GenSan business chamber says proliferating Ponzi schemes threat to local economy

THE GENERAL Santos (GenSan) City Chamber of Commerce and Industry Inc. has appealed to President Rodrigo R. Duterte to help put a stop to illegal investment schemes that have been proliferating in the city and surrounding provinces.
In a letter dated Jan. 21, the business group, through its president, Elmer V. Catulpos, said the Ponzi-like schemes pose a serious threat to the local economy.
“Bankers in Gensan have already noted drastic withdrawals by depositors as many residents go crazy in investing on Kapa (Kabus Padatuon), Almamico (Alabel Maasim Small Scale Mining Cooperative), AlamCco (Alabel Maasim Credit Cooperative), and other groups representing themselves as legitimate religious ministries and government-accredited cooperatives out to liberate people from financial miseries,” Mr. Catulpos said in the letter.
Mr. Catulpos said the “huge sums of money taken out from banks and from natural money circulation becomes uncontrollable and can cause huge financial and economic damage to our locality and to the country’s economy.”
He said the groups have promised their supposed investors attractive returns that could run to about a third of their investments a month, a promise that is “quite improbable from a standpoint of a legitimate business.”
The business chamber has also passed a resolution expressing its apprehension over the activities of these groups.
Ponzi scheme, is an outlawed investment scheme which promises huge returns, but exposes new investors to high risk as their money is used to pay old investors. Named after Charles Ponzi who popularized it in 1919, Ponzi scheme does not involve exchange of goods, but merely transfer of cash from new investor to the older one.
In its reply to the allegation, Kapa, whose founder is Pastor Joel Apolinario, branded the resolution of the business organization as “fool information (sic).”
“This is how the media and those companies work together to manipulate us. For almost four decades of doing this to the people. They don’t want us to grow and financially free,” Kapa said on the official Facebook page of its main office in Alabel, Sarangani,
Kapa claims that it has 1.3 million members who have received “Love gifts” and have been able to buy their needs, eat in “restaurants regularly,” travel, buy properties and vehicles.
The two other groups, which also have Facebook accounts but are not as active as Kapa, have not released any statements in response to the GenSan chamber.
Mr. Catulpos said all these groups have been “aggressive in their recruitment of potential investors, even dropping names of well-known political figures and celebrities as among their prime investors to lend legitimacy to their groups.”
In March 2017, the Securities and Exchange Commission already issued a public warning saying that Kapa, which at that time was operating only in Bislig City in Surigao del Sur, was not a registered entity and that it was not “authorized to solicit investments.”
In October last year, members of the National Bureau of Investigation arrested two broadcasters after Kapa accused them of alleged extortion, but the two claimed they were framed as they were among the critics of the group. — Carmelito Q. Francisco