No Senate clearance in housing mess

MANILA, Philippines - This refers to the article that came out in your Dec. 13, 2010 issue entitled, “Senate clears Globe Asiatique of housing irregularity with Pag-IBIG,” written by Christina Mendez.

Contrary to what was stated in the article, the Senate Committee on Banks, Financial Institutions and Currencies, which I chair, has not cleared any individual or entity involved in the scandalous multibillion housing transactions between the Home Mutual Development Fund (Pag-IBIG) and private developer Globe Asiatique. In particular, the committee has never cleared Globe Asiatique or any of its officers. They are being charged with syndicated estafa by the Pag-IBIG. The evidence of fraud against them is overwhelming.

Records submitted by the Pag-IBIG show that fictitious borrowers were submitted by Globe Asiatique to avail of millions of pesos of fund loans. A Pag-IBIG official had even testified that Lee’s bad loans had already reached P4 billion.

The committee is still in the process of determining what laws were violated when officials and members of the board of the Pag-IBIG gave Globe Asiatique preferential treatment for its Xevera Pampanga housing project, which was confirmed during the Senate hearing last week by Mr. Juanito Eje, vice president of Pag-IBIG’s Wholesale Lending Group. Mr. Eje had said that Globe Asiatique enjoyed special treatment – such as a higher funding commitment line of P5 billion, which is 10 times higher than normal, and exemptions from requirements under Pag-IBIG Circular 259, all of which were not made available to other housing developers.

Other housing developers who also attended the hearing confirmed they could only avail a maximum of P500 million funding. They were not informed that Pag-IBIG had made available to Globe Asiatique a funding that was 10 times bigger than the funding commitment line for housing.

The act of giving undue favors to Globe Asiatique was a breach of good management practice. The committee is now looking into the possible collusion with and bribery of Pag-IBIG officials and Globe Asiatique officers in defrauding the Fund.

The purpose of the Senate committee hearing is to improve the process and plug the loopholes in the loan activities of Pag-IBIG by amending its charter. But if the committee finds any violation of criminal laws, it would not hesitate to recommend to the proper bodies the prosecution of those criminally liable.

Thank you very much for giving space to this clarification.