MANILA, Philippines—The Senate is determined: This “scoundrel” can’t get away with it.
The Senate is urging the Home Development Mutual Fund (Pag-IBIG) to file charges of falsification of documents against Globe Asiatique president Delfin Lee to flush out some 2,000 fictitious borrowers of his P7-billion housing projects in Pampanga.
Senators were adamant that Lee used fictitious borrowers to gain access to government funds and hinted that there could be collusion between Pag-IBIG officials and Lee.
Pag-IBIG officials said a post-validation process yielded a total of 1,965 spurious borrowers—944 borrowers denied having signed loan contracts and 1,021 borrowers have yet to be located.
At a hearing conducted by the Senate committees on banks, financial institutions and urban housing and settlement, Lee claimed that he could prove that his borrowers were real people who were mostly overseas Filipino workers, some of whom used their relatives to sign for them to avail themselves of Pag-IBIG financing.
Present spurious borrowers
Senate President Juan Ponce Enrile challenged Pag-IBIG officials to file falsification charges against the spurious borrowers so they can be cross-examined in court.
Enrile said Lee should be punished if it was found out that any one of those who allegedly bought Globe Asiatique housing units was fake.
“Don’t ever think you (Lee) can get away with it,” Enrile said.
Sen. Sergio Osmeña III said the problem was not bad accounts but fraud, the fake buyers with no intention of buying anything.
“Why close the barn doors when the horse has ran away? Collecting afterward is impossible,” Osmeña said.
In her opening statement, Pag-IBIG Fund deputy CEO Emma Linda B. Faria said the spurious borrowers surfaced only in May when the agency started its post-validation of Globe Asiatique’s Xevera housing projects which prompted the agency to ask Lee to pay P1.45 billion for the buy-back of 2,108 accounts.
“Pag-IBIG likewise discovered that Globe Asiatique, by its own admission, has been making the accounts of hundreds of questionable buyers current by paying for their monthly amortization … despite not receiving a single payment from these supposed buyers,” Faria said.
Pag-IBIG Fund CEO Jaime Fabiana said investigation showed that the borrowers—all of whom were based outside Pampanga—were reportedly given between P1,000 and P5,000 in cash to fill out the loan applications.
Lee, however, claimed that these were not fictitious borrowers because they had given handwritten notes to Pag-IBIG that they would withdraw their loan applications.
He showed as proof a May 24 letter from the Pag-IBIG Pampanga office saying that 351 borrowers had signified their loss of interest in continuing keeping their loans.
Lee, who maintained that the crisis would have been settled in just two months had there been no adverse publicity, said those who disowned the loans according to Pag-IBIG had actually withdrawn from the loans.
He added those who could not be located did not automatically mean that they were spurious, saying it just meant that they could not be reached.
“Like one lawyer who bought 11 units for himself and for his children and is about to relocate to the Philippines, or are just in the process of moving into their new home,” said Lee in his opening statement.
“I think Pag-IBIG will find more fictitious borrowers as they continue its validation process. He is in a very difficult position,” Osmeña said in an interview after the hearing.
Enrile said there was an effort to hide something here. “That’s the mess you created for your inutility,” said the Senate President, referring to the public officials for being evasive and misleading in their replies.
Noli de Castro
In an interview after the hearing, former Vice President Noli de Castro, ex-chair of the Housing and Urban Development Coordinating Council (HUDCC), said that it was clear that Pag-IBIG’s rules were broken and that it was possible that there was collusion between the agency and Lee.
Osmeña said it was clear that Pag-IBIG broke all the rules when it gave Lee access to P7 billion in loans to build the Xevera projects in Mabalacat and Bacolor, Pampanga.
“When you lend money, you want to be assured that he can pay you back. He has a good credit history of paying back loans, and he has collateral to back up his loans. In this case, I invented the people, because I wanted to get paid. After I was paid, it’s ‘goodbye guys, go after them because it’s none of my business anymore,’” Osmeña said.
Aside from smoking out the fake borrowers in the Xevera projects, the senators wanted Pag-IBIG to have a full validation of all of its exposure in Lee’s companies totaling roughly P12 billion since 1998.
Enrile reckoned that Lee’s fiasco was not an isolated event. “How many Delfin Lees are still in your portfolio?” he asked the Pag-IBIG officials.
Fabiana said there were similar cases of fictitious borrowers in Tacloban and Zamboanga but these were miniscule (P59 million and P29 million, respectively) compared with Globe Asiatique’s total takeout of P7 billion for the Xevera projects.
Enrile and Osmeña wondered why Pag-IBIG would let Globe Asiatique process the papers of borrowers for the houses he built with practically no guarantee of his financial capability to buy them all back as he promised.
Lee said that while he was not yet bankrupt he admitted that he could not even pay for 1,000 bad loans in the Xevera projects if Pag-IBIG started demanding payments.
Why P7B for Lee’s project?
In a statement, De Castro said there was “no malice or any hidden agenda” in the pilot program approved by the HUDCC, which allowed Globe Asiatique to build the Xevera projects.
Osmeña and Enrile, however, questioned Pag-IBIG’s decision to allocate P7 billion for an experimental project involving 9,165 borrowers, a quarter of whom have so far turned out to be spurious.
De Castro maintained that when the HUDCC crafted its policies, its board made sure that this was legal and that the members’ contributions were safeguarded.
He said the program could go awry if the policy was violated.
Lack of safeguards
Osmeña noted the lack of safeguards adopted by Pag-IBIG in lending to Lee as he was given so much leeway in accepting borrowers who did not abide by the mandatory submission of post-dated checks for 24 months.
Lee, however, denied getting preference from the government. He said some borrowers could not open checking accounts so Globe Asiatique allowed them to make payments every month.
Enrile said he had thought Lee was a “genius” based on the lengthy television ads and shows that featured him and his company.
He said he changed his opinion when news of the Lee’s alleged scheme to defraud Pag-IBIG came to light. “That’s the work of a balasubas (scoundrel),” Enrile said.
Gil Cabacungan, Jr.