Tony Hidalgo responding to his friend named "Tong" (Part 2):
MY OPINION OF MANNY VILLAR 2
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.