Gov’t agency cheating our SSS of P5.3 B

An agency under the Office of the President has been refusing to repay the Social Security System (SSS) P5.3 billion in obligations. And yet, Presidents habitually use SSS money for mass housings that hardly benefit its members.

The chiseling agency is the Home Guarantee Corp. (HGC), which owes the SSS principal and interest on long-matured bonds that financed shelters for the homeless.

The SSS is pressing payment of the P5,284,071,071.65 through arbitration by the Office of the Government Corporate Counsel (OGCC).

The case is expected to drag, to the detriment of the SSS, since the present HGC management is un-inclined to pay up. HGC president Manuel Sanchez, a former congressman deposed decades ago for being a foreign citizen, reportedly has snubbed all mediation meetings between SSS and HGC lawyers.

The SSS is a mutual provident fund of 35 million private employees, the self-employed, and their dependents. The government administers the funds for them, through Malacañang-appointed trustees. SSS funds come from members’ and employers’ monthly contributions, and investments in stocks and bonds. From the earnings, members and dependents draw retirement and disability pensions, death and burial benefits, and housing and disaster loans.

The HGC guarantees home developments to encourage more constructors, particularly of mass and socialized housing. Beneficiaries of such projects are marginal income earners, mostly non-SSS members. Presidents nudge their appointee-trustees in the SSS to participate in such housing starts to augment meager government funds, using the HGC’s guarantee power as come-on.

Of late the HGC has been in financial straits. Its trustees during the Arroyo administration, some still sitting in the present board, had engaged in fraudulent self-dealing and unauthorized multibillion-peso bond floats. Sanchez has vowed, but actually done nothing, to make them answer for it.

The P5.3 billion the SSS is collecting consists of, as of end-May 2014:

• P2,338,750,684.93 principal amount,

• P1,624,645,729.50 in basic 8.5 percent annual interest, and

• P1,320,674,651.22 jn compounded interest.

These were from five homeless shelter projects that the SSS had helped fund:

(1) Smokey Mountain development and reclamation in the early 1990s, along Manila Bay, Tondo, Manila;

(2) Suburban Housing, or relocation of squatters evicted from government lands to Rodriguez (formerly Montalban), Rizal;

(3) Commonwealth Enterprise Zone, or acquisition of the government land for redistribution to squatters along Commonwealth Avenue, Quezon City, during the Arroyo tenure;

(4) Tahanan Homes, for the poor in Bataan and Bulacan provinces; and

(5) Village Properties, also for the poor in Bataan, Laguna, and Cavite.

In the Smokey Mountain case, the main private developer R-II Builders has been pressing the HGC for full payment of the P4.5-billion guarantee. From the total, it will repay the SSS P2 billion and the state-owned Land Bank another P1.2 billion. Sanchez reportedly has been ignoring the collection notices and pleas for mediation.

The Commonwealth Enterprise Zone was particularly controversial. The HGC in the late 2000s acquired the public market on Commonwealth Avenue ostensibly for sidewalk vendors, but actually to award rental rights to front companies of high HGC officials. Former HGC president Gonzalo Benjamin Bongolan and Sanchez have been charged with plunder in March for it.

The SSS pressed for payment of the entire P5.3 billion after the HGC failed to pay interest. It feels aggrieved because it already had waived other charges and penalties, and also consented to land swaps to reduce the HGC obligations.

Before the SSS filed for OGCC arbitration in Dec. 2013, it tried direct mediation with the HGC, to no avail.

The HGC’s excuse for non-payment is that it supposedly has no power or duty to pay compounded interests. Its corporate charter negates the HGC’s claim. As well, the Civil Code and Bangko Sentral ng Pilipinas rules allow compounded computations of interests and punish non-paying swindlers.

The SSS asked the OGCC last week to speed up the arbitration and compel the HGC to pay up.

Based on the list of the controversial Disbursement Acceleration Program, Malacañang recently gave the HGC P400 million in capital infusion.

In the same DAP list was a P2.7-billion payment to the Swiss inspection firm Societé Generale de Surveillance. Questioned about this at the Senate last week, Finance Sec. Cesar Purisima said the payment was a sort of economic stimulant. He claimed that paying government debts improves a country’s credit and investment ratings.

Following that argument, news of HGC’s refusal to repay the social security pool of 35 million citizens could dent the country’s image abroad. More so since, that agency is under the Office of the President. -Jarius Bondoc (The Philippine Star)