Message from the CHAIRMAN

LET me begin by repeating, with updates, my Message last year. As of the end of August 2007 we now have investible assets of P4.7 billion, as compared with P4.6 last April 2007 and P4.0 a year ago, in April 2006. It took us all of twenty-three years to amass our first billion pesos, another six years for the second billion, three years for the third, only two years to complete the fourth, and probably a little more than a year for the fifth… We have no debts, and all our funds are earmarked for our retirees.

We declared an ROI of 13.3 per cent last April 2007, in comparison to 10.8 per cent the year before. Our ROI is about double the bellweather 91-day Treasury Bill rate. We consider our performance very satisfactory at the present time. To achieve this, we have increased our holdings of blue-chip equities, managed by our external managers. We have remained our internal management skills to government securities.

Mindful of the difficulties presently faced by the pre-need industry, we have undertaken actuarial studies, confirmed by external actuaries, to ensure that PERAA’s financial operations were actuarially satisfactory at their April 2007 levels, although our participating schools have since increased to 1,803 and our individual memberships to 75,627.

Furthermore, the BIR has confirmed that our reserve fund facility is tax-free, just like the normal individual contributions, for as long as they are ultimately and irrevocably earmarked for individual retirement purposes.

For our IT improvement program, we now have appropriate investment software to know our status at any given moment. We will soon complete our expanded membership program for both participating schools and individual members, hopefully operational by the end of the fiscal year. While improving upon our capabilities, we have kept our staff relatively small, over three dozen in all. Nevertheless, we engage the best available external consultants in the critical auditing, legal, and actuarial fields.

PERAA has been fortunate in that the Board of Trustees has been strengthened with younger but very qualified trustees. Almost all the nine elected and appointed trustees come from our top and largest participating schools. Moreover, much of the different operational tasks have been farmed out among the trustees, such as marketing and membership, IT improvements, and of course investment management, among others.

Early this year, we announced the Board acceptance of the resignation of Pres. Oscar Josef and the appointment of Ms . Bernadette Nepomuceno as the fourth PERAA president. Dr. Josef served the Association for 33 years, (18 as president), and he certainly deserves respite after devotedly serving PERAA. As we thank and bid him ‘bon voyage,’ let us welcome our new and obviously young president. She is sure to take the Association to the next billion.

(SGD.) Armand V. Fabella
Chairman

(Printable Copy)

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