Monday, October 20, 2008 [ manilatimes.net ]
STATE-RUN Home Guarantee Corp. (HGC) is asking the national government for fresh equity infusions for the next two years for the company’s expansion.
Gonzalo Bongolan, HGC president, said the state-owned firm needs P2.2 billion in capital for next year and another P1 billion for the following year, adding these are just portions of the company’s P50 billion authorized capitalization.
Bongolan said the government has so far shelled out P11 billion for HGC since its charter was revised in March 2000.
“We hope to receive at least P1 billion a year for our operation and general purposes,” he told reporters.
With the new capital infusion, Bongolan said HGC can expand its guarantee and refinancing capacities.
“If we’ll get these infusions, we’ll be less dependent on borrowings,” he added.
HGC is mandated to guarantee the payment of any and all forms of mortgages, assist private developers to undertake socialized housing projects, promote homebuilding and landownership, pursue the development and sustainability of a secondary mortgage market for housing and promote housing by the aided self-help method.
Bongolan earlier said HGC would raise P5 billion through the sale of 10-year debt papers to domestic lenders between April and June next year, adding the firm expects the bond issuance will generate strong demand as in previous offerings.
He said the new bond issue is not meant to finance the maturing obligations of the company, citing its IOUs would mature by 2013 at the earliest.
The said bond float would have to secure the green light from the Department of Finance and the Bangko Sentral ng Pilipinas.
To date, HGC’s outstanding debt stood at P20 billion.
Last year, the company granted P64 billion in guarantees to government financial institutions as well as private banks that provided housing loans to their clients. In 2006, the amount of guarantees stood at P63 billion.
Bongolan said HGC clients who failed to pay interest or principal when due dropped 0.06 percent to P42 million of the total P70 billion in receivables last year.
“From 1996 to 2000, our average default was 11 percent, and the 0.06 percent last year is very manageable,” he said.
Last year, HGC sold P1.1 billion in assets including houses that the company had repossessed, the official said.
He said insurance premiums from banks grew 10.7 percent to P414 million last year from P374 million in 2006.
The firm is eyeing P700 million in revenues this year.-- Chino S. Leyco
