The real deal

(Second of Three Parts)

In 2008, Globe Asiatique Holding Corp.’s Xevera project in Bacolor, Pampanga was sold out, prompting GA to develop Xevera 2 in Mabalacat City.

For this project, GA signed on with the Home Mutual Development Fund (HDMF) or Pag-IBIG Fund for a Funding Commitment Line (FCL) under a “Window 1” Classification. Lee also invested over P500 million of his own money to begin the project that aimed to build 10,000 housing units in a new township.

Once enrolled under the FCL program, GA needed to sign with HDMF a Funding Commitment Agreement (FCA) which is the guarantee of funding support from Pag-IBIG.  Conditions to the agreement include the following: GA can help with loan applications of buyers of its units; buyers must be qualified to avail themselves of  loan from HDMF; in case of default of payment of amortization for three months or for any breach of warranties, GA must buy back from HDMF the buyer’s contract to sell during the first two years of the loan; and GA can collect the monthly amortization of buyers during the first two years of the loan and remit them to HDMF through a collection servicing agreement (CSA), among others.

A total of 17 FCAs were signed between GA and HDMF covering P6.5 billion.

In 2010, there was a newspaper report that GA breached its contract with HDMF and that the Xevera project was a ghost town. HDMF cancelled all FCAs and CSAs with GA, and refused to accept GA’s remittances of loan amortizations and direct loan payments of Xevera buyers. This “unilateral and arbitrary” cancellation was the subject of a civil suit won by GA. The case is now on appeal before the Supreme Court.

Following the Aug. 31, 2010 cancellation of GA’s contracts with HDMF, the latter filed a complaint with the National Bureau of Investigation against Lee and several other GA officials for syndicated estafa. Several suits followed, including those from 28 buyers (out of some 6,000 buyers at Xevera 2) who claimed they were victims of double sale. NBI endorsed the case to the Department to Justice for preliminary investigation. A case was filed with the RTC of San Fernando, Pampanga which issued a warrant of arrest for Lee and the other accused which includes Lee’s son Dexter, GA accountant Christina Salagan, GA documentation head Cristina Sagun, and lawyer Alex Alvarex.

On appeal, the Court of Appeals dismissed the charges against Delfin Lee, Sagun, and Alvarez and quashed their warrants of arrest. And because at least five people must be involved in syndicated estafa which is a non-bailable offense, the CA effectively reduced the charges to simple estafa, a bailable crime.

However, Lee remains in jail on the strength of a temporary restraining order issued by the SC on the CA decision. (To be continued)

‘Entente cordiale’ needed

The recent deployment of a deep sea oil drilling platform well within Vietnam’s Exclusive Economic Zone can be seen as China’s first retaliatory action in the aftermath of US President Barack Obama’s visit to four Asian countries including the Philippines.

Observers believe that China’s action created a dangerous precedent in international relations. A country can now take advantage of its size and power to bully its neighbors in great disregard of international law.

If this action is not strongly condemned and brought to an end, China is likely to intensify its provocative actions, thus, bringing the world back to turbulent times when military power and aggression could make up national supremacy.

It seems the only way to stop China’s actions is to form an “entente cordiale” similar to what happened in Europe during the early 20th century when France, Britain, and Russia agreed to face the aggressive Germany.

The Philippines and Vietnam should assert their influence with the ASEAN and get all Pacific powers involved in pushing back China. All we can do is to make China realize that it cannot divide and conquer its neighbors.

However, it is unrealistic to expect that China will stop asserting its claims in the South China Sea.What might happen is that China will continue with its assertive moves but stop short of using military forces and avoid direct confrontation with the US.

Meanwhile, the People’s Liberation Party should cooperate with Vietnam in activities both regional and international.

The coming ASEAN Summit is a golden opportunity for the two countries to join hands to expose China’s flagrant violations of international law. It is high time that ASEAN should make a clear and solid position as a regional association to voice concern over China’s aggressive behavior towards its members.

Corruption jacking up costs

Unless the President puts his foot down, the unabated corruption at the customs zone will hurt the economy.

The “tara” or the amount of money that importers have to shell out for their cargoes has also risen considerably due to corruption. It is said that the cost of having plywood imports released has gone up three times due to this.

No wonder the Bureau of Customs has not been hitting its collection target. What should be going into public coffers is diverted into the pockets of corrupt Customs officials.

What’s worse is that businessmen who are victims of corruption are forced to pass on the increased transaction costs from their dealings with the Customs bureau to their customers. This is the reason why prices of construction materials have been increasing.

And while the importers haggle with Customs personnel, their cargoes remain in the Customs zone, resulting in accumulation of container vans at the ports. Sometimes, importers do not mind paying the higher demurrage fees for the delayed release of their cargoes instead of tolerating corruption.

Among the construction materials whose prices have gone up are reinforcement bars, roofing materials, wood panels, tiles, nails, and even cement due to the effects of the daytime truck ban as well as higher demurrage costs as the imported materials are not taken out of the Customs zone immediately.

Truckers have imposed a 50 percent increase in their delivery charges for 20-and 40-footer container vans due to the daytime truck ban in Manila that meant an extra two days in the delivery of cargoes.

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