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Here's an addendum to the exchange between Tony Hidalgo and Tong Puno. It
really is important to be enlightened about the background of Manny Villar's
wealth in light of his quest for the presidency. He is hell bent in covering
his tracks and gaining more wealth at the expense of the nation.
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Dear Tong,
To believe in Manny Villar’s “cause”, whatever that may be, is certainly
your prerogative, brod. But it does not allow you to distort the facts—to
say that black is white or that greed is good.
Winnie Monsod’s writings on Villar’s anomalies on the Paranaque
road projects are pretty clear. I don’t need to comment further on them.
But I will answer as briefly as I can the downright false and
sometimes outrageous claims you make concerning Villar’s “heroic” role in
the government’s low-cost housing program.
True, Villar built many thousands of low-cost houses over more
than a decade under the Unified Home Lending Scheme (UHLP) of the socialized
housing law (E.O. 90) that he and his CREBA minions drafted and got Cory to
sign in 1986, during her emergency government when she had legislative
powers, by promising the pie in the sky of solving homelessness in the
Philippines once and for all. But he did this to rake in billions in profits
at the expense of the government, not out of a concern for the homeless
poor.
Look at the results of Villar’s thousands of houses under the
UHLP from 1986 to 1997 (when we reformed the UHLP to prevent Villar from
bankrupting the country). Villar became a billionaire. NHMFC, the financial
coordinator of the program, was bankrupted. The funders (SSS, GSIS,
Pag-Ibig) were stuck with billions in bad home mortgages covering Villar’s
houses and flirted with bankruptcy for a while. Eventually, these bad
mortgages had to be covered by the national government using its tax
revenues (including your taxes and mine) because the funders were covered by
a sovereign guarantee. Subsequently (beginning 2003 or 2004), the losses on
the bad mortgages had to be written off by selling them through special
purpose asset vehicles (SPAVS) at a fraction of their face value.
Meanwhile, look around you. *Nearly half of the residents of
Metro Manila still live in squatter areas!*
* *I repeat: Villar became a billionaire while the funders and
the national government suffered many billions in losses and the housing
problem is still there, as intractable as ever. Consequently, I strongly
disagree with your admiration of Villar’s record in low-cost housing. It was
motivated by greed and, in the end, enriched only himself and his cohorts at
the expense of the government and, ultimately, the taxpayers.
These outcomes were inevitable because of how Villar and his
buddies designed the UHLP. The roles of lenders, builders, and financing
agencies were jumbled up on purpose to benefit only the developers. Billions
were taken annually from the SSS, GSIS, and Pag-Ibig and given to the NHMFC
to disburse. The owners of the funds lost all control over how they were
lent out. But this control was not given to the NHMFC, which just allocated
mortgage quotas to developers (the Villar companies had the biggest quotas)
from the annual funds of the lenders and automatically released the face
amount of mortgages to the lenders upon submission of the mortgage papers.
No one checked the creditworthiness of the home buyers. The developers were
“originators” of mortgages—meaning that they went around the malls with
blank mortgage papers, waylaid passersby and enticed them to sign the
papers, and then went to the NHMFC to cash in.
This diabolical system without any financial controls was
designed by developers like Villar to rake in the profits. It resulted in
default rates of more than 70% in the mortgages and nearly caused a
Philippine economic crisis. It required the coordinated intervention of
HUDCC, the Dept. of Finance, SSS, GSIS, Pag-Ibig, and HIGC to prevent a
financial collapse. This was a very real danger then: we need only look at
the recent US financial crisis to see how bad home mortgages can drive even
the world’s largest economy to its knees.
*Naging bilyonaryo si Villar sa low-cost housing at the expense
of Filipino taxpayers. Kumita na siya, Tong. Huwag mo nang bigyan ng
medalya.*
Finally, you imply that I am inconsistent in my position on
Villar’s role in this program because you say that HUDCC had “boasted” of
its production of low-cost houses thanks to Villar’s “vision.”
This is not true. I was always critical of Villar’s profiteering
in low-cost housing and never claimed credit for the houses his companies
built. I was appointed HUDCC Secretary General by President Ramos in June,
1995. I spent a few months going through the documentation of the housing
program and holding intensive discussions with the developers’
organizations, lenders, the Dept. of Finance, and the HUDCC financial
agencies. Then I wrote a series of memos to President Ramos that explained
the hopelessly flawed nature of the program, the extent of the financial
problems it had created, and what needed to be done to prevent financial
collapse. After getting the President’s instructions to proceed in 1996, I
set up the inter-agency task force to reform the UHLP and we completed our
work and stopped the profiteering of the developers in 1997.
Your brod,
Tony Hidalgo
*Sent:* Thu, March 4, 2010 12:31:02 PM
*Subject:* Fw: Worth passing on ...
*Before passing this, I googled Antonio A. Hidalgo to make sure he is a real
person. I found that he is an economist and writer-publisher. My banker
friends are all anti-Villar. They know whereof they speak...*
*Am forwarding to you an email sent by Antonio HIdalgo who was the
Secretary-General of the Housing & Urban Development Coordinating
Council from 1992 to 1998. Here is his first personal anecdote on how
the real Manny Villar conducts his business; a far cry from what his
image-engineers are trying to portray. We must be dessiminating this
factual events to the people who will vote this coming May.
