The State of the President

[The following story on President Joseph Estrada’s finances was prepared by a team of reporters from the Philippine Center for Investigative Journalism (PCIJ), one of SEAPA’s founding members. This groundbreaking work of investigative journalism, largely based on searches of public records, was ignored by most mainstream daily newspapers in the Philippines.  By: Yvonne T. Chua, Sheila S. Coronel and Vinia M. Datinguinoo]

MANILA — President Joseph Estrada says his life is an open book. He does not deny the complications of his private life – that he has several mistresses, and that he has sired children by them.

The President, however, has not exactly been forthright about the financial aspects of his private life and the complex ethical issues – such as conflicts of interest – posed by the many and varied business involvements of his various families.

In his statements of assets, for example, Estrada does not declare his participation in about a dozen companies in which he and his wife are major investors and board members. Neither do his asset declarations give an idea of the magnitude of the business interests that he and his families are engaged in.

In the course of several months, we obtained and examined 66 corporate records in which Estrada, his wives and his children are listed as incorporators or board members. Altogether, these companies – 31 of which were set up during Estrada’s vice-presidential term and 11 since he assumed the presidency – had an authorized capital of P893.4 million when they were registered. The President and his family members had shares of P121.5 million and paid up P58.6 million of these when the companies were formed.

It is difficult to estimate how much these businesses are now worth because of incomplete data at the Securities and Exchange Commission (SEC). But based on available 1998 and 1999 financial statements, 14 of the 66 companies alone have assets of over P600 million.

It is not clear from the President’s official asset declarations over the last 12 years where the funds to invest in so many corporations come from. Moreover, neither the President nor his immediate family members acknowledge that many of their businesses involve the government, either in the acquisition of permits and clearances or in the award of contracts.

Today, as the President gives an accounting of the state of the nation, he should also be making an accounting of the state, and the source, of his – and his families’ – finances.

This becomes an urgent issue because of the lavish lifestyles of the President’s various households. Two of Estrada’s women companions – Laarni Enriquez and Joy Melendrez – live in posh quarters in Wack-Wack, Mandaluyong City and Green Meadows, Quezon City. According to land records, none of these residences are registered in their names or the President’s.

Estrada’s wives and children have also been seen riding a fleet of imported expensive vehicles, including a Jaguar, a Range Rover and several Mercedes Benzes – each of which costs millions of pesos. But neither the President’s statement of assets nor his most recent income tax declaration can explain where he got the wherewithal to support the extravagance of his loved ones. In 1999, Estrada declared in his statement of assets a net worth of P35.8 million and in his income tax return, a net income of P2.3 million.

In Wack-Wack, for example, land values are currently at P40,000 per square meter. Enriquez’s residence since the mid-1990s is at 771 Harvard Street; it is on property that covers more than 1,000 square meters and is listed under the name of Jacinto Ng Sr., one of the President’s closest friends. The land alone is worth over P40 million. Rentals for a typical Wack-Wack house would easily run to more than P100,000 a month or P1.2 million a year, about half of Estrada’s declared net income in 1999.

A recent visit to Wack-Wack revealed that the Enriquez house was being renovated. Earlier this year, Enriquez was reported to be building another Wack-Wack mansion at 796 Harvard Street, on a 5,000-square meter property registered, according to land records, under KB Space Holdings, a company owned by Ng.

It is obvious from this example that official declarations – as contained in Estrada’s statement of assets and income tax return – do not provide an accurate picture of the magnitude of the President’s and his families’ wealth.

At the same time, what Estrada declares are in themselves problematic. R.A. 6713 mandates that all public officials file every year the acquisition cost and the assessed and fair market values of their real property. In addition, they should also list other personal property as well as their investments, the cash they have on hand or in banks, their financial liabilities, and their business interests and financial connections.

Since his election to the Senate in 1987, Estrada has consistently declared interests in only four corporations: JELP Real Estate Development Corp., J. E. Inc., Feluisa Development Corp. and Felt Food Inc. The first three are real estate companies, with JELP appearing to be the biggest.

In a 1998 financial statement submitted to the Securities and Exchange Commission (SEC), JELP declared assets worth P194.2 million, mostly buildings and real estate valued at P147.2 million, or more than double its 1997 real estate assets of P58.8 million.

