HGC pays P12-B debt

MANILA, Philippines - Housing agency Home Guaranty Corp. (HGC) has paid off a P12-billion debt and now projects a net income of P554 million in 2015 and P870 million in 2016.

HGC is mandated to mobilize private funds for public housing through a system of guarantees and fiscal incentives. Under the present administration, HGC guaranteed P96.04 billion of private investments in public housing translating to 60,883 housing units.

Settling HGC’s P12-billion obligation has been a priority of the current administration since it assumed office in September 2010. According to HGC president Manuel Sanchez, “what should be made clear are the following: HGC’s debts was a result of bad business decisions during previous administrations; Under the current management, HGC’s operating expenses is just about half of what it earns; The current HGC management will not resort to another bond flotation to pay off its obligations; HGC’s inventory of acquired assets, when liquefied, is greater in value than its debts; and HGC has yet to receive P35.927 billion of its P50-billion charter-authorized capitalization from the government.

Recognizing HGC’s crucial role in the housing sector, the government extended assistance to HGC to retire its P12 billion obligation through a “cash-for-assets” swap scheme. HGC assets totaling P12 billion worth had been earmarked for the purpose. HGC, however, will continue to manage, sell and remit the proceeds of the sale of the earmarked assets to the government.