representatives from the trustee bank, the
proponent company, the
contracting/executing company and an audit
company who together will decide on the
proper and timely exclusive application of
funds for the strategic project to be
established.

7.  Once the project is functioning and its
viability assured, and the monies plus
promised yields of the investors/participants
have been returned, the asset pool trust or
special purpose vehicle is collapsed and the
established project is given back to the
original project proponent/entrepreneur.

8.  Unpaid investors can have the option to join
the original project proponent in the
management of the new business.

9.  SECURITIZATION thus will create more
businesses all over the country and will create
hundreds of thousands of jobs.

10.  It will not make our governors and mayors
too dependent on their IRA, but with good
potential projects coming from their
respective provinces together with the
entrepreneurs from the private sector (in the
spirit of PPP) can go around the restrictive
credit conditionalities put on by our
oligarchic banking industry.

11.  After all securitization is tapping not the
bank's tight credit wherein the banks have
deposit liabilities but the more liberal trust
money.

12.  With thousands of graduating students and
Filipinos knowledgeable in
securitization, given the proper moral and
financial encouragement and by the
promotion of the government , we can
definitely usher TO A MUCH FASTER MODE
the ECONOMIC RENAISSANCE FOR THIS
COUNTRY THAT WHICH WE ALL HAVE BEEN
LONGING FOR.

13.  The reason why I am pushing for
Securitization is that this is one sure method
of increasing the deliberately-made-scarce
money supply in the country controlled by
the few oligarchic families(scared of
competition) who own and control the
universal banks – same families have made
the majority appointments to the monetary
board which decides the level of money-
supply for circulation.

14.  Some studies for example show that the
existing money in relation to the national
GDP is very much lower in ratio than that of
comparative ratios in the progressive
neighbor nations around us.

15.  Hence, a real honest to goodness legislative
study and measure must be made to really
find out what should be the ideal money
supply in circulation to make all productive
Filipinos contribute to the economic
renaissance of our country, given its so many
natural resources and so talented people.

16.  Let me cite an example: why can't we push
for integrated coconut factories in all the
provinces which have abundant coconut
trees, integrating the production of
coir, activated carbon from the coco
shell, coco sugar from the meat and healthful
coco drink from the water?

17.  Initial studies show that instead of just 2-4
pesos per nut that a coconut farmer presently
received, under an integrated coco factories
scheme, each coconut farmer would be
receiving at least 50 pesos per nut, thus
enabling real economic sufficiency to reach
our countryside, besides enabling hi-value
exports instead of just copra.

18.  Securitization would be one sure way of
raising domestic and global funds for
financing hundreds of these integrated coco
factories, without touching the national
budget.

19.  Thus, this is the one sure way of increasing
the money supply in circulation in the country
and in the countryside, enabling all youth
from all sectors, from the cities and the
professionals sons and daughters as well as
from the countryside farmers, rice, corn ,
sugar and coconut etc. to fund their needed
education for sufficiency.

20.  Coconut is just one it. We have bamboos
which under present technology can be
engineered to be stronger than hardwood ;
kapok whose cotton can be ideal non-
pollutant inexhaustible fuel;

21.  Some might be surprised of what we can do
with LAHAR. Lahar has at least 5 to 10
percent of magnetite iron sand which can be
our raw material for a steel mill (for
securitization) considering that lahar,
according to the DENR is here to stay with us
until one hundred years and even more as
every rain would increase these blessings of
lahar.

22.  Look around, undeniably, we have so many
natural resources. Plus, we have so many
talented Citizens. Deliver the securitization
concept in the hands of so many enlightened
governors, mayors, coops, private and non-
public institutions and individuals, schools,
faculty and students, can surely usher this
nation into the economic renaissance that
which we all have been longing for, more so,
it will be within our lifetime.

23.  "Daang matuwid" through dole-outs alone
and the current policies, cannot solve the
increasing poverty in this country. It should
be combined with the implementation of
Securitization.
LET'S DO IT!
BAL FALCONE SENATORIABLE

24. 1. Proponent has very good project (Profit and Loss
Statement, Initial Balance Sheet, Cash-flow
Projections, etc.)
2. Goes to Trust Department of a Commercial or
Universal Bank (Local, or Foreign Bank w/ Trust
Department)
3. Create an Asset Pool Trust (APT) it is a non-
registered entity.
4. Goes to Insurance Companies or Banks who will
issue Stand By Letter of Credit (SBLC) guaranteeing
the payment of the Principal and its yields.
5. APT floats be Registered with Securities & Exchange
Commission (SEC), make known to the
public, Securities/Bonds/Asset Participatory
Certificates
6. Goes to Underwriter or Licensed Seller of Securities

25. 7. All Revenues must be controlled by a committee
or project board composed of auditor, trust
department, insurance firm, project proponent
company and works engineer to prevent
diversion of fund.
8. All Revenues Gathered for Redemption of all
APC/Securities under promised yield.
9. Once all redeemed the Trust is collapsed and
entire full blown project goes to original project
proponent.
10. Or, if some bonds are unredeemed the owner of
the unredeemed securities participates in the
management of the project.

