‘Sendoff gift’ for VP boys hit

By: Gil C. Cabacungan - 9 years ago

ERICE: Money the end all?

Caloocan Rep. Edgar Erice on Thursday blasted what he called a pabaon (sendoff gift) of departing Home Guaranty Corp. (HGC) appointees of Vice President Jejomar Binay in a move to bid out the disputed Smokey Mountain project.

In a privilege speech on Wednesday night, Erice said the so-called “Binay boys” led by HGC president Manuel Sanchez were maneuvering into selling the property while negotiating with R-II Builders Inc. a deal brokered by lawmakers that would have ended the mounting interest costs paid by the government on the 15-year Smokey Mountain Development and Reclamation Project (SMDRP).

“We (lawmakers) were bent on resolving this issue but they had dark intentions. We were made fools. They told us they were ready for a settlement but they acted like Judas behind our backs and moved to sell the property anyway,” Erice said.

During the negotiations, Erice said state-owned HGC issued bidding notices for the sale of Smokey Mountain at a floor price of P1.8 billion, including its common areas that would destroy the master plan for the entire property.

Erice said HGC was pushing for a “fire sale” even though R-II was willing to pay HGC P2.9 billion or higher depending on ownership claims to be submitted by HGC on other parts of the property. Erice pointed out that the National Housing Authority (NHA) had offered to put up P4 billion to pay for the properties guaranteed by HGC in Smokey Mountain.

“Is HGC avoiding a settlement because it will not get a profit or commission from the properties over which they were fighting? Should money be the be-all and end-all, Mr. Speaker?” Erice asked.

Midnight deal

Ako Bicol Rep. Rodel Batocabe said Sanchez and HGC executive vice president Corazon Corpus “took advantage of the situation and published the invitation to eke a midnight deal before they leave which is highly brazen and in utter bad faith.”

The HGC is the guarantor of the Smokey Mountain project but due to its cash problems, it was unable to pay the project’s creditors, including the Social Security System. The HGC is obliged to pay P500,000 a day in interest, or more than P2.7 billion in interest expenses alone.

Erice questioned why HGC had held on to these assets despite being mired in debt and mounting interest payments while turning down offers from R-II and NHA.

“Is it true that these officials are hanging on to the Smokey Mountain Project assets because HGC officials are making a profit?” Erice asked.

He noted that HGC’s track record showed a series of spurious transactions that put the state-owned company at the losing end.

He cited the case of then HGC president Gonzalo Bongolan who sold a 2.8-hectare property in Tondo, Manila, in 2004 for P13,000 per square meter, or way below its market price of P25,000 per square meter. The HGC lost P300 million from the deal.

Rush to sell

Erice said HGC also sold three luxurious, hillside Apec Villas at Triboa Bay, Subic Bay Freeport in Zambales province, for only P41.5 million, or less than a third of its market price of P133 million.

“It’s easy to detect corruption in these sales. It should not be a surprise if HGC is holding tightly to its last remaining assets just because they will earn handsomely,” he said.

Erice said the Commission on Audit itself had recommended that HGC enter into a settlement with its creditors as its interest payments had ballooned to P16.8 billion from 2002 to 2012, or nearly five times its P3.4 billion assets.

He said this was the reason the government had to inject P12 billion in emergency funds to HGC to save it from bankruptcy and avoid a domino effect on housing loans.

Despite being bankrupt, Erice said the management could still afford to spend P25.919 million for its officials and P14.081 million in retirement benefits.

Erice said Sanchez and the other Binay appointees on the HGC board were already on their way out of the corporation as their one-year term was not extended by the President.

“Why are they rushing to sell assets when they are already in a holdover status? Propriety and decency dictate that the old board should let the incoming officers determine how to administer their assets,” he said.