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Globe Asiatique not cleared in housing scandal,

Osmeña says
12/13/2010 | 07:42 PM

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No parties have been cleared by the Senate committee on banks, financial institutions and currencies in
connection with the multi-billion-peso housing scandal involving the Pag-IBIG Fund and private
developer Globe Asiatique Realty Corp. Inc, the head of the committee said Monday.

Sen. Serge Osmeña III denied an earlier news report saying his committee had cleared Globe Asiatique
from liability in the housing irregularity that allowed it to procure Pag-IBIG loans worth over P6 billion
for its Xevera housing project in Pampanga.

“We never cleared Globe Asiatique or any of its officers," Osmeña said. “In fact, they are being
charged with syndicated estafa by the Pag-IBIG," he added.

On Oct. 29, Pag-IBIG and the Housing and Urban Development and Coordinating Council (HUDCC)
filed charges of syndicated estafa against Delfin Lee, Globe Asiatique’s owner, and 16 other officers of
the company for allegedly using Pag-IBIG funds for questionable housing loans and bogus housing

The criminal complaint, a non-bailable offense, filed before the Department of Justice, stemmed from
results of an internal Pag-IBIG Fund investigation into the anomalies, which allowed Globe Asiatique
to avail itself of a funding commitment line of P5 billion — 10 times higher than the amount other
developers are allowed to participate through the Pag-IBIG housing loans.

Small housing developers who also attended earlier Senate hearings on the issue confirmed they could
only avail of a maximum of P500 million in housing loans.

“The evidence of fraud is overwhelming," Osmeña stressed, citing Pag-IBIG records, which showed
that Globe Asiatique submitted fictitious borrowers in order to avail itself of the multi-billion-peso loan

Affordable housing mandate

Pag-IBIG is the government agency tasked to safeguard the nation’s savings program via affordable
housing programs. The Fund is also tasked to make affordable housing finance available for all Filipino

Under the Home Mutual Development Fund Law of 2009 (Republic Act 9679) — also known as the
Pag-IBIG Law of 2009 — membership in the Fund is mandatory for all government and private
Under strict conditions property developers may borrow from Pag-IBIG, which consists of money
collected from employees.

However, results of Pag-IBIG's internal audit showed that the loan documentations submitted by Globe
Asiatique were incomplete and deficient.

Many even lacked the membership status verification slip that determines a borrower’s eligibility for a
housing loan.

The processing of Globe Asiatique’s loan was also irresponsibly fast-tracked or facilitated, the audit
report showed.

“This is a breach of good management practice. The committee will check into collusion with and
bribery of certain Pag-IBIG officials in defrauding the Fund," Osmeña said.

Improve the law, not finger-point

In earlier Senate hearings, which began on Aug. 26, Osmeña accused Pag-IBIG of “opening" itself to
the problem by allowing Globe Asiatique to easily dip into the loanable funds.

However, in last Thursday’s hearing, he backtracked, saying that the Senate was not looking for
“suspects" in the housing loan scandal but for ways to improve the law.

“I cannot arrest anybody, I cannot force anybody," he said then.

The Senate might not conduct another hearing on the issue and will just create a technical working
group to come up with proposals on legislative amendments, he told reporters.

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, he reiterated on Monday.

However, he also said “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."

P6.6 billion in loans for a spurious project

In the Senate hearing on Oct. 5, Pag-IBIG officer-in-charge Emma Linda Faria said some of the
agency’s officers failed to enforce measures that could have prevented Globe Asiatique from taking out
at least P6.6 billion in housing loans.

The developer allegedly took out housing loan proceeds for buyers of its projects in Pampanga even
though the units were not yet complete, were below standards, were unoccupied, or were closed.

She also said that the report alleged that some of the buyers were fake Pag-IBIG members or ineligible
for membership, while others used spurious loan accounts.

Of the 10,000 buyers, 1,000 borrowers could not be located, 400 had already claimed loans, and 200
had incomplete documents.
The Pag-IBIG regional office in Pampanga also failed to validate those loans, Faria said.

According to her, Globe Asiatique was “authorized" to receive loan applications through the express
lane facility.

However, she would not identify those erring Pag-IBIG officers, saying that the investigation was still

Faria also alleged that in the latter part of 2009, there were “interventions" that threatened the safety of
Pag-IBIG employees who proposed to stop the processing of loans.

Pag-IBIG blacklisted Globe Asiatique on Oct. 15, which meant that the company may no longer deal
with Pag-IBIG in processing members’ housing loan applications, Faria said in a statement.

During the Senate hearings, key persons called to testify included Lucille Ortille, former executive
director of HUDCC; Wilma Flores, Pag-IBIG vice president for Luzon; and former Vice President Noli
de Castro, HUDCC chief under the former Arroyo administration.

In last Thursday’s hearing, the former Vice President, who was the HUDCC chief from 2004 to 2010,
denied allegations that Globe Asiatique received special treatment.

“I don’t think [there was] special treatment in the sense that their project was a pilot program," he said.

Meanwhile, the Fund assured its members that the agency’s budget for services and lending operations
remain “unaffected" by those “spurious" transactions.

“Our members need not worry about the safety of their savings. Their funds are intact, and will remain
under their names and will be lent or, at maturity, released only to them for their benefit," — DM/VS,