PHILIPPINE REAL ESTATE and RELATED NEWS in and around the country . . .
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CA orders prosecution of Cherry Hills developers

By Mike Frialde
Wednesday, October 1, 2008 [ philstar.com ]


The Court of Appeals (CA) has affirmed the decision of the Department of Justice (DOJ) to proceed with the criminal prosecution of the developers of the Cherry Hills Subdivision in Antipolo City where a landslide happened in August 1999, killing more than 50 people.

In a 15-page decision penned by Associate Justice Martin Villarama Jr., the CA’s Third Division affirmed the Aug. 27, 2002 resolution issued by then Justice Secretary Hernando Perez that ordered the filing of criminal information against the subdivision’s developers for violation of Presidential Decree 957 (which regulates the sale of subdivision lots and condominiums) in relation to Batas Pambansa Bilang 220 (which sets the standards and technical requirements for economic and socialized housing).

In issuing the resolution, the DOJ reversed the order of the Antipolo City prosecutor’s office that dismissed the criminal complaints filed by several Cherry Hills residents against officials of Philjas, the subdivision’s developer, led by its president Tirso Santillan, general manager Hiroshi Ogawa, and assistant general manager Eliezer Rodriguez.

In a resolution last May 6, Justice Secretary Raul Gonzalez affirmed Perez’s findings and denied the motion for reconsideration filed by Philjas’ officials.

Santillan, in a petition for certiorari filed before the CA, questioned the validity of the information that the DOJ had ordered to be filed in court.

Santillan argued that they cannot be prosecuted for as many counts for the same offense arising from the same set of facts, as this violates their right against double jeopardy.

The DOJ, according to Santillan, lacks jurisdiction to determine violations of PD 957, saying it is the Housing and Land Use Regulatory Board (HLURB) which has primary jurisdiction to determine violations of housing and subdivision laws.

But the residents argued that double jeopardy could not be invoked considering that there is no conviction yet under the information for violations of PD 957.

The residents also argued that Presidential Decree 1344 did not vest upon the HLURB the authority to entertain cases which are criminal in   nature, but merely administrative and civil aspects.

They said the Philjas officers’ petition was intended to delay the speedy prosecution of the cases against them which have been pending since 1999. They noted that Ogawa had already jumped bail.

But the CA ruled there was no grave abuse of discretion on the part of the DOJ in ordering the filing of information against the Philjas officers.

Records show the HLURB had issued to Philjas a license to sell lots at Cherry Hills and was given until July 1992 to finish the development of the project.

For failure to complete the subdivision project, Philjas was granted an extension until March 1999.

Acting on the complaint of lot buyers, the HLURB conducted an inspection and discovered that the developer failed to follow the plan in the contract, including amenities such as landscaping, entrance gate and water tanks that were included in Philjas advertising leaflets.

On July 12, 1999, subdivision resident Bernardo Velos filed a criminal complaint against Ogawa and Rodriguez before the Antipolo City prosecutor’s office for violation of PD 957 in relation to BP 220.

On Aug. 3, 1999, a landslide struck Cherry Hills, killing 58 people and destroying several houses.

This prompted concerned government agencies, including a Senate fact-finding committee, to investigate whether Philjas’ officers should be held liable for the tragedy.

On Nov. 13, 1999, other residents filed similar complaints against Santillan, Ogawa and Rodriguez.

The cases were separately dismissed by the Antipolo City prosecutor’s office, but the DOJ reversed the decision, saying there was probable cause to indict Santillan, Ogawa and Rodriguez.

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RP banks’ exposure to soured assets amounts to P60 B

By Des Ferriols
Wednesday, October 1, 2008 [ philstar.com ]


The total exposure of banks in assets that were hit by the US crisis amounts to roughly P60 billion, but monetary authorities said the amount is well within the capacity of the industry to handle.

The Bangko Sentral ng Pilipinas (BSP) assured the public yesterday that it is on “high alert”, monitoring banks on a daily basis to establish their total exposure to the ongoing crisis in the US.

BSP Deputy Governor Ernesto Espenilla told reporters that based on the latest assessment of the central bank, commercial banks are estimated to have total exposures of about one percent of their total assets which stood at about P6 trillion.

It was earlier estimated that about six banks had exposures of about P17 billion to Lehman Brothers.

Including exposures to other troubled financial institutions such as Merrill Lynch, the total amount was closer to P60 billion.

According to Espenilla, these exposures covered investments in various financial institutions both in the US and Europe that would be hit one way or the other by the fallout from the US financial market crisis.

“The exposure is actually very limited and well within the capacity of the industry,” Espenilla said. “More importantly, no single bank is heavily exposed.”

The BSP has been mum on what it was doing to shield the country from the cascading impact of the US market turmoil but Espenilla said the impact was not really as heavy as the public perceived.

“We are on high alert, we are carefully monitoring commercial banks, establishing what really are their exposures and determining what measures are being taken to cover these exposures,” he said.

Thus far, Espenilla said the BSP is fairly confident that the industry as a whole had already built up adequate resources over the last decade after learning the hard way from the 1997 Asian crisis.

“The mechanism of the US crisis is no different from the 1997 Asian crisis when we went through the same problem,” he said.

At the time, Espenilla said the entire banking sector sustained bad assets of about P600 billion and even then, the size of this exposure was not considered significant.

