MANILA, Philippines?The head of the Home Development Mutual Fund (Pag-IBIG Fund) found herself in the hot seat on Tuesday over the P7.1-billion payment made to a private developer that apparently presented fake borrowers.

Pag-IBIG officer-in-charge Emma Linda Faria showed up at the Senate finance committee hearing on salaries in government-owned and ?controlled corporations, but ended up getting a mouthful from lawmakers over Globe Asiatique Realty Holdings Corp.

?It?s the (people in) Pag-IBIG that should be in jail, whoever made this arrangement,? Sen. Sergio Osmeña III, chairman of committee on banks, financial institutions, and currencies, told her. ?It?s absolute stupidity and it?s happened before.?

Senate President Juan Ponce Enrile noted that Globe Asiatique appeared to have been a favored developer, a treatment that supposedly allowed it to receive billions from Pag-IBIG.

?They are, in effect, Pag-IBIG already,? he said in the hearing.

Osmeña was incredulous that former Vice President Noli De Castro, erstwhile housing czar, had all but cleared Globe Asiatique amid revelations that the firm had used dead claimants and ineligible borrowers to secure payments from Pag-IBIG.

?I can?t believe what you did,? he told Faria, ?and I?m very surprised when former Vice President Noli De Castro practically absolved Globe Asiatique.?

The senator added: ?This is totally unacceptable. This is gross corruption, 110 percent. That?s unforgivable.?

Sen. Franklin Drilon, finance committee chairman, asked Faria how Pag-IBIG could allow ?fake borrowers, obviously in cahoots with your regional people,? to carry out the fraudulent scheme.

?This fraud happened and you were not able to catch it in the head office,? he said. ?There was some flaw in your monitoring mechanism.?

Faria said Globe Asiatique was able to secure the P7.1-billion payment through the housing agency?s ?express lane? program. The new system allowed developers to receive applications and process them.

Osmeña said the arrangement involved a conflict of interest. He noted that it was in the Globe Asiatique owner?s ?own self-interest to make sure he makes the sale regardless on whether he makes the payment to (Pag-IBIG) or not.?

?Haven?t you learned your lesson from the past? You guys, you deliberately did this?? he asked Faria.

Faria said inspections of actual Globe Asiatique housing projects had been hampered partly by supposed threats coming from the developer. She did not elaborate, claiming the matter was still being investigated by the agency.

Osmeña said Globe Asiatique somehow pulled a fast one on Pag-IBIG when it secured the P7.1-billion payment for its controversial housing project, considering the 7-percent interest rate that came with it.

Faria said the rate was good as it covered a maximum payment scheme of 30 years for houses worth P750,000. Monthly amortization was P5,000 or 60,000 annually.

?Actually, they borrowed your money at 7 percent and even if he (owner) does collect, (he) can just put it in the money market, take more than that, and still pay you 7 percent,? Osmeña said.