The amount represents NHMFC’s pro-rata shares in the proceeds of the sale of non-performing loans (NPLs) sold to a special purpose entity- the Balikatan Housing Finance Corp. Inc. (BHFCI).
The bad loan sale consists of low-cost housing mortgages created from the grant of housing loans by NHMFC using wholesale funds lent to it by SSS and Pag-IBIG Fund.
It was then relent to SSS and Pag-IBIG Fund members under NHMFC’s Unified Home Lending Program.
The bad loans were sold by NHMFC under a joint venture arrangement to DB Real Estate Global Opportunities in May 2004. The two (NHMFC and DBGO) later established Balikatan Housing Finance Inc. as the SPE to manage the sold accounts.
From the proceeds of the sale, the NHMFC should remit to P3.29 billion to the SSS, and another P462 million to Pag-IBIG.