None of these assets, however, are listed in Estrada’s declaration, even if he and his wife jointly own 70 percent of JELP’s shares. Moreover, none of JELP’s liabilities of P188 million are declared in Estrada’s statements. Presumably, some of this money went to the acquisition of nearly P90 million worth of real property in 1998 alone. It would interest Filipinos which banks, institutions or individuals lent Estrada so much money in the year of his election. Incorporated on November 18, 1992, a few months after he was elected vice president, JELP began operating with a paid-up capital of P14.4 million, only P3 million of which was in cash. It is difficult to determine how the company built up its asset base and how it funded its real estate purchases from 1993 to 1996 because it has not complied with SEC requirements to file annual financial statements.

It was only in 1997, a year before Estrada was to run for the presidency, that JELP suddenly filed its financial statements. By then, it reported assets of P116.3 million, of which P58.8 million was real property. In 1998, the year Estrada became president, JELP reported assets of P194.2 million, an increase of nearly P78 million despite the Asian crisis and the slump in real estate prices. Of these assets, P147.2 million was real property.

Estrada also did not include in any of his statements of assets since 1987 his and his wife’s shareholdings in 11 companies. A check with the SEC shows Estrada or his wife Luisa Pimentel were incorporators or shareholders of, among others, Millennium Cinema Inc., JE Films and Video One Corp., and JOI’ s Food Corp., none of which were listed in the President’s asset declarations in the last 12 years.

Yet, when we queried Malaca?ang about these issues in late April this year, Press Secretary Ricardo Puno told us to wait until the President’s accountants and lawyers were available to provide answers. Subsequent follow-ups since then did not yield any answers. Puno also declined to say who these lawyers and accountants were.

The problem with R.A. 6713, which requires government officials to declare their assets every year, is that it asks these officials to make public the assets only of their spouses and children under 18. Framers of the law apparently never foresaw a president like Estrada who would openly acknowledge relationships with other women and children out of wedlock. The problem becomes even bigger when several of these extramarital liaisons yield mistresses and children who are actively involved in business.

Yet, other laws like the Anti-Graft and Corrupt Practices Act recognize the potential of people with family or otherwise “close personal relation” with any public official to take advantage of such a relation by “directly or indirectly requesting or receiving any present, gift or material or pecuniary advantage from any other person having some business, transaction, application, request or contract with the government, in which such public official has to intervene.”

The law includes such relationships as close personal, social and fraternal connections, and professional employment all giving rise to intimacy which assures free access to a public official. Presumably, mistresses and illegitimate children fall under this category.

The law on unlawfully acquired property, on the other hand, raises the possibility that ownership of property can be concealed by recording it in the name of, or held by, a public official’s spouse, crony or relatives.

These laws become pertinent particularly in the light of the multi-faceted business involvements particularly of Guia Gomez, with whom President Estrada has acknowledged having a long-term relationship, and her 31-year old son Jose Victor ‘JV’ Ejercito.

Gomez, who admits to her entrepreneurial inclinations in newspaper interviews, appears to be the most business-minded among the President’s women companions. A check with the SEC shows that Gomez is listed as having shareholdings in 33 companies involved in real estate, food, office machinery, trading and semiconductors. Her son is a shareholder in 11 of these companies, although on his own, he is an incorporator and stockholder of eight other firms.

Also listed as shareholder in two of the Gomez companies is Joel O. Ejercito; his sister, Ma. Theresa O. Ejercito, is stockholder in five. Both are the President’s children with Peachy Osorio, a movie director’s daughter with whom he had a relationship before his marriage to the First Lady.

From the records, it appears that Gomez’s core businesses are real estate and trading. She owns at least seven real estate companies, with a combined authorized capitalization of over P200 million. It is, however, difficult to determine from SEC figures the real assets, including land and other property, of these corporations.

For example, EG Properties alone, formed on November 23, 1998, shortly after Estrada was elected president, has an authorized capital of P100 million, P25 million of which has been paid up, half by Gomez and the rest by JV, Joel and Ma. Theresa Ejercito, and one Joey G. Estrada.

Another real estate company, Meiji Inc., is developing a housing estate in Cavite. It has an authorized capital of P100 million, P7 million of which was paid up when it was established on June 24, 1992, the year Estrada became vice president. Gomez holds the biggest number of shares and had paid up P4 million of her P16-million subscribed capital when the firm was registered. Son JV is the next biggest shareholder after his mother.

