Press Release
September 12, 2010

Osmeña to push Senate probe into questionable Pag-IBIG, GA housing loan

Senator Sergio Osmeña III today vowed to dig deeper into the alleged anomalous financial arrangement between the Home Development Mutual Fund (Pag-IBIG Fund) and private developer Globe Asiatique that was extended about P7.1 billion in Pag-IBIG loans for two of its housing projects.

Osmeña, chairman of the Senate Committee on Banks, Financial Institutions and Currencies, took to task the Pag-IBIG for the loan arrangement it inked with Globe Asiatique, developer of the Xevera 1 and 2 and Samira housing projects in Pampanga.

"Yes, we will investigate this. This falls under the jurisdiction of the Committee on Banks," he said, noting that the arrangement was a case of conflict of interest.

He expressed concern over how and why the developer was allowed to qualify the borrowers on behalf of Pag-IBIG. "Of course, Globe Asiatique was only interested in making sure that it gets paid by Pag-IBIG. It did not care if the Pag-IBIG mortgages get repaid," he added.

The senator noted the testimony of Emma Linda Faria, officer in-charge of the Pag-IBIG fund, that P7.1 billion in mortgages had been given to 9,951 buyers whose qualifications were approved by Globe Asiatique by the virtue of an agreement between the developer and the government agency. The loans were made between July 2008 and June 2010.

"This is anomalous. Pag-IBIG or any lender should never allow this. It is a conflict of interest," he stressed.

Faria also admitted that after a post-validation process, or inspection after the monies had been released, 400 of the borrowers denied applying for a housing loan; 1,000 could not be located and 200 had incomplete documentary requirements. Because of these findings, she said Pag-IBIG had asked Globe Asiatique to refund the loans, amounting to about P1.1 billion.

"But how can he (Globe Asiatique President Delfin Lee) buy back those loans? I heard him in a recent media interview say that he has no money to pay that P1.1 billion," Osmeña said, raising concerns that Pag-IBIG Fund members and the public would have to swallow the huge loss and/or foreclose on the empty units, which would deteriorate over time.

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