Moro Leaders Laud Obama’s Speech

COTABATO, Philippines – US President Barack Hussein Obama has called for “a new beginning” in the relationship between America and the Muslim World.

“I have come here to seek a new beginning between the United States and Muslims around the world,” Obama said in a speech that delivered in the Cairo University in Cairo, Egypt last Thursday.

Obama acknowledged the contributions of the Muslims to human civilization.

He said: “As a student of history, I also know civilization's debt to Islam. It was Islam – at places like Al-Azhar University – that carried the light of learning through so many centuries, paving the way for Europe's Renaissance and Enlightenment.”

“It was innovation in Muslim communities that developed the order of algebra; our magnetic compass and tools of navigation; our mastery of pens and printing; our understanding of how disease spreads and how it can be healed. Islamic culture has given us majestic arches and soaring spires; timeless poetry and cherished music; elegant calligraphy and places of peaceful contemplation. And throughout history, Islam has demonstrated through words and deeds the possibilities of religious tolerance and racial equality,” Obama continued.

The US President also acknowledged how colonialism “denied rights and opportunities to many Muslims,” in the speech described by Mohagher Iqbal as “perfectly made.”

Iqbal, himself an author of many books, is the chair of the Peace Panel of the Moro Islamic Liberation Front (MILF) in its peace negotiations with the Government of the Republic of the Philippines (GRP).

“What is still lacking is action. That will come later, hope soon,” Iqbal said.

Professor Moner Bajunaid, the executive director of the Mindanao Integrated Development (MIND) Center, Inc., a nongovernmental organization (NGO) in Cotabato City lauded Obama’s speech as “well written.”

“It spells out his vision of peace in the Middle East and the world. It is well balanced, something for all parties. It is full of Quranic verses. At times the speech sounds like a lecture but somehow he balances it by pointing out Islam’s heritage to civilization,” Bajunaid further said.

On his part, Rahib Kudto, the national president of the United Youth for Peace and Development, Inc. (UNYPAD), another NGO that is based in Cotabato City, said:

“President Barack Obama is the only non-Muslim President I have known that has expressively recognized Islam as a source of knowledge and peace. He is a man of hope and unity.”

“Good but let’s see action,” was the brief reply of Jun Mantawil, the chair of the secretariat of the MILF Peace Panel, when he was asked about his comment on the speech of Obama.

Guinandang Bansilan, a retired government employee, in Kabacan town in North Cotabato, remarked: “That is the best speech (of a US president) so far. It urges the unity of the entire world."

Meanwhile, Professor Abhoud Syed Lingga, the executive director of the Institute of Bangsamoro Studies (IBS), in a statement he issued June 5, described Obama’s speech as “a landmark as far as relations between the Muslim world and the United States is concerned” and that “if followed by concrete actions it will certainly change the landscape of the relationship in the future.”

“Although short of specifics but the speech was the boldest, balanced and frank statement coming from a president of the United States.

“His acknowledgment of the Muslim’s contributions to human civilization and in building the American nation, as well as the suffering of Muslims under colonialism, is a good starter for fruitful dialogue between the U.S. and the Muslim world,” Lingga explained.

Lingga appreciated Obama’s “candidness in discussing the major sources of tension and what he intends to do in addressing them.”

“Specifically,” Lingga said, “what interest me are his proposals on engaging the Muslims through education, science and technology and economic development. These programs will not only benefit Muslims in Muslim-majority countries but also Muslim minorities like the Bangsamoro people.”

“The concept of creating ‘a new corps of business volunteers to partner with counterparts in Muslim-majority countries’ is indeed interesting because it juxtaposes with the idea that I always hold that development of Muslim communities in the Bangsamoro homeland has to be driven by Bangsamoro entrepreneurship to be sustainable, not by programs of government and aid agencies,” further noted Lingga.

Lingga, however, clarified that Obama’s reference to “America and Islam” can be “confusing” since “the two are not the same.”

He stressed that “while America is a nation, Islam is a religion, a way of life. Defining the similarities and differences would have been clear if the term ‘Muslim world’ is used to refer to the collectivity of Muslim nation-states and the Muslim minorities.”

“Although he made the commitment that as president of the United States he will fight against negative stereotypes of Islam wherever they appear but no mention as to what he will do to change the perception of around 46 percent of the respondents of the latest survey in the United States who held unfavorable view of Muslim countries,” Lingga concluded.

Catrina Malingawa, vice chair of the United Youth of the Philippines, Inc. (UNYPHIL-Women), in its Davao Oriental provincial chapter, appreciated Obama’s emphasis on respecting Muslims’ culture especially “on wearing hijab for Muslim women.”