Other real estate companies listed in Gomez’s name are Grandmeadows Properties Inc., El Pueblo Builders Inc., Apex Land Inc., All Time Realty Consultants and Managers Inc., and JV&G Inc.

There is, of course, no law that prevents presidential mistresses from engaging in business. What is worrisome is when these businesses engage in transactions that involve the government. For example, housing projects have to comply with zoning and environmental regulations. Real estate firms can also avail themselves of loans from government financial institutions.

In defense of his and his mother’s business practices, JV Ejercito has said, “We are businesspeople and we have been in the past 10 years. We never dealt with any government projects since my father is a public official, and we will continue avoiding deals with the government.”

This becomes a tricky statement considering that JV is the biggest shareholder in the now-inactive Best World Construction Corp., an affiliate of the controversial BW Resources Corp., which is currently involved in an insider trading scandal.

JV’s core business is real estate development. His Buildworth Development Corp. constructs houses and condominiums. As anyone who has done even minor construction work knows, construction involves obtaining a slew of government clearances and permits. JV also has a lending company, Foremost Credit Resources, in which he, too, is the biggest shareholder.

Gomez is also into trading of various products, including food, biological products, office equipment, semiconductor materials, machinery and chemicals. Her dozen trading companies include Xytox Corp., Bioconcepts International Inc., Personal Shopper Inc., Poongsan Precision Phils. Inc., Gazelle Distribution System Inc., Stallion Intertrades Center Inc., Paisa International Inc., Micro-Biomass International Inc., Rainbowman International (Manila) Inc., and Trumpet Marketing International.

Gomez is active in the labor recruitment business as well, having formed four job placement companies – Monde Quality Services Inc., Job Employment Staffing Assistance and Allied Services Inc., Powerhouse Staffbuilders International Inc., and Gomez-Orozco Recruitment Agency Co.

Like the First Lady, Gomez has her share of restaurants that operate under GTWJ Food Corp., Paisa Champagne Bar Inc. and Gomez-Antonio Enterprises Inc.

Meanwhile, the President’s other woman companion, Laarni Enriquez, has six companies to her name, some of which include her brothers as incorporators. Star J Management Corp., which she formed in 1996 with the President’s brother Jesus, sister Pilarica and presidential buddy Jaime Dichaves, operates the Star J Plaza, a mall in Malabon whose ownership, according to a document displayed in the lobby of the mall, is under the name of Jacinto Ng. Enriquez also owns Star J Bingo and Star J Games, which operate the bingo parlor and bowling alley at the Malabon mall.

On the other hand, the First Lady and her children are mainly into real estate, restaurants and entertainment. Apart from JELP, Estrada, the First Lady and their children formed the Feluisa Development Corp. They have restaurants listed under five food companies: Felt Food Services, JOI’s Food Corp., 24K International Food Inc., ADE Food Inc. and All Hot Soup Inc.

In the entertainment business, the Estradas invested in Millennium Cinema Inc., formed in 1999, and which is reported to be the fastest-rising film production company these days, and JE Films and Video One Inc.


IN 1998, Jose Victor ‘JV’ Ejercito, then 29 years old, became the biggest shareholder of the newly formed Best World Construction Corp., an affiliate of BW Resources Corp., the gaming company now in the dock for stock manipulation and insider trading.

Apart from Ejercito, the other incorporators of the construction firm were businessman Dante Tan, a key figure in the BW scandal; Tan’s lawyer Jose Salvador M. Rivera Jr.; Francis Ablan, who was named BW chairman early this year; and Malaysian businessman Kenneth Eswaran, Tan’s business associate who is a major shareholder of another BW affiliate, Best World Gaming & Entertainment Corp.

Corporate records show that the other shareholders of Best World Gaming include Tan, and lawyer Rivera – both of them JV Ejercito’s business partners in Best World Construction. In December 1998, the Philippine Amusement and Gaming Corp. (Pagcor), the government’s casino company, gave Best World Gaming the sole authority to conduct nationwide computerized online bingo gaming for 10 years.

