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POV Philippines by Jon Joaquin

The schemes of men

by Jon Joaquin

These days you can’t go anywhere in Davao City – or perhaps all of Mindanao – without hearing and overhearing people talking about “investments.” Even when I take my late afternoon long walks I overhear these conversations. I once stopped on a red light at a corner where there was a sari-sari store, and I overheard a man trying to convince a woman to give him her money so he could invest it. “Mas maayo pa ‘day sa akoa na lang ni ihatag kay ma-invest pa nako. Naa kay ganansya kada bulan. (It’s better if you gave that money to me so I can invest it for you. You’ll earn a profit every month.)

One of the biggest issues in Mindanao these days is the proliferation of investment schemes that are really nothing more than Ponzi schemes dressed up in various forms. There are quite a few of them, but the most famous – or infamous, depending on whether you’re an investor or a critic – is Kapa Community Ministry International. Kapa, which stands for Kabus Padatoon (make the poor rich), was founded and is headed by Joel Apolinario, a pastor whose affiliation is slightly clouded as of the moment. (He is said to have belonged to the Seventh Day Adventist Church but the group has denied it.) His operation is all over Mindanao but is based in Bislig City, Surigao del Sur. According to the Securities and Exchange Commission (SEC), his group collects investments from the public with a promise that 30 per cent of one’s investment will be paid back every month “until forever.” (Yes, the SEC used those words.)

Apolinario justifies his scheme by saying what he receives are donations and not investments. The money is used for ministry, he says, but he also promises the unusually large return on investment (ROI) to his donors. Because of this he has managed to attract a large following – he claims to have five million “KAPAmilya” (a play on the Filipino word for “fellow family members”) – and they can be rather rabid about their involvement.

It’s actually not hard to see through Kapa’s ruse. It is, for all intents and purposes, just a Ponzi scheme dressed up in religious garments. One puts in a P10,000 minimum investment – er, donation – and waits for the 30 per cent returns each month “until forever.” Most likely, this is done using the “robbing Peter to pay Paul” model: the early adopters do get a large return on their investment because they are paid using money from subsequent members. This can go on for a long time, but eventually the number of new members declines until there are no more to recruit; at this point the entire thing collapses, leaving the vast majority not only with no ROI but losing their initial investments as well.

I’ve read some members claim Kapa is involved in bitcoins, which is how it can afford to give out the high ROI. Sure bitcoins (or other forms of crypto currency) can, in theory, give high returns, but according to Philippine Science High School, Davao City Campus, Economic Professor, Jefferson Nuñeza, the problem is it is not commensurate to actual tangible currency being used right now. “If you invest in bitcoin and the ROI becomes millions, no bank will exchange it since the amount is too big,” he said. So while Kapa may in fact be dealing in bitcoins, there is no way it can use it in its “pay-out” to its “donors.”

The SEC issued a cease and desist order (CDO) on Kapa on February 24, 2019 “after finding substantial evidence that it has been offering and selling securities in the form of investment contracts without the necessary license.” According to the SEC, Kapa is actually a registered corporation in the Philippines but its certificate of incorporation, dated March 3, 2017, “explicitly stated that it is not authorized to undertake business activities requiring a secondary license such as acting as broker or dealer in securities, investment house and close-end or open-end investment company.”

Kapa largely ignored the SEC order, and so it found itself in the sights of President Rodrigo Duterte himself. On June 7 the President gave a cable TV interview in which he ordered the National Bureau of Investigation (NBI) and the Criminal Investigation and Detection Group (CIDG) to close down Kapa and all other companies offering “too good to be true” investment schemes. Unfortunately, that interview was done by Pastor Apollo Quiboloy, a leader of a large religious organization, so the discourse quickly became a church war of sorts, with members of both sides throwing all sorts of foul words against each other.

Perhaps aware of this, the President made another pronouncement on June 13 in General Santos City, this time calling Apolinario a swindler and, in true Duterte style, threatening to make the Kapa founder swallow his own dentures if he sees him. As for the poor “donors,” Duterte’s message was: “Katong nakuhaan ug dako sa (Those who gave a lot to) Kapa, I’m sorry. The operation will be stopped, shall stop immediately.”

I was surprised to learn that I have quite a few friends who have invested in Kapa and other such companies, and until now they refuse to believe they are being hoodwinked. The next few days will tell us how this whole drama will pan out; I fear the worst not just for the investors but also for our communities. If enough people lose money, they can easily be agitated to take matters in their own hands.

The views and opinions expressed in this column are those of the original author, and do not necessarily represent those of the Pilipino Express publishers.

Jon Joaquin is the Editor-In- Chief of the Davao City-based Mindanao Daily Mirror. E-mail Jon at

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