• HGC clarifies allegations in April 8 Smokey Mt story


    [Publisher/Editor’s note: This letter from Home Guaranty Corporation is addressed to our reporter, Mr. Jefferson Antiporda]

    THIS is in response to your article titled, “Smokey Mountain deal ‘detrimental’ to workers” published in The Manila Times on April 8, 2015 involving the Home Guaranty Corporation (HGC).

    In the said article, you wrote that the group Bukluran ng Manggagawang Pilipino (BMP) expressed “serious concern” over reports about a compromise deal made between HGC and the camp of Reghis Romero II to absolve the latter of any legal liability in connection with the failed Smokey Mountain Development and Reclamation Project (SMDRP) and how workers would eventually be made to bear the brunt of failed projects such as the SMDRP between government agencies and private corporations in relation to HGC’s alleged P5.3 billion debt to SSS.

    Accordingly, HGC would like to clarify these two allegations.

    1. HGC has never made any deal(s) with the camp of Reghis Romero II and has no intention of absolving him or his group of any legal liabilities concerning SMDRP. In fact, HGC has filed several cases against Reghis Romero and his company, R-II Builders, precisely to protect the government’s interests in the project.

    2. HGC has already paid SSS P 876 million in interest for its investment in the project. At present, HGC has also offered to settle its outstanding obligation to SSS with properties of equal value and SSS is already evaluating our proposal.

    HGC would like to remind you that the SMDRP was a joint venture project between Reghis Romero’s R-II Builders, Inc. and the National Housing Authority (NHA) in 1993 to develop the Smokey Mountain dumpsite into a habitable housing project.

    R-II Builders, Inc. was supposed to finance all aspects of development but it failed to do so. To save the project, the National Government stepped in and raised the needed funding through the issuance of bonds called the Smokey Mountain Project Participation Certificates (SMPPC) backed up by the SMAP and the guaranty of the HGC. The SMAP included the 21.2-hectare Smokey Mountain site to be developed and the 79-hectare Manila Bay foreshore property to be reclaimed.

    To encourage investors, the government asked HGC to guarantee payment of the SMPPCs. SSS was among the investors and put in P 1.15 billion in the project.

    Despite the SMPPCs, R-II Builders did not complete the construction and thus, the project failed. HGC, as guarantor, assumed all obligations to investors who bought the SMPPCs amounting to more than P 4 billion, including interest. In exchange, the entire asset pool backing the SMPPCs was conveyed to HGC.

    For the sake of fairness and impartiality, I hope you publish this letter to clarify the issues raised by the BMP.

    Very truly yours,

    Home Guaranty Corporation


    Please follow our commenting guidelines.

    Comments are closed.