In a congressional hearing in March 1999, Pagcor chairperson Alice Reyes admitted that Best World Gaming got the bingo license “because it had the endorsement of the Office of the President.” In addition, Best World Gaming’ s affiliate, BW Resources, signed a memorandum with Pagcor on June 30, 1999, in which Pagcor agreed to be the “anchor tenant” at the Sheraton Marina, a casino, shopping and tourism complex BW is building in Malate, Manila.

In 1999, BW and Best World Gaming became co-borrowers of a P600-million loan obtained from the Philippine National Bank, in which the government was then the major shareholder.

These interlocking relationships illustrate the ethical problems posed by the involvement of presidential relatives in business. In an interview, Ejercito explained that he was drawn into Best World Construction by Tan and his partners. “Since they were family friends, they told me they were going to put up a development corporation and since I was in real estate and construction, I thought okay, that’s in line with my business.”

But Ejercito said that he pulled out of the partnership when BW shifted from real estate development to gaming in late 1998. “I told them I can’t help you, I wouldn’t be an asset to you, it wouldn’t be good for me and for my father. It’s not nice manipulating stock prices, I even told them that.” In the end, nothing ever came out of Best World Construction, Ejercito said.

Even if that were so, the incident illustrates the apparently close business and personal relationships between members of the Estrada family and individuals who have obtained government loans, contracts and franchises. Such relationships are bound to raise thorny issues of conflicts of interest.

There was nothing illegal about Ejercito’s short-lived partnership with BW. But the fact that the President’s favorite son was once involved with businessmen alleged to have received preferential treatment from government entities and now currently undergoing government investigation reveals the fuzziness of the line that separates business from politics.s

Earlier this year, former Securities and Exchange Commission (SEC) chairman Perfecto Yasay Jr. had already accused the President of undue interference in the SEC’s investigation of BW and Dante Tan who, apart from having been JV Ejercito’s business partner, is also widely known to be Estrada’s friend.

Ejercito, however, insisted that his family has not taken advantage of Estrada’s presidency to further their business interests. “I don’t want shortcuts,” he said. “I see to it that everything is done legally. Even my bank loans are obtained not because of who I am, I want them to lend me because of the projects I am doing. I don’t want them to see me as a political client. It’s actually hard to be the president’s son – you can’t go into this, you can’t go into that because you’re partly a political figure. I just can’t wait for the President’s term to finish.”

Despite these supposed difficulties, the businesses of Estrada’s various families appear to be doing well. In fact, our search of corporate records showed that the President’s wives and children have engaged in a rash of company formation, establishing at least 11 new corporations since June 1998, a month after Estrada’s election. Most of these firms are in real estate and entertainment.

In a country where the fortunes of businesses are often determined by political connections, the entrepreneurial activities of Estrada’s various families, while not illegal, tread on fragile ethical ground.

JV’s mother, Guia Gomez, for example, has a long list of business partnerships with individuals who are now in government. Her business activities are those of a politically well-connected entrepreneur whose interests have expanded with Estrada’s rise to power.

All but one of the 33 companies in which Gomez is listed as an incorporator were formed since 1987, when Estrada was first elected to the Senate. Of these, 13 were set up while he was senator, 15 during his vice presidency, and four in the first two years of his presidential term.

Gomez operates a range of businesses involved in real estate, trading, and even environmental impact assessments. All of these businesses would require government clearances and permits and some of them involve transactions with government entities.

Gomez finds herself in sticky situations as several of her business partners have been appointed to government posts since Estrada became President.

For example, SEC records show that Gomez and Julius Topacio, assistant secretary of the Department of Interior and Local Government, are partners in five companies. Topacio is the president’s chief accountant and is listed as such in Estrada’s 1987 statement of assets. In 1998, Topacio was appointed the government representative to the board of Legaspi Oil Co., a sequestered company.

He and Gomez are partners in Meiji Inc., a company formed in 1992 and currently developing a subdivision and housing project in Cavite, which presumably needed to obtain local government permits and clearances. In addition, Topacio and Gomez are shareholders in Paisa Champagne Bar Inc., operating restaurants that again need all sorts of local government permits.

They are also partners in Paisa International Inc., a trading company; two project management firms, WT Partnership Philippines Inc and., Wegtec International Corp.; JV& G Inc., a real estate company; and Powerhouse Staffbuilders International Inc., a labor recruitment firm.