Tong,
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Whatever the merits of your abstract argument about the presumption of
innocence, let me assure you and the brods that Manny Villar is far from
innocent. He is as crooked and greedy as they come.
Winnie Monsod has made a very good case about his crookedness in the
Paranaque road projects that passed through his properties at his behest as
a lawmaker, enabling him to sell some of his land to the government at much
more than market prices and to reap many millions in property appreciation
from the government roads.
He is also guilty of making billions out of government funds for
socialized housing through a questionable, unsustainable scheme that
nearly destroyed our financial system in the 90's.
It's a bit complicated, but I was right there, trying to stop what was
essentially Villar's scheme as Secretary General of HUDCC (housing).
Fortunately, we succeeded (Dept. of Finance, Pag-Ibig Fund, SSS, GSIS,
HUDCC, HIGC-I was head of the multi-agency Task Force that did this) and
avoided a financial disaster in the Philippines that would have preceded the
similar one that recently hit the US and hurt the world economy.
It started when Cory became president. Villar, through the CREBA he
controlled, drafted a socialized housing law to spur low-cost housing in
the country. Cory approved it with her emergency powers, not
seeing through Villar's scheme.
To oversimplify, the law required the SSS, GSIS, and Pag-Ibig Fund to
put billions of pesos of their funds each year into a fund for mortgages for
low-cost housing (defined initially as 150T max, later going up to 250T
through the years).
This fund would be managed by the National Home Mortgage Finance Corp.
(NHMFC - an agency of HUDCC). The NHMFC then established quotas for
allocating the annual common funds of SSS, Pag-Ibig, and GSIS based on the
building capacities of registered developers. The largest quotas every year
were for the Camelia and Palmera (C & P) company of Villar which got a very
large chunk of the funds for their home mortgages.
Within the annual quotas under the law, builders could submit completed
mortgages and NHMFC would promptly buy them at their face amounts and pay
the builder. It was the builders actively sold mortgages in the malls and
everywhere else, approved the papers, and submitted them to NHMFC. NHMFC
only checked to see that the amounts of mortgages submitted by the builders
were within their annual quotas before paying, it did not check the
credit-worthiness of the borrower or even if the papers were genuine in that
the stated borrower was a real person and the house being mortgaged actually
existed. The situation the law created was unique in the entire world. The
pooled funds of SSS, Pag-Ibig, and GSIS were effectively put into the hands
of developers, who built the houses, found buyers willing to take out
mortgages, approved the mortgages, submitted them to the NHMFC, and got the
money in a few months. In effect, the builder controlled the credit funds
and approved the loans using funds that were not theirs but were funds of
SSS, Pag-Ibig, and GSIS.
This was a clear conflict of interest, for the builder would maximize
his profits from easy credit and would not bear the cost of mortgage
defaults. Naturally, lots of problems arose in just a few years -- fake
mortgages to fictitious borrowers, nonexistent houses sold to noexistent
buyers, and the more common case: real, but substandard, houses, hastily
sold to buyers who clearly did not have the capacity to pay back the loan
during the agreed loan period. By the time HUDCC took action to correct the
anomalous situation in 1996 under my
coordination, some 42 billion had been disbursed in mortgages under the
Villar scheme. Only a little more than 20 percent of the loans were
being repaid by borrowers, more than 70 percent of the mortgages had
been defaulted or were in serious arrears.
This drew the attention of the World Bank and the Dept. of Finance, for
the SSS, GSIS, and Pag-Ibig Funds are retirement funds. The funds are
commtted to future retirement obligations to the contributing members.
If the housing mess continued, the SSS, GSIS, and Pag-Ibig would default on
its retirement obligations, creating a financial crisis for the country.
All of us who changed the housing program to give the control over their
housing funds back to the SSS, GSIS, and Pag-Ibig, who would be more careful
in screening mortgages to make sure they would be paid for they would bear
the penalties of mortgage defaults -- we were all harrassed by Villar and
his minions in the CREBA who slapped law suits on us and attacked us in the
radio, TV, newspapers, etc. The Makati regional trial court found in our
favor and threw out the
CREBA-Villar law suit. For a long while, we lost in the media wars and
were painted as anti-poor bureaucrats. But the furor eventually died down
and the reformed housing program we fashioned has stood
the test of time. Since 1997, the repayment rates of socialized and
low-cost housing mortgages have high enough to make the program
sustainable. The looming financial crisis was averted and we are now in
better shape than the US , which did nothing to reform its own defective
housing mortgage system.
Of course, the share prices of C & P homes of Villar collapsed, for
everyone knew that the company was profitable only for as long as it
could bilk government funds. But then Villar found other rackets and the
rest, as they say, is history.
Tony Hidalgo*
Hi,
This guy is for real. He is the husband ofour writing teacher Ms Jing
Hidalgo Pantoja, UP Creative Writing Director, Palanca hall of fame
awardee. Our teacher just mentioned that this article is really arousing
interest.. Antonio Hidalgo was there. So we can truly pass this on.
T
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