Erap’s ex- lawyer says HGC losses bigger than stolen PDAF

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Lawyer Alan Paguia scored the government for deliberately ignoring the gross mismanagement of government-owned and -controlled corporation Home Guaranty Corporation (HGC) which allegedly has resulted in accumulated losses of P13 billion over the years.

“The government and the media are focusing too much on the alleged P10-billion scam involving the priority development assistance fund of the lawmakers. While that is good, let us take note that there are far bigger cases than the pork scam which this government has been ignoring and one of (them) is the mismanagement of the HGC which no less than the Commission on Audit (CoA) has exposed,” Paguia said.

“Everyone seemed focused on the abuses of the pork barrel fund to the neglect of other public officials also being found by the CoA to have committed grave abuse of discretion and authority for personal gain,” said Paguia, known for being one of former President Joseph Estrada’s lawyers when the latter was facing plunder charges before the Sandiganbayan.

Last week, Paguia filed plunder and graft cases against officials of the HGC before the Office of the Ombudsman based on COA reports.


“I didn’t even have to do a comprehensive research work as the CoA already provided the basis for the filing of the case,” Paguia said.

In a seven-page complaint, he accused HGC president Manuel Sanchez and former president Gonzalo Benjamin Bongolan of plunder and graft for alleged acts that resulted in “huge financial losses” by HGC.

Paguia cited COA’s annual reports on the HGC’s financial and management performance from 2009 to 2011 as bases for accusations of specific acts of mismanagement and questionable financial decisions made by Sanchez and Bongolan as HGC top honchos.

“I was compelled to file this case because I was worried that these abuses happening at the HGC may end up forgotten and neglected,” he said.

As a GOCC, Paguia said, the HGC is mandated by its charter (Republic Act 8763 or the Home Guaranty Corp. Act of 2000) to operate a credit guaranty program in support of the government’s effort to promote housing ownership.

The HGC performs a vital role in the implementation of the country’s housing program by providing risk coverage or guarantees and fiscal incentives to banks and financial institutions to grant housing development loans and home financing to qualified Filipinos.

But based on COA reports, Paguia said, Sanchez and Bongolan could be guilty of abuse of power and authority as well as criminal acts.

Sanchez was appointed to the HGC by President Aquino in September 2010 replacing Bongolan who is now vice president of the Philippine Commercial Capital Inc.

Meanwhile, Sanchez, after being charged with plunder and graft last week, denied any involvement in the losses incurred by the agency.

“Not under my watch,” Sanchez he said disputing allegations of losses and corruption in the institution that he started to head only in 2010.

Sanchez said the current HGC management had no hand at all in the problems that the agency now faces as these began between 1984 and 2009.

He explained that the current debts were the result of guarantees made by the government in failed housing projects through the sale of Asset Participation Certificates (APC) during the period.

Since the previous management of HGC could not pay the investors in the failed APC projects, the agency resorted to bond flotation in 2002, 2004 and 2006 that led to its P16 billion debt, he explained.

Sanchez also clarified that the car plan and the early retirement program of HGC also took place in 2004 which again was not under his watch.

He said the current HGC management has nothing to do with businessman Delfin Lee and the so-called Globe Asiatique housing scandal.

In fact, Sanchez said, one of the reforms he initiated when he assumed office was to blacklist developers with bad records.

He emphasized that the foreclosed assets acquired by the agency, such as Smokey Mountain and the Manila Harbour Centre, the Central Market at the Old Bilibid Compound in Manila, the National Government Center and the Commonwealth Market in Quezon City, all had legal problems and could not be sold so that the government could recover its investments.

Lease agreements for the Commonwealth Market, he said, were signed way back in 2005 while the sale of the APC Villas took place in 2007, long before he was appointed to HGC.

When the current management of HGC took over in September 2010, Sanchez said they immediately investigated the failed APC projects that had led to huge losses for the agency.

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