THE Senate will reopen its investigation into the troubled pre-need industry amid reports it is seeking government assistance as a result of mounting losses.

Senator Mar Roxas, chairman of the trade and commerce committee, said the inquiry would determine how pre-need companies were complying with their obligations to clients amid the economic downturn.

The Senate probe into the problems of the pre-need industry began three years ago with the collapse of the College Assurance Plan, one of the biggest players in the once-lucrative industry.

Roxas said the government failed to regulate the industry properly when it first showed signs of distress, and that caused 800,000 plan holders to lose their hard-earned money.

“It is important that we ensure a good future for our children and make sure they are not affected by this financial slump,” he said.

Industry figures show that as of the end of June 2008, the industry’s fund deficit had ballooned to P46.83 billion, reversing a P6.8-billion surplus the year earlier.

Pre-need firms had reportedly written to the Securities and Exchange Commission in August 2008, and they warned that the industry’s financial woes could lead to its death and plan holders would be left holding the bag if urgent solutions were not implemented quickly.

The industry’s deficit is projected to be much bigger for the entire 2008, according to Jose Alberto Alba, vice president of the Federation of Philippine Pre-Need Plan Companies Inc.

Alba said industry trust funds, managed by banks, were not generating the 12-percent assumed return on investment expected because all industries were suffering from the global financial meltdown.

One distressed pre-need firm, Pacific Plans, owned by the Yuchengcos, has reportedly been sold to Abundance Providers Investments Corp. Plan holders are threatening to go to court to stop the sale. Fel V. Maragay