Globe Asiatique housing mess fallout

Reporting of housing acquisitions by Pag-IBIG execs, staff welcomed

Barzaga says reports should include those in names of immediate family members

Press Release
September 16, 2010

Cavite Rep. Elpidio Barzaga Jr. has welcomed the move of Home Development Mutual Fund (Pag-IBIG Fund) officer-in-charge Emma Linda Faria to compel the firm's officers and staff to promptly report their acquisition of property in any housing projects of Globe Asiatique Realty Holdings Corp.

"This is definitely an exemplary step by Pag-IBIG's new management, in accordance with the safeguards of the Code of Conduct and Ethical Standards for Public Officials and Employees against potential conflicts of interest," Barzaga said.

Barzaga said the mandatory reporting requirement should include any Globe Asiatique properties in the names of the spouses, children, brothers, sisters or parents of Pag-IBIG officers and staff.

Faria issued a memorandum dated Sept. 11, ordering Pag-IBIG officers and employees to immediately report in writing their ownership of property in any projects of Globe Asiatique.

Barzaga also cited the need to look into any Globe Asiatique properties that may have been acquired by previous board members and officers of Pag-IBIG.

He pointed out that Globe Asiatique "apparently cultivated a relationship" with Pag-IBIG management long before then Vice President and housing chief Noli de Castro became fund chairman.

"The potential conflict of interest is evident. Once a Pag-IBIG board member or official has properties in a Globe Asiatique housing venture, then that officer assumes a direct and personal stake in the project," Barzaga said.

"Naturally, the officer will have an incentive to freely authorize the grant of as many loans as possible to borrowers who intend to purchase property in the same project, since the higher ownership and occupancy rates will invariably enlarge the value of the officer's assets," he added.

Both the Senate and the House are investigating the hundreds of millions of pesos worth of fraudulent loans granted by Pag-IBIG to phony borrowers that were supposed to acquire homes in Globe Asiatique's Xevera projects in Pampanga.

Excluding investment income, Barzaga estimates that Pag-IBIG collects some P1.6 billion in monthly contributions from eight million registered members, at a rate of P200 monthly per member, including the employer's share.

"Congress is obligated to exercise exceptional due diligence in guarding these hard-earned contributions of ordinary private and public sector workers," he said.

He also warned that any financial losses incurred by Pag-IBIG due to large-scale fraud would eventually lead to either all members paying for higher contribution rates; to the firm providing less loans and benefits to members; or to taxpayers ultimately extending extra subsidy to the fund.