Citing ‘racket' claims, senator urges COA to check funds Lao spent as housing exec

Citing âracket' claims, senator urges COA to check funds Lao spent as housing exec
Former Budget Usec. Lloyd Christopher Lao fields questions from Sen. Risa Hontiveros at a Senate hearing on September 30, 2021.
Screen grab / Senate of the Philippines YouTube page

MANILA, Philippines —  Sen. Risa Hontiveros on Monday urged the Commission on Audit to scrutinize P1.8 billion in funds reportedly spent by Lloyd Christopher Lao from 2018 to 2019 when he was head of the now-defunct Housing and Land Use Regulatory Board. 

Hontiveros said these funds were sourced from the P5 billion collected from the private housing developers in compliance with the Urban Development and Housing Act which she also urged COA to track.

Some of the developers have accused Lao of running an extortion racket, filing a case against him with the President Anti-Corruption Commission, according to a report from Rappler. PACC then endorsed the complaint to the housing department but its chief, Eduardo del Rosario, said at a Palace briefing last month that Lao had already left the HLURB by then. 

After his stint at the housing department, Lao in 2020 moved on to the Department of Budget and Management where he headed the procurement service. 

When the pandemic broke out later that year, he awarded large contracts to Pharmally Pharmaceutical Corp. that are now the subject of legislative inquiries as well as a special audit by COA.  

"A staggering P5 [billion] has been collected from private housing developers since Usec Lao joined HLURB, which is a burden to many small developers. It is impossible to explain and find where large chunks of it were spent during the Lao era," Hontiveros said in Filipino. 

"There is no paper trail. The money should have gone to the construction of affordable housing for minimum wage earners, as well as those who want to leave informal settlements," she added. "I urge COA to look into this matter and immediately, and I urge DHSUD to cooperate without hesitation." 

At a Senate Blue Ribbon Committee hearing held on August 27, Lao said he was "not aware" of the complaint filed against him by the developers. This was later contested by Hontiveros who said she had information that Del Rosario required Lao to reply to the complaint. 

P20-B socialized housing funds potentially lost 

According to Hontiveros, when Lao was heading the HLURB, the was an alleged scheme where private developers were made to pay a certain "fee" that would serve as an alternative to their compliance with the requirements of the Balanced Housing Development Program law.

The law requires developers to allot a portion of their projects to socialized housing.

“How did Lao spend P1.8 [billion] without the knowledge of HLURB (which is now part of the Department of Housing)? He alone and not the HLURB decides which areas and which contractors will be favored by this amount."

“Did the money become a pork barrel? We don’t know if housing was built," she further said, adding that DHUSD has long been unable to provide details sought by her office on the matter. 

"One after the other, Lao has been embroiled in [controversy involving] not change but billions. This should not be allowed to pass anymore."

The alleged scheme may have also been illegal, Hontiveros said, because the cash generated and deposited in escrow accounts with banks is barely a fourth of the amount mandated by law. 

If the law were enforced, she added, the private sector could have created up to P20 billion in socialized housing units, a significant increase above the minuscule budget provided by DBM to housing agencies. 

"People have the right to know where the money they have worked so hard to earn goes," the senator said. "I am confident that COA will perform their mandate especially with the unexplained expenditures of government agencies. — Bella Perez-Rubio 

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