“Islam,” according to Obama, “is part of America.”

“The Holy Koran tells us: ‘O mankind! We have created you male and a female; and we have made you into nations and tribes so that you may know one another.’

“The Talmud tells us: ‘The whole of the Torah is for the purpose of promoting peace.’

“The Holy Bible tells us: ‘Blessed are the peacemakers, for they shall be called sons of God.’

“The people of the world can live together in peace. We know that is God's vision. Now that must be our work here on Earth,” thus, Obama concluded his speech. (Taher G. Solaiman. The author is the President of the Cotabato Center for Peace and Development Initiatives, Inc. in Carmen, Cotabato province in Mindanao.)

Urban Poor Group Hits Arroyo on Housing Mega-Sale

DAVAO CITY, Philippines (Mindanao Examiner / Nov. 14, 2008) - The militant Kalipunan ng Damayang Mahihirap (KADAMAY) condemned the Arroyo government for allowing the onerous mega-sale of P14-billion worth of some 53,000 low cost housing units nationwide to the private Balikatan Housing Finance, Inc.

”The sale smacks of capitalist greed at the expense of thousands of urban poor professionals and other low-income earners who will be displaced and evicted once rash foreclosure proceeding shall have been started,” it said in a statement.

It accused Balikatan of colluding with agencies of the Arroyo bureaucracy and victimizing thousands of urban poor homeowners who are mostly lowly government and private employees and who receive meager wages.

It said urban poor occupants of low-cost housing units shall be forced to pay 25% of the total cost of outstanding loan or the full amount of their arrearages within three months, a condition that even US banks and other corporations now reeling from the impact of the global financial crisis could not even accomplish. Worse, outstanding loans of homeowners shall be eventually reappraised to as much as 300% of the original loan amount.

”It is ironic how imperialist nations led by US are fast to bail-out banks by dishing out billions of dollars of taxpayers' money, in contrast to how private financing corporations like Balikatan enjoy dictating the lives of urban poor homeowners by forcing them to agree to the onerous conditions of the new loan terms.”

”KADAMAY joins the Davao City Federations of Homeowners' Association (DCFHA) in its struggle for decent and affordable housing adding that it can only be won through collective action and militancy,” it said.

Subdivisions in Davao City , which had units transferred to the ownership of Balikatan Housing Financial Incorporated, are situated in San Lorenzo Village, El Rio, Rosalina, Kadayawan and Country Homes.

The Balikatan is a special purpose company jointly owned by the NHMFC (49% share) and the Deutsche Bank Global Opportunities (51%). Asian Development Bank lent P1.6 billion to set up Balikatan. BHFI engaged Bahay Financial Services (BFS), an asset management and loan company, to implement its mortgage servicing activities.

The Philippine Information Agency (PIA) earlier reported that Davao City councilor and majority floor leader, Danilo Dayanghirang, was seeking President Arroyo's intervention in the questioned deal between NHMFC and BHFI.

Dayanghirang is also one of the original founders of the newly revived DCFHA. He said the homeowners are all willing to pay.

The PIA reported homeowners in Davao City continue to complain of being threatened with foreclosures and badgered by so-called account specialists of BHFI to settle their accounts in full or pay a down payment of 25% and the remaining balance at P20,000 to P50,000 a month to settle the accounts. Gerrard Anthony Paez, BHFI corporate communications officer, also wrote the PIA and provided the following response.

The NHMFC has replied to the charges raised by Dayanghirang before the Office of the Deputy Ombudsman for Mindanao concerning the transfer of highly-delinquent loans from NHMFC to BHFI.

NHMFC's position points to the transaction as being beneficial to the members of the Social Security System (SSS) and the Home Development Mutual Fund (Pag-Ibig).

This echoes the result of the public hearing conducted last June by the House of Representatives Committee on Housing and Urban Development on House Resolution No. 604, entitled: Resolution Directing The Committee On Housing And Urban Development Of the House Of Representatives To Conduct An Inquiry, In Aid Of Legislation, Into The Foreclosure Of Low-Cost Housing Units That Are Now Owned By Balikatan Finance, Inc., sponsored by House Speaker Prospero Nograles.

During the hearing, Florentino Espana of Pag-Ibig manifested support for the Balikatan transaction, citing the P498 million payment received by Pag-Ibig from NHMFC following the sale of the highly-delinquent portfolio that resulted in the creation of 1,700 new homes, with a net multiplier effect estimated at P3.7 billion to the economy.

