House panel to probe Home Guaranty Corp losses

MANILA, Philippines - The House committee on housing and urban development is set to look into billions in financial losses incurred by the Home Guaranty Corp. (HGC).

Rep. Bernadette Herrera-Dy of the party-list group Bagong Henerasyon filed Resolution 549 that pave the way for the investigation.

In her resolution, Herrera-Dy said the government “incurred substantial losses as a result of anomalous transactions entered into by HGC officials starting 2002.”

“These transactions has put the National Government in a highly disadvantageous position,” she said.

Citing reports by the Commission on Audit, she said the housing agency, aside from allegations that it has been mismanaged, lost substantial amounts particularly from the sale of its properties.

“The COA alleged that the losses were due largely to mismanagement by HGC officials – mainly sale of corporate properties way below market prices,” she added.

She stressed that among the more glaring anomalies “was the sale of a 2.8-hectare stated-owned property located in Vitas, Tondo, Manila, to La Paz Milling Corp. for P384,715, 800 or around P13,000 per square-meter, which was way below its actual fair market value ranging from P506,205,000 to P694,224,000.”

“From this transaction alone, the HGC lost around P121,489,200 to P309,508,200. This is grossly disadvantageous to the government,” Herrera-Dy said.

In her resolution, the party-list lawmaker said the government would be at the receiving end of the HGC’s string of questionable deals like the “zero coupon bonds” worth P7 billion it floated in 2006.

She said assets for disposition were left by HGC to deteriorate and that the titles of ownership were never placed in proper order, rendering their disposal rather difficult.

“It is worth noting that that national government is the guarantor to the HGC obligations, which puts the former in further jeopardy and will ultimately affect the budget allocation intended for the promotion and development of the country’s important social services such as education and health,” she added.

“The Home Guaranty Corp. should be a profitable venture if only it is managed properly. There is an imperative necessity for the House of Representatives to look into, inquire and investigate the corporation’s operations and alleged unscrupulous transactions in order to ferret out the truth, in the interest of justice and in aid of remedial legislation,” she stressed in her resolution.