HGC sees ’12 premium gains hitting P760M
Home Guaranty Corp. expects its guarantee premium income this year to hit P760 million, up from P632 million in 2011.
The agency said this was on top of the expected earnings from the sale of acquired assets, which were estimated to rise to P1.58 billion this year. An official said the agency had so far been able to dispose of P1.53 billion worth of acquired assets, or 96.5 percent of the target.
In 2011, the target revenue from the sale of acquired assets was set at P856 million. However, HGC hit only 15.6 percent of the 2011 goal.
“The marketing of these assets was put on hold to pave the way for the audit conducted that year,” the official said.
In a statement, HGC president Manuel R. Sanchez said the agency “has been earning more than we are spending. Our cost of operations is just about half of what we earn.”
However, a big portion of HGC’s earnings goes to servicing “inherited” debts, said Sanchez.
Bad business decisions and questionable housing projects, which HGC was ‘compelled’ to guarantee under the previous administrations, left HGC heavily indebted. These “sins of the past,” according to Sanchez, left HGC with more than P16 billion worth of inventory of foreclosed assets.
HGC is mandated to mobilize private funds for public housing through a system of guarantees and fiscal incentives. Since the enactment of its new charter in 2000, HGC guaranteed P272.8B worth of housing loans making possible the purchase/construction of 556,221 housing units.
Under the present administration, HGC guaranteed P71.31 billion of private investments in public housing translating to 48,949 housing units. This, despite HGC’s “undercapitalization.”
The agency’s 2000 Charter authorized a P50-billion capitalization from the government. To date, however, only P14.073 billion has been remitted to HGC through its annual budgets, leaving a balance of P35.927 billion.