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Globe Asiatique Pag-IBIG Primer


I. Current Situation

Globe Asiatique, a sixteen year old real estate development company, has been
accused in news papers of fraud and has reportedly been black listed by the Pag-IBIG
Fund for violating rules for housing developers.

The main allegation against Globe Asiatique is that it created fraudulent Pag-IBIG
accounts in order to gain access to home loans from Pag-IBIG Fund for its Xevera low
cost housing projects.

Globe Asiatique has countered the allegations by claiming the following:

1. It processed the approval of loans on the strength of the Membership Status


Verification issued by Pag-IBIG Fund. It presumed regularity in accepting
requisite papers submitted by Pag-IBIG members to avail of home financing.

2. It did not receive P 6 Billion to P 7 Billion worth of funds from Pag-IBIG but was
merely granted a Funding Commitment Line, which is basically an allocation of
loans and not a loan itself. Furthermore, it had completely built all the housing
units prior to the loan availment – proof of which are documents signed by home
borrowers attesting to the completed status of the homes subject to the home
loan.

3. Pag-IBIG Fund did not lose money in transactions with Globe Asiatique since it
assumes payments of loans that go into default, in accordance with the Funding
Commitment Line as well as HDMF Circulars 247 and 259. Globe Asiatique is
bound by a five year buy back guarantee which requires it to assume payment of
any defaulting loans within a five year period.

4. The Other Working Group provision used by Globe Asiatique is mandated by the
Pag-IBIG Fund Law of 2009 and this provision allows informal income earners to
become members of Pag-IBIG Fund.

5. No proof of income or credit background investigation is required for Pag-IBIG


fund members availing of home loans below P750,000 according to HDMF
Circular 247 and 259.
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II. Profile of Major Players

A. Globe Asiatique

(Soure: Globe Asiatique website www.galifestyle.com)

GLOBE ASIATIQUE REALTY HOLDINGS CORPORATION was primarily conceived to


support the vision of the government to provide housing for the low income Filipino
family. With this in mind, the company decided to start its first venture into residential
housing projects by developing one of its properties located in San Mateo, Rizal.

Named Sta. Barbara Villas I. This socialized housing project has been a showcase for
the Housing and Land Regulatory Board (HLURB) and for other developers because of
its extensive development and having passed all the required geotechnic landslide and
erosion tests conducted by the Mines and Geosciences Bureau.

As the demand for housing rose, the company continued to deliver superior
developments to meet the needs of Filipinos, uplifting not only the quality of housing but
also the standard of living.

Today, Globe Asiatique Realty Holdings Corporation, remains to be one of the few real
estate companies to be market-oriented and service-focused. With the experience and
gained competence acquired through the years, we have evolved into serving different
markets from the socialized levels to middle-class levels. Our company has advanced
its effort in continually designing plans and projects into progressive and successful
developments.

Date Established: November 22, 1994


SEC Reg. No.: ASO94-00010598

B. Pag-IBIG Fund or Home Development Mutual Fund

The Fund was established on 11 June 1978 by virtue of Presidential Decree No. 1530
primarily to address these two basic yet equally important needs. Under the said law,
there were two agencies that administered the Fund. The Social Security System
handled the funds of private employees, while the Government Service Insurance
System handled the savings of government workers.

Less than a year after on 1 March 1979, Executive Order No. 527 was signed. The
order directed transferring the administration of the Fund to the National Home
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Mortgage Finance Corporation, which was one of the operating agencies of the then
Ministry of Human Settlements.

Seeing the need to further strengthen the stability and viability of the two funds,
Executive Order No. 538 was issued on 4 June 1979, merging the funds for private and
government personnel into what is now known as the Pag-IBIG Fund. However, It was
only on 14 December 1980 when Pag-IBIG was made independent from the NHMFC
with the signing of PD 1752, which amended PD 1530. With the improved law in effect,
the Fund's rule-making power was vested in its own Board of Trustees. Likewise, PD
1752 made Pag-IBIG membership mandatory for all SSS and GSIS member-employees

On 1 August 1986, former President Aquino directed the resumption of Pag-IBIG


membership under Executive Order No. 35. Membership was still on a mandatory basis
but under more liberal terms. For one, contribution rate was reduced from three percent
to one percent for employees earning over P1,500. Employer share was likewise cut
from three percent to a fixed rate of two percent. The Maximum Fund Salary was raised
from P3,000 to P5,000.

