Cleaning up the housing sector

Professor Randy David might be in for a big surprise if he makes good his threat to run for in the second congressional district of Pampanga, whether his opponent would be President Gloria Macapagal Arroyo or presidential son and incumbent Rep. Mikey Arroyo.

David might find out that while he might be known and popular in the national stage, local Pampanga politics is different. He would probably realize that President Arroyo is genuinely loved and admired in Pampanga where people are not carried by the constant attempt by the opposition to demonize the President in national media.

Also, David might be going against the political history of Pampanga which, if traced, would show that politicians from Lubao where the Macapagals are from always beat politicians from Guagua, hometown of the Davids.

For sure David is very much aware of the congressional contest in 1998 between his brother, the highly-regarded lawyer Dante David and lawyer Zenaida Ducut who was ridiculed by the David’s supporters as a small-town lawyer from Lubao who flunked the bar exams twice.

Dante David took a beating from Ducut who is now chairman of the Energy Regulatory Commission.

Lubao politicians have also won over Guagua politicians when they go against each other in national poll contest. Two of the brightest Pampango political stars faced off in the 1957 elections— Diosdado Macapagal of LP and Lubao and Gil Puyat of NP and Guagua. Macapagal, as everyone knows, easily won that contest.

This is the same trend in the pre-Martial Law congressional contests where the perennial candidate from Guagua, the poet and orator with movie-star looks Amado Yuzon lost to two candidates from Lubao, first to Diosdado Macapagal and then to Jose Lingad.

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It looks like a major cleanup of the housing sector is taking place. And this is a development that both the business sector and the public at large should welcome.

According to recent news reports, the National Home Mortgage Finance Corp. has inked an agreement with a joint-venture group for the sale of the housing sector’s most delinquent accounts and serious effort to run after the country’s most delinquent housing loan borrowers.

Under the deal, the joint-venture group will pay NHMFC some P5.2 billion; in turn, the group will take over the management and collection of an estimated P42 billion in delinquent loans. This means that this huge amount, which has been the biggest black mark in the housing sector, can finally be dealt with decisively.

Where did that huge P42 billion in delinquent accounts come from?

It appears those loans were borrowed from government housing agencies from 1988 to 1996 under the so-called Unified Housing Loan Program. We surmise that the UHLP has been stopped since then. We guess that the amount would have ballooned to around P80 billion by now if one factors in interests.

How did the UHLP generate so much in delinquent accounts?

It’s not hard to guess the root cause of the problem. Many of our countrymen think that payment for a loan from a government agency is optional and not mandatory.

Why did it take the government 14 years before finally acting on this situation?

We can only speculate. Maybe, the government in the past felt that trying to collect that huge amount from 52,000 delinquent borrowers was a politically volatile situation. We surmise that many of those borrowers had connections or “padrinos” who made sure that the government collection efforts were warded off.

Or maybe, many of them were simply adept at evading collections.

We heard that a good number of these delinquent borrowers may have even sold the properties they built with the money they have not repaid, or are renting out said properties.

This is a classic case of “tubong lugaw”. Only in the Philippines can one make profit out of the borrowed capital he does not even intend to repay.

But we are glad the NHMFC has finally found a solution to this 14-year-old issue.

Finally, the government is recovering even just a portion of that huge debt that would have otherwise simply rotted away in its books as collectibles lost forever.

We are glad that Vice President Noli de Castro, housing sector head, is willing to take the political risk in implementing the agreement with the joint-venture group. True, this partial recovery and collection strategy was not authored by him since it appears the agreement was signed before he was named to the housing post.

Just the same, the implementation of the agreement needed the push of one who is willing to take the political risk. De Castro has taken such risks before, like the cleanup of the squatter colonies that used to line the south-bound and north-bound routes of the Philippine National Railways.

This one should be less volatile. Just the same, some people appeared eager to make political capital out of De Castro’s implementation of the recovery and collection program. It seems some parties have already baited some of our lawmakers into putting the NHMFC-joint-venture group plan in bad light.

It looks like delinquent borrowers and their patrons don’t give up that easily.

But neither would De Castro’s political will. Maybe the vice president wants the cleanup of these delinquent accounts to be part of the accomplishments of the housing sector during his watch. Nobody will quarrel with that. Unless you are a delinquent borrower.

If we were among the 52,000 delinquent borrowers, we would go and settle with the collection arm of the joint-venture group right away instead of making a political issue out of this move by the NHMFC.

We heard that the rates charged by the collection arm average a measly 14 percent—which is lower than the 16 percent that many of them were being charged when their accounts were still in good standing.

The good news is that the collection arm of the joint-venture group is willing to talk to them and examine options that are humane as far as the delinquent borrowers are concerned.

The better news is that the NHMFC finally recovered part of the money that the delinquent borrowers almost ran away with. The NHMFC, in turn, can now settle some of its obligations with the other government agencies that lent it the money for the defunct UHLP.

De Castro and the NHMFC may have to be ready with political brickbats being thrown their way as a result of this move. The wrath of delinquent borrowers should be expected.

Expect too that political personalities will piggy-back on this issue and hope that the angry delinquent borrowers could generate sympathy.

That may be wishing for the moon, though.

As far as other Filipinos are concerned, these delinquent borrowers have already benefited from the misplaced graciousness of the government in the past. It’s about time they return what they borrowed.

It’s unfair that the rest of us would bear the burden of the loans of the “manunuba.”

It took this country’s vice president to collect from them what is due to us all.–Alvin Capino, Manila Standard Today