Press Release
October 4, 2010

Senate inquiry into Pag-IBIG housing loan mess to commence
Binay, De Castro, Quimbo, GA's Lee invited to Thursday hearing

The Senate Committee on Banks, Financial Institutions and Currencies will open its inquiry on Thursday into the alleged irregular housing loan transactions between the Home Development Mutual Fund (Pag-IBIG Fund) and private developer Globe Asiatique Realty Corporation, Inc.

Sen. Serge Osmeña III, chairman of the committee, said the inquiry seeks to introduce pertinent amendments to the charters of the Pag-IBIG Fund and other government-owned and controlled corporations that deal with housing loans to protect the integrity of the government's housing financial system.

"We need to enforce the protection of the deposits made by members of the Pag-IBIG Fund," Osmeña also said. "Otherwise, they will bear the losses of scams or mismanagement."

Osmeña pointed to the losses of SSS, GSIS and Pag-IBIG in the Unified Home Lending Program (UHLP) in 1997, where 70% of the losses were written off. He also recalled the RSBS scandals in 1992, which ended in bankruptcy for the pension fund of the Armed Forces.

He added the probe will dig deeper into why the housing firm was allowed to qualify the borrowers on behalf of the agency, putting at risk some P7.1 billion in housing mortgages just for the two Xevera projects in Pampanga.

The senator noted revelations made during the Senate Committee on Finance hearings into the proposed 2011 budget of the various housing agencies that of the 9,951 self-employed Pag-IBIG members who were qualified and approved by Globe Asiatique, 400 of the borrowers denied applying for housing loans, 1000 could not be located and 200 had incomplete documentary requirements. The "bad" loans amount to about P1.1 billion.

"We will look closely into the allegedly fraudulent financial arrangement between the Pag-IBIG Fund and Globe Asiatique and make sure that such arrangements are not repeated," Osmeña said.

Vice President Jejomar Binay and former Vice President Noli de Castro, current and former chairmen of the Board of Trustees of the Pag-IBIG Fund, respectively, have been invited to shed light on the controversy. Rep. Romero Federico S. Quimbo, former Chief Executive Officer of the agency, was also invited.

Others invited guests are Finance Secretary Cesar V. Purisima, Civil Service Commission chairman and member of the HDMF Board of Trustee Francisco Duque, Pag-IBIG Fund Officer-in-Charge Emma Linda B. Faria, Chief Executive Officer Jaime A. Fabiaña and other officers, and Delfin Lee, chairman and president of Globe Asiatique Realty Corp., Inc.

The hearing will start at 9 a.m. on Thursday, October 7th, at the Sen. Geronimo Pecson Room at the 2nd Floor of the Senate Building.

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