Oct. 20, 2014. That’s the day of reckoning for the government’s Home Guaranty Corp. Congress leaders set that deadline for the HGC to repay P5.3 billion in overdue debts to us 35 million SSS members.
Let’s hope the agency under the Office of the President complies. Perhaps its president has run out of lame excuses to chisel us. If not, let the lawyers among us take him to court.
HGC president Manuel Sanchez attended the other Friday the House of Reps hearing of his agency’s 2015 budget. House officers called him to a back office. There they requested him to pay SSS the huge sum his agency has owed for two decades.
Sanchez, a 1980s congressman ousted for being a US citizen, reportedly dawdled. At best he would only promise to have his finance men look into it. Whereupon, the lawmakers said that’s what he’s been doing for years. So they gave him an ultimatum: pay up in 30 days, by Oct. 2014, for the SSS has waited long enough.
The HGC racked up the P5,284,071,071.65-debt from SSS funding of government mass-housing projects. It was supposed to pay interest on the investments, but reneged. So the SSS demanded full payment of the principal as well.
The Supreme Court as far back as 2007 had affirmed the validity of the SSS investments. In 2012 the Commission on Audit directed the HGC to settle its obligations. Also, to stop its wasteful spending and shady bond floats.
To make it easy on HGC, the SSS waived the penalties and surcharges, and consented to real property swaps. It stuck to the principal amount plus interests, in compliance with Bangko Sentral ng Pilipinas regulations, and laws on contracts and obligations.
Then SSS lawyers pleaded with HGC officers for direct mediation — but the latter snubbed meetings. The SSS then asked the Office of the Government Corporate Counsel to arbitrate the collection case.
The P5.3 billion the SSS is collecting consists (as of May 2014) of:
• 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 in compounded interest.
These were from five shelters-for-the-homeless that the SSS had helped fund:
(1) Smokey Mountain development and reclamation in the early 1990s, along Manila Bay, Tondo, Manila;
(2) Suburban Housing, in Rodriguez (Montalban), Rizal, for squatters evicted from government lands;
(3) Commonwealth Enterprise Zone, along Commonwealth Avenue, Quezon City, where government lands were parceled to squatters during the Arroyo tenure;
(4) Tahanan Homes, for the poor in Bataan and Bulacan provinces west and north of Metro Manila; and
(5) Village Properties, also for the poor in Cavite, Laguna, and Batangas provinces south of the metropolis.
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.
Controversy shrouds the Commonwealth Enterprise Zone. The HGC in the late 2000s bought the public market on Commonwealth Avenue ostensibly for sidewalk vendors. Yet it awarded stall-rental rights to dummy outfits of high HGC officials. Sanchez had promised to investigate HGC ex-president Gonzalo Benjamin Bongolan, but did nothing. Last March they both were charged with plunder for it.
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’s alibi to not pay SSS is that the HGC supposedly has no power or duty to pay compounded interest. Yet the agency’s corporate charter negates his claim. The Civil Code and BSP rules further allow compounded computation of interest, and punish non-paying swindlers. –Jarius Bondoc (The Philippine Star)
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