1 January 1987 marked the return of the Pag-IBIG Fund to a voluntary program under
Executive Order No. 90. While many companies chose to discontinue their Pag-IBIG
membership, quite a number, including big companies like PLDT and Dole Philippines,
nevertheless opted to retain their membership to the Fund despite the voluntary nature
of registration.

III. Threats to the government shelter sector

All things considered, the present debacle raises the suspicion that the Pag-IBIG Fund
is less than prudent in relaxing rules governing the approval of loans to OWGs.

An erosion of confidence in Pag-IBIG Fund may not mean much as membership to the
fund is mandatory. Unless, of course, there is a ground swell movement to abolish the
fund – on the grounds that the dividends it pays out after 20 years is hardly substantial
and the loan facilities it provides is also provided by the SSS.

Remedial measures may include:


The exercise of stricter oversight on the Fund’s policies
Proof of income for OWG’s (income tax returns, bank records, etcetera)
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IV. Chronology

Date Event Supporting or Remark


related document
November 22, 1994 Incorporation and
Registration of Globe
Asiatique (GA)
1994 Accreditation with
Pag-IBIG Fund
1995 First Project with Pag- Sta Barbara Villas 1 Located in San
IBIG Fund Mateo, Rizal. 2260
units completed
July 21, 2009 Creation of the OWG Republic Act 9679 OWG Mandated
Facility into law.
July 13, 2009 GA utilizes OWG OWG MOA
March 19, 2009 Pag-IBIG Head Quits News clipping Miro Quimbo
claims to have
resigned to run as
representative of
Marikina under LP
May 27, 2010 GA President Delfin Letter with received
Lee reports to Pag- stamp
IBIG Fund CEO and
President Jaime
Fabiana that 1,000
housing loan
borrowers were
questionable which
have not paid since
take out
June 22, 2010 Pag-IBIG Fund CEO Letter with received
and President Jaime stamp
Fabiana responds to
letter of Delfin Lee
regarding the 1,000
questionable housing
loan borrowers
July 12, 2010 News Report of GA’s News Clipping
Initial Public Offering
July 12, 2010 News Report “Real News Clipping Memo effective
Estate developer July 1, 2010
uncovers unusually Copy of Memo signed by Fabiana
timed Pag-IBIG amended HDMF
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Memo” Circular 247,
allowing non Pag-
IBIG members to
abail housing
loans by paying
lump sum
membership dues
for one year

Mr. Lee said there


was no need for
new memo bec. 2
year buy back
scheme cut Pag-
IBIG defaults from
85 percent to 5
percent.

It was in this
report that Mr. Lee
called HDMF
officials lazy
July 13, 2010 News Report Pag- News Clipping
IBIG tightens rule on
initial loans Copy of Memo
July 14. 2010 News Report Pag- News Clipping Extended
IBIG extends old lumpsum
lending rule Copy of Memo membership
payment to
September 2010.
July 14 News Report Pag- News Clipping Made known to
IBIG Exec defends the public GA’s
housing agency 400 accounts in
question.
July 17 News Report Mr. Lee News Clipping
apologizes to Pag-
IBIG CEO
July 18 Column, Randy David News Clipping David asks media
on the apology photo men to look
story deeper into the
story, what was
the issue
July 19 News Report Delfin News Clipping Pag-IBIG calls
Lee swallows P300 press conference
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million humble pie to answer
allegations of Mr.
Lee:
- Divulged
information
of 400
million
worth of
irregular
loan
applications
- Pag-IBIG
claims to
have
released
300 to 400
million
July 19 Column, Jonathan News clipping
Dela Cruz
“If one developer has
approved 400
applications in GA,
how many more were
there from other
developers?
August 28 News Report, Globe News clipping GA Approved for
Asiatique’s P3.3 IPO
Billion IPO okayed
August 30 News Report, Firm News clipping First of two part
breaks Pag-IBIG rules expose series in
on loans Philippine daily
inquirer which was
followed up with
an editorial
September 3 News Report, Solon News clipping House files
seeks probe of shady resolution to
Pag-IBIG loans investigate bogus
loans.
September 3 News Report, Globe News clippings GA defers IPO
Asiatique shelves IPO
Pertinent documents
September 4 News Report, Pag- News clipping
IBIG cancels deal with
firm Pertinent documents
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(Letter of
Notification)