The payment by NHMFC of its obligations afforded Pag-Ibig the opportunity to pursue and continue their loan origination and housing programs. On the matter of foreclosure, he cited that enough time and opportunity had been given the Balikatan borrowers to settle their loan obligations over the years. While Pag-Ibig recognizes the borrowers' concerns, it also has to think of keeping its provident fund intact for its more than seven million members who are the direct beneficiaries of the fund.

SSS similarly declared support for the Balikatan sale and transaction. Luz Generoso recognized that the sale transaction enabled NHMFC to pay its outstanding obligation to SSS, and acknowledged the effectiveness of BFS' asset management and loan servicing processes that ensured SSS' continued receipt of the proceeds of the loan resolutions.

Responding to the allegations of Councilor Dayanghirang, NHMFC pointed out that through the Unified Home Lending Program (UHLP) in the 80s, NHMFC used the funds of the SSS, Pag-Ibig, and the Government Service Insurance (GSIS), to finance the housing loans of their members through accredited financial institutions and subdivision developers nationwide.

The borrowers of the UHLP therefore were members of the formal sector and had capacity to pay. The UHLP was not deemed to address the needs of subsidized or socialized housing borrowers. Other agencies were instead tasked to address this sector.

Unfortunately, NHMFC encountered great difficulties due to uncollected loans and low repayment rates. NHMFC began to accumulate a huge portfolio of non-performing loans.
Accordingly, NHMFC engaged an independent financial advisor to conduct a due diligence review on some 195,040 mortgage loans of the UHLP Portfolio, estimate the value of the portfolio, and propose a restructuring and disposition strategy for the portfolio.

Eventually, the UHLP portfolio was classified into three categories: low delinquency loans, moderate delinquency loans, and high delinquency loans.

High delinquency loans referred to loan and mortgage accounts with little or no collection at all since takeout by the buyers. The borrowers had very high arrears and had experienced proportionately high penalty billings.

These loans produced less than 8% of the total collections of the UHLP portfolio and less than 5% of the cash flow of the UHLP portfolio, but required significant collection resources and expenses on the part of the NHMFC. Each one had been arrears for more than four years; in fact most were delinquent for 10 to 15 years.

The outstanding obligations of these accounts were at almost 400% of the original principal and in all these accounts, less than 20% of the original principal had been repaid. Moreover, 30% of the high-delinquency loans had made no payment since takeout. That meant that more than 15,000 of these borrowers had lived in the property for almost twenty years without paying a single monthly amortization.

Following the advice of its financial advisor, NHMFC awarded some 52,000 highly delinquent loans to the highest bidder in the first-ever open-competitive bidding for mortgage loans in the Philippines, won by DB Global Opportunities Fund (not Deutsche Bank as previously reported).
The NHMFC and DBGO then entered into a joint-venture arrangement, known as Balikatan Housing Finance, Inc., where the highly-delinquent accounts were transferred.

The assignment went through the necessary legal processes and complied with the all requisites involved. It was done through a public bidding, conducted by a Bid and Awards committee composed of representatives from the DOF, HUDCC, COA, and NHMFC.

The public bidding was held only after the disposition of the NPLs was approved by the boards of directors of NHMFC, SSS, and HDMF, and by the NEDA Executive Committee.
The Department of Justice, the Office of the Government Corporate Counsel, and the Office of the President likewise approved the transaction.

The government strategy of selling its non-performing loans to the private sector was a landmark transaction that was hailed by the Department of Finance as the "model NPL resolution transaction" for distressed assets.

The sale was also cited by the Asian Development Bank as "a highly visible, precedent-setting transaction (that) will send a clear signal to the global community that the Philippine Government is committed to resolving its and the Philippine financial sector's nonperforming loan problem in general, and to restructuring its housing finance sector in particular."
More than just sending a message however, the government reaped the benefits of this pioneering transaction.

As a result of the public bidding, the Philippine Government received, as purchase price, P5.12 billion, which met the floor price fixed by NHMFC, SSS, HDMF, and DOF. In addition, consistent with the approval obtained from the Office of the President of the Philippines, NHMFC retained a 49% equity interest in Balikatan after transferring the highly-delinquent loans to it.
Thus, NHMFC was assured of an equitable share of future collections as a stockholder of Balikatan, and it realized as well savings and other cost benefits from the transaction.

All these means that the SSS and Pag-Ibig will continue to reap the benefits of Balikatan's collection efforts from highly-delinquent borrowers who have refused to pay NHMFC after having enjoyed, and continuing to enjoy, properties purchased under the UHLP as far back as 15 years ago. As pointed out by Pag-Ibig, this will help keep the provident fund intact and protect its more than 7 million members.