“It was a problem only because the government was very deep into fiscal deficit and didn’t have the money for a bail-out plan,” Espenilla explained. “So we had to do it the hard way, all we could offer was tax incentives in order to let private money to come in.”

This time around, Espenilla said the banking industry is amply insulated by the capital buildup that it had gone through during the years that followed the Asian crisis.

The market was still awaiting the resolution of the $700-billion bail-out plan that was rejected by the US Congress, a development that sent stock and currency markets crashing.

“We’re optimistic that this bail-out plan will still push through but if it doesn’t, the US would still be ground zero and the impact on us would be on trade, especially if their economy slips into recession,” Espenilla said.

There were fears of thinning credit in the local market but Espenilla said this should be no worry since the country had over $36 billion in reserves and the balance of payments had a rolling surplus of over $2 billion. “A $2-billion surplus is nothing to sneeze at,” he said.

Espenilla said there is an added comfort level from remittances, a renewable source of inflows that were expected to grow by only 10 percent but have actually been growing by 18 percent.

“We’re facing challenging times but we are not necessarily in a bad shape,” Espenilla said. “Even if the bailout plan doesn’t work—which I still think it will—we’ll have to rely on our own resilience.”

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RP lagging behind neighbors in attracting foreign retirees

Wednesday, October 1, 2008 | MANILA, PHILIPPINES

[ BusinessWorld Online ]


MORE FOREIGNERS have chosen to retire in the Philippines this year, government data show, but experts say there is much to be done for the country to truly become a retirement haven.

The number of foreigners granted special resident retiree visas grew 20% to 960 in the first eight months of 2008 versus roughly 800 in the same period last year, Reynaldo D.L. Lingat, general manager of the Philippine Retirement Authority (PRA) said in a phone interview late last week.

More than a third of the retirees are Chinese (36%), while a similar number are Korean (33%). Americans and Japanese comprise 16% and 5% of the number, respectively. The rest are from Australia, India and Germany, Mr. Lingat said.

"[But] the Philippines is not among the top 20 preferred retirement destinations in the world," he added, noting that neighboring Thailand and Malaysia figured more prominently. The PRA still needs to attract 640 foreign enrollees to hit its yearend target.

The Philippines’ laggard performance is due to the lack of a long-stay tourist program and limitations to land tenure for foreigners, International Chambers of Commerce Retirement & Healthcare Coalition, Inc. chairman Henry J. Schumacher said in a phone interview late last week.

Although visas are granted to qualified retirees, there is a need to first grant tourist visas that cover longer periods, he said.

"In order to get new people to accept the Philippines as a retirement haven, we have to invite tourists to [first] stay here for three to four months to understand how the country ticks," Mr. Schumacher said.

"The Bureau of Immigration has been very restrictive [compared with their counterparts in] Thailand and Malaysia," he added.

Mr. Schumacher also recommended that since foreigners are restricted from owning land in the Philippines, a compromise would be to apply the Condominium Act — which allows foreigners to own 40% of a unit — horizontally to include retirement villages and town houses.

Subic, Clark, Metro Manila, Tagaytay, Dumaguete and Cebu can be marketed as retirement hubs as medical services, living accommodations and recreation facilities are available there, he added.

"Quite a number of Japanese and Korean investors [are building such facilities in the Philippines]," Mr. Schumacher said.

For his part, Mr. Lingat said the PRA is working on integrating agencies to improve the provision of health care to foreign retirees. PRA, he added, has put in place a tracking system to monitor bottlenecks in retirement visa applications.

Mr. Schumacher said, however, that the PRA should not focus on registration efforts.

"The PRA view is very short-term...[It] is income-oriented," he said, referring to the agency’s collection of up to $50,000 in deposit from retirees and a monthly pension of $800. "I prefer it to be a service organization." — Jessica Anne D. Hermosa

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Subic Golf Course fast-tracked

Vol. XXII, No. 48 [ BusinessWorld Online ]
Wednesday, October 1, 2008 | MANILA, PHILIPPINES

SUBIC BAY FREEPORT — Korean-Filipino company Hanafil Golf and Tour, Inc. wants to fast-track the redevelopment of the former Subic Bay Golf and Country Club with its committed investment of $48 million.

Hanafil President and Chief Executive Officer Benjamin John Defensor said the ongoing development of the Subic golf course would not be affected by congressional criticisms in the contract award.

"We will continue to redevelop Subic Golf until we have satisfied our contract with the Subic Bay Metropolitan Authority (SBMA)," he said.

Hanafil has started building a new nursery that will replace the greens and fairways of the present golf course to support the expansion of additional holes.

"Currently, we have been getting positive feedback from the SBMA and members of Subic Golf," Mr. Defensor said. The company is now building a new restaurant for members and guests. The company has also committed to protect the forests surrounding the golf course.

SBMA Administrator Armand Arreza said the award of the development contract to Hanafil was aboveboard.

"Our agreement with Hanafil assures the government a P14-million income annually, compared with the P3.6-million promised by the former operator," he said. The P14-million rental will be paid on top of a 5% revenue sharing scheme, as well as a $48-million development commitment, he pointed out.

Mr. Arreza said the SBMA had awarded the lease and development contract to Hanafil over seven other bidders because the firm had offered terms that are most advantageous to the government.

Northern Samar Rep. Emil Ong has alleged the contract with Hanafil was "disadvantageous to the government." "All these underwent the legal process," Mr. Arreza said. — Reynaldo Garcia

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