Chamber of Real Estate & Builders' Associations, Inc.

A Home for Every Filipino

From the Chairman

Charlie A.V. Gorayeb

Charlie A.V. Gorayeb

Chairman of the Board, CREBA Chairman, CREBA Advocacy & Legislative Affairs Committee Honorary Consul General, Republic of Djibouti

GSIS & Pag-IBIG: A Tale of Two Agencies

The ghosts of past administrations continue to haunt us Filipinos, the latest of which is through the emergence of fund mismanagement problems of the Government Service Insurance System (GSIS), resulting in the suspension of its housing loan program for members.

This is utterly wrong and unfair. The housing loan is the biggest benefit that members have, and not only that; it is a big economic contribution. Other countries measure their economic barometer on the production of housing units because it generates a lot of employment and taxes, considering that there are 68 direct and indirect industries involved in the production of homes.

But here, we have government agencies brandishing the idea that because they miserably failed to collect P11 billion worth of mortgages, the members – mostly public schoolteachers and government workers – are the ones who have to suffer.

This, coming from pronouncements that they are financially sound and very strong, and even made P40 billion last year. But because of that P11 billion loan, plus some soured investments by the GSIS Board, and other alleged anomalous transactions committed under the term of its former president and general manager Winston Garcia, they have to put on hold granting housing loans to their members.

So whose fault is that? Is that the fault of their members who desire to have a roof over their heads? Certainly not. It is the fault of GSIS management for failure to collect payment for those mortgages, and because of that ineptitude, they are penalizing the rest of their members. This is wrong, very wrong.

CREBA believes that GSIS should continue granting housing loans, and put their house in order. The PS billion to be released by GSIS to PaglBIG Fund to serve as their conduit must be increased to P20 billion. We are confident it will make money for the GSIS given the PaglBIG Fund’s standing as a trust-worthy institution now.

One government agency that GSIS could learn from is the Pag-IBIG or the Home Development Mutual Fund. In line with recent events that transpired in the industry, the agency decided to institute much-needed reforms to strengthen the Fund.

Credit again goes to Vice-President Jejomar Binay who, upon assumption of the position as “Housing Czar” – chair of the Housing and Urban Development Coordinating Council (HUDCC) and concurrent chairman of the Pag-IBIG Fund – uncovered the alleged P6-billion anomaly involving “ghost borrowers” and a certain housing project in Pampanga.

Subsequently, the Vice President and Pag-IBIG president and CEO Atty. Darlene Berberabe launched a reform program that would change the policy governing single-borrower limits (SBL) for developers. The absence of stringent regulations involving SBLs before, along with poor monitoring of loans, actually allowed a few developers to borrow multi-billion peso loans from Pag-IBIG.

Aside from this, the system-wide reforms cover new policies in funding, adoption of the real estate mortgage (REM) as loan instrument, processing time of loans and titling of lands. During recent meetings with the Northern Luzon chapter from La Union down to Bulacan, CREBA was able to discuss these reforms instituted by Pag-IBIG. All these chapter officers and members have formed one consensus, and that is, they do not oppose any reforms especially those intended to strengthen the Fund.

They welcome these reforms because they know that by reforming the system, it will make the Fund a long-lasting institution that will create long-term development, as well. They are however hoping that such reforms be implemented on a maximum transition period, say two years, so that those already in the pipeline of developments or submitted shall not be affected. CREBA has no objections at all with these reforms, but we are supporting implementations which can be done through more efficient ways that will be most beneficial to all.

Published in the Manila Bulletin June 2011

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