MANILA - The key to the P10.97 million yearly increases in the Arroyo couple’s wealth was their choice of savvy financial managers.

According to Ruy Rondain, the lawyer of First Gentleman Mike Arroyo, the dramatic jump in the wealth of the Arroyo couple since 2001 is clear: “As far as the stocks are concerned, at least, they had very good financial advisers.”

Rondain was reacting to the report of the Philippine Center of Investigative Journalism (PCIJ) that traced the assets and net worth of the couple since Mrs. Arroyo became a public official.

It noted that since 2001, when Mrs. Arroyo assumed the presidency, “Arroyo added P10.97 million to her net worth year on year on average, or 20 times more than her lawful gross salary as president of only P45,000 a month.”

Among the couple’s assets, stocks, or ownership units, in companies accounted for bulk of the Arroyo couple’s wealth. In 2008, for example, “stocks already made up 69% of her declared wealth,” the PCIJ report said.

Shares of stocks

From 2001 to 2008, the Arroyo couple declared the following amount of equity shares in Mrs. Arroyo’s Statement of Assets, Liabilities and Networth (SALN), which is a public document.

• 2001             – P7.5 million
• 2002-2005  – no declared stocks
• 2006             – P55 million
• 2007             – P62 million
• 2008             – P110 million

In an interview with ABS-CBN News Channel’s Dateline, Rondain said these amounts represent stakes in listed companies.

“Those stocks are listed. Those are publicly listed stocks because they divested (their) stocks in private companies. The president is prohibited from participating directly in a private business,” Rondain said.

When asked why there was no declared ownership of stocks in the SALN from 2002 to 2005, he said, “When there was no listing, it shows they were not involved in the market at that time.”

Savvy advisers

After a 4-year absence in the stock market, however, President Arroyo’s SALN showed that the couple returned to the market by 2006, pouring P55 million cash there.

The following year, the P7.2 million additional investment in the stock market accounted for 93% of the P7.72 million incremental assets of the couple. The balance of P507,800 referred to the acquisition value of a property in Bulacan.

By 2008, they poured in a whopping P48 million additional funds in the stock market.

The PCIJ report noted that “Arroyo stacked up her stock portfolio even as the global financial crisis sent stock markets tumbling down, and the national economy posted sluggish growth.”

According to the stock exchange data compiled by the central bank, year-on-year values of the stocks traded in 2007 posted growth rates ranging from 21% to 68%.

By 2008, however, these gains were reversed as the US financial system went on a downward spiral following AIG’s collapse in September. Stock values plummeted by up to 48% compared to year-ago levels. It is only in recent months that the losses are back to single-digit levels.

But Rondain said stock market players “buy when it's low and you sell when it's high.”

“Just because it's a bearish market [and] a down market, people are assuming that you should lose money. But that's not necessarily true because during a bearish market, prices are not fully valued, the stocks are not fully valued,” he explained.

“It's clear to me. As far as the stocks are concerned, at least, they had very good financial advisers,” he stressed.

Not dramatic

Rondain added that the gains from these transactions are not dramatic.

“Was it a dramatic increase? I don't think so. Contrary to the PCIJ interpretation, it was an incremental increase, and the experts tell me that these are conservative increases,” he said.

Rondain said he also consulted some financial experts. “I was asking whether or not there was anything incredible, unbelievable about the growth in the stock portfolio. They said, ‘No, that's a very conservative growth’.”

The timing and acquisition cost matter, the lawyer stressed.

He gave the example of Piltel’s stocks, which, he said, was battered by bad news in November 2007. “It went down to something like 80 centavos. The bold ones who bought at 80 centavos will have made 1,000% because I understand now that it's trading at almost P9. So do you make a killing? Absolutely. Was it illegal? Absolutely not.”

Dateline’s Ricky Carandang then asked, “Did they invest in Piltel?”

“Honestly, I don't know the stocks that they invested in. I was saying that to illustrate,” Rondain replied.

Reporting wealth

While the total value of stocks bought at year-end were available in the Arroyos’ SALN, the details of what stocks were bought and sold at a premium were not.

“I've seen the SALN forms myself. It does not require that you detail. What it says is stock ownership and then you just indicate the acquisition cost,” he said.

For filling up the form’s one-line space for the total acquisition cost of stocks in listed companies, Rondain said the president already complied with the SALN requirements.

For private companies, however, Rondain said the specific firms—such as LTA Realty, Eva Property, among others—were mentioned in the SALN because “The form requires that you indicate corporations where you have a financial interest.”

If journalists or the public would like to know more about what profitable listed companies the financial managers of the Arroyos invested in, they are likely to have difficulty. The records of the Philippine Stock Exchange merely show the name of the broker trading stocks in behalf of an unnamed client.

“If you dig deeper, I’m sure you can find out,” Rondain insisted.

Then he added, “Basically, you gotta take my client's word for it. And if there's any evidence of wrongdoing, then they can always file a case in court.”

When asked if he would advise his client to release more stocks-related information, the lawyer was adamant. “No, not at all,” he said.