Editorial
Philippine Daily Inquirer
Posted 09/20/10

THE SWIFT response of the House of Representatives and the Securities and Exchange Commission (SEC) to the Inquirer’s special report on shady housing loan practices of Globe Asiatique Realty Holdings Corp. is most welcome.

On the surface, the Other Working Groups program (OWG) looks like a well-intentioned undertaking. It was designed to make decent housing units accessible to “workers who are not formally employed but earn money through small businesses.” But two years down the road, the program’s record is littered with dead men, missing or fictitious borrowers, fake Pag-Ibig members and duped “workers” who took out bogus loans on yet unfinished houses, most of them, if not all, apparently unaware they were doing so. To make matters worse, the documentary requirements for their loans are incomplete, or lack the necessary signatures, or if they have any, these are forged. Add to this list the “below standard, unoccupied and closed units.” We might as well call the OWG a program of “haunted houses” or “ghost towns.”

This program has the hallmarks of a scandal that can only grow worse if left unchecked. The OWG is being bankrolled by the Home Development Mutual Fund (Pag-Ibig), a savings and housing finance agency, whose funds come from mandatory savings deducted from the monthly salaries of government and private sector employees all over the country. The ease with which Pag-Ibig allowed the program to proceed smacks of a lack of care and study, if not corruption. It is Pag-Ibig’s primary responsibility to protect these funds for its members.

Delfin Lee, president of Globe Asiatique Realty Holdings Corp., justified the OWG by claiming that it was a “compromise” he reached with Pag-Ibig in 2008. He had complained about Pag-Ibig giving him a hard time collecting the loan proceeds for Xevera housing units in the towns of Bacolor, Cavite and Mabalacat, Pampanga. The compromise was reached through then Vice President Noli de Castro’s mediation and approved by the Pag-Ibig board. It is “a new membership category that was started because of my complaint,” Lee said.

But Pag-Ibig sources told the Inquirer that the OWG bent some rules on securing Pag-Ibig loans by reducing the requirements for membership. Also, the processing of loan applications for Globe Asiatique’s Xevera housing units was fast-tracked and took just one to three days instead of the usual five to six months.

The program has allowed Lee to collect nearly P7 billion during the past two years, the sources said. But Lee said, “I figured we have to come up with special arrangements but in return I will guarantee this account for five years.”

Lee also justified the award of multiple housing units to some applicants and the use of dummies, saying there is no law banning these practices. What is important, he said, is that the loans will be paid.

But laws have been violated. Misrepresentations have been made. Documents have been falsified. All in the name of “other working groups” which include the unemployed, students, Filipinos dependent on OFW remittances, signatories who go missing after “getting” the loan, and even dead persons. If this is not fraud, what is?

So now, billions of honestly earned pesos, hard-earned savings, the fruits of blood and sweat of millions of Filipino workers, held in trust by Pag-Ibig for their emergency or future use are now in real danger of being dissipated “in the name” of non-members. It is hard to imagine how those savings can be preserved when safeguards that were precisely designed to keep them intact are being set aside.

House Majority Floor Leader Neptali Gonzales II, who has called for an investigation of this suspicious housing loan scheme, warned of a possible “financial crisis.” “This is worrisome,” he said. “We don’t know how much this would impact on Pag-Ibig in particular and the economy in general.”

At this point, few people know how big the program is and how much money is involved. Pag-IBIG officials say Globe Asiatique was able to take out loan proceeds on behalf of borrowers in another housing project, Sameera—again, without proper documentation despite the Xevera experience?

Xevera could just be the tip of the iceberg. How many other developers out there are taking advantage of this scheme or some variation of it? A deeper investigation is very much in order.