26. 1. Creation of Asset Pool:
a. Land & Existing Improvements
b. Development Masterplan
 Purchased order from Purchaser (Mang Inasal)
 Availability of Lands, Water Supply, Feed
Supply, Medicines, Expert, and Technical
People, etc that will work towards the success of
the project.
a. Sales Proceeds
b. Development Income
c. Value Appreciation
d. All Other Future Revenues & Assets

27. 2. Creation of Business Plan:
a. Project Description
b. Target Market
c. Development Plans and Timetable
d. Implementation Strategies
e. Financial Projections

28. 3. Create Offering Prospectus (Project Study) and
present Enhancers (insurance that guarantees)
 Which Insurance Firm (Guarantee Cover) or
another Bank who will issue SBLC (bank guaranty)
will guarantee each stock certificate. (Proponent
will spend for printing cost and premium for
guarantee)
 Example: a certificate of 50,000 php the
insurance company will charge usually 2%
premium.
 If government housing it will be guaranteed by
Home Guarantee Corporation

29. 4. Create Offering Prospectus (Project Study)
and
 Go to the Securities and Exchange
Commission (SEC) for a license to sell Project
Participatory Certificates (PPC) or Asset
Participatory Certificates (APC), Investment
Certificates, Bonds or Securities to the Public.

30. 5. Market the Securities
 Go to an underwriter/s for either FIRM or
BEST OFFER for purchase of these securities.
6. Use & Management of Funds
 All the money are pooled and entrusted to a
project board or committee to avoid diversion
of funds and proper exclusive application of
funds to project.

31.  After allocating 10% to 15% of the funds to
Administrative Expense
 All funds are entrusted to sole application to
the specific project.
 If the projects is making money the first
application of the funds is to retire
APC/PPC/Bonds/Securities.

32. Issuer, Landowner and BASES CONVERSION DEVELOPMENT AUTHORITY
Principal Funds Beneficiary 2/F Rufino Pacific Tower
Ayala Avenue, Makati
Tel. No. 813-53-89 to 90
Lead Underwriter and Issue PHILIPPINE NATIONAL BANK
Manager 2/F PNB Bldg
Escolta, Manila
Tel. No. 402-051
Project Manager PUBLIC ESTATES AUTHORITY
7/F Legaspi Tower 200
Paseo de Roxas
Legaspi Village, Makati City
Tel. No. 817-4711

33. Trustee PHILIPPINE NATIONAL BANK
TRUST BANKING GROUP
8/F PNB Bldg., Escolta, Manila
Tel. No. 402-051
Co-Lead Underwriters ALLIED BANKING CORPORATION
6754 Ayala Avenue, Makati
Tel. No. 818-79-61
EXCHANGE CAPITAL CORPORATION
151 Paseo de Roxas, Makati City
Tel. No. 815-4880
RCBC CAPITAL CORPORATION
8F-Y Tower, Alfaro Cor. Gallardo Sts
Salcedo Village, Makati City

34. Participating Underwriters CORPORATE INVESTMENTS PHILIPPINES, INC.
9/F Valero Tower
122 Valero St., Salcedo Village
Makati City, Metro Manila
Tel. No. 843-5426 / 810 1809
FIRST METRO INVESTMENT CORPORATION
4/F Metro Bank Plaza
Se. Gil Puyat Avenue
Makati City
SECURITY BANK AND TRUST COMPANY
4/F, Metro Bank Plaza
Sen. Gil Puyat Ave., Makati City

35. Legal Counsel to the Issuer OFFICE OF THE GOVERNMENT CORPORATE
COUNSEL
5th & 6th Floors
Philippine Sugar Center
North Avenue, Diliman, Quezon City
Tel. No. 99-61-34
Legal Counsel to the SYCIP SALAZAR HERNANDEZ & GAITMAITAN
Underwriter Sycip Law-All Asia Center
105 Paseo de Roxas, Makati City
Tel No. 817-98-11
Tax Advisors to Project PUNONGBAYAN & ARAULLO
Manager 6/F Vernida VI Bldg
Alfaro Street
Salcedo Village, Makati City
Tel. No. 810-9741

36. Receiving/Custodian PHILIPPINE NATIONAL BANK
Bank, Transfer and Paying TRUST BANKING GROUP
Agent 8/F PNB Bldg., Escolta, Manila
Tel. No. 402-051
Planners to Project Manager PLANNING RESOURCES & OPERATIONS SYSTEMS
(PROS)
2/F Prudential Bank Bldg
Ortigas Avenue, San Juan
Tel. No. 721-1661
Business & Financial STRATEGIES & ALLIANCES CORPORATION (SAC)
Advisors to Project 12/F Century Tower
Managers 100 Tordesillas Street
Salcedo Village, Makati City
Tel. No. 812-90-02 / 813-68-77 to 80