Another shareholder of that recruitment firm is Rosario G. Yu, formerly tobacco tycoon Lucio Tan’s secretary. Yu was named presidential assistant in 1998, and is frequently seen in Malaca?ang.

An even more controversial business associate of Gomez’s is Cecilia Ejercito de Castro, who is known as the President’s cousin. De Castro was appointed presidential assistant in 1998. In 1999, she figured in a P200-million textbook scandal in which Education Secretary Andrew Gonzalez said she approached him for the speedy release of textbook funds.

De Castro is Gomez’s business partner in the real estate firm, Meiji Inc., and Xytox Corp., a trading firm.

Another Gomez partner is Talreja Mangharam Shivandas, the Indian businessman who runs the restaurants and VIP lounges at the Ninoy Aquino International Airport and who was responsible for the ill-fated construction of a restaurant on the Malaca?ang grounds. Gomez and Shivandas are partners in Paisa International Inc., a trading company.

Gomez’s network of business associations include presidential brother in-law, academic Raul P. de Guzman, who was appointed to the San Miguel Board and named presidential adviser on development administration in the first few months of Estrada’s term. In 1989, De Guzman and Gomez were both incorporators of Environmental Primemovers of Asia, Inc., a company that conducts environmental impact studies for firms seeking environmental clearances from the government.

In 1996, Environmental Primemovers was bought by Woodward-Clyde Philippines, although the original incorporators retained their investments in the new company.

These included De Guzman’s son, Raul Roberto, who was appointed presidential assistant for environment and water in 1998, even while he was still involved with the environmental firm.

Raul Roberto is also in partnership with Gomez in three other companies, including Poongsan Precision Phil., Paisa International, and Risktrack Inc. as well as Environmental Primemovers.

The involvement of Gomez and Raul Roberto de Guzman with Poongsan Philippines, a wholly owned subsidiary of the Korean firm Poongsan Precision Corp., is nominal but still raises questions. Poongsan manufactures semiconductors and is located in the Clark Special Economic Zone, and therefore leases government property and receives government incentives.

Yet another business associate is Jose Fernando B. Camus, Gomez’s partner in WT Partnership Philippines Inc., a management and engineering company, and in Meiji Inc. He was named to the board of the Bases Conversion Development Authority also in 1998.

Meanwhile, Rolando Macasaet, who currently heads the Philippine National Construction Corp., the government corporation that operates the country’s toll roads, is JV Ejercito’s business partner in Foremost Credit Resources Inc., a lending company formed in 1995.

The first two years of the Estrada presidency was a period that saw a burst of entrepreneurial energies among Estrada’s wives and children. The busiest appear to be Gomez and her son JV. Gomez formed four real estate firms in 1998 and 1999: El Pueblo Builders, Grandmeadows, Inc., EG Properties and Apex Land Inc. Her son is a partner in three of these firms while Estrada’s other illegitimate children – Joel Eduardo and Ma. Theresa Ejercito – hold shares in EG Properties.

JV, on his own, formed three new companies since his father’s election: Aeromax Aircraft Services, Inc., a carrier of mail and merchandise; Vegas Food Inc., a restaurant and catering firm; and International Maximum Entertainment, Inc., which is involved in movie, TV and musical productions.

In addition, the assets of JV’s construction firm, Buildworth, grew from P14 million in 1997 to P83.3 million in 1998, according to financial statements submitted to the SEC. Meanwhile, his Ang Bayang Makulay Production Inc., a foundation formed last January 3, is producing the Philippine version of the Broadway hit, “Miss Saigon.”

Often referred to as the family’s black sheep, Jude Estrada, the President’s second son with the First Lady, did not show much entrepreneurial inclinations before his father’s election. But in 1999 alone, Jude and his associates formed three new companies: Primeval Commodities, Inc., which is engaged in the trading of petroleum and food products; Paragon Security Management and Investigation Services, Inc., which provides security services; and Reach Management Corp., which is into personnel and management consultancy.

In addition, Jude with his two other siblings, Jinggoy and Jacqueline, his mother Luisa and uncle Jesus Ejercito, formed Millennium Cinema in 1999. Barely two years old, Millennium hopes to rival the big film companies, Regal and Viva, in the movie production business.


For more details of Estrada’s and his families’ financial interests, including statements of assets and corporate holdings, visit PCIJ’s web site: or The site has tables, original documents, etc.

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