MANILA, Philippines?The Home Guaranty Corporation (HGC) on Wednesday asked the Court of Appeals to stop the Manila City Regional Trial Court from implementing its decision appointing a receiver for the properties of the Smokey Mountain rehabilitation project.

At today?s hearing, HGC through its counsel Eric Quevedo said the decision of the Manila RTC Branch 22 should not be implemented because appointing a receiver would mean HGC cannot touch the properties of the Smokey Mountain Development and Reclamation Project.

The Smokey Mountain project was a joint venture between the National Housing Authority as the landowner and the R-II Builders of businessman Reghis Romero as the developer.

It was one of the flagship projects of the government and carried three components?the provision of decent housing for Smokey Mountains residents; the clearing of the Smokey Mountain dumpsite and development of the 21.2-hectare land area into a residential and livelihood and commercial complex for the benefit of the area residents; and the reclamation of land from the adjoining Manila bay with an area of 79 hectares and its development into a residential, industrial, and port-related business center.

Overseas Workers? Welfare Administration (OWWA) disbursed over P500 million for the project for investment in Smokey Mountain Project Participation Certificates (SMPPC). Questions were raised even before the Senate on OWWA?s investment but OWWA maintained that it was above board since the SMPPCs have been established as government securities by the Office of the Government Corporate Counsel.

Also, the certificates are insured and fully guaranteed by the HGC on its full par value of P500 million so in case of default or non-payment, HGC?s guarantee payment will be in the form of three-year debenture bonds with an interest of 8.5 percent per annum tax-free.

However, in 2000, R-II Builders reportedly defaulted when the Asset Participation Certificates (APCs) had matured and amounted to P835 million.

After R-II Builders defaulted in its obligations, OWWA sought payment from HGC, which agreed to pay P500 million and to issue debenture bonds worth P335 million, plus interest of 8.5 percent annually.

In January 2003, HGC paid OWWA P500 million in cash and only P72 million in bonds. In June 2005, HGC promised to release P300 million worth of bonds. However, the 2005 Report of the Commission on Audit states that HGC issued only P100 million worth of bonds in October 2005.

Quevedo said HGC needs to take hold of the assets of the Smokey Mountain project in order for them to recover the payment that HGC has made as well as pay investors of the project.

The appeals court led by Associate Justice Noel Tijam gave them five days to submit their memoranda before the case is submitted for decision.