Sunday, July 11, 2010

Wiping out RP's housing backlog


By Mary Ann Ll. Reyes (The Philippine Star) Updated July 09, 2010 12:00 AM
Photo is  loading...
Serrano

MANILA, Philippines - Emphasizing the need to create a Department of Housing, the founder and chairman emeritus of one of the country’s most influential trade organizations has also urged whoever will be named government housing czar to work closely with the private sector and to have a firm resolve to address the country’s burgeoning housing problem.

In an interview with The STAR, lawyer Manuel Serrano of the Chamber of Real Estate and Builders Associations (CREBA) emphasized that the mistake of all previous administrations is that there has been no firm decision to really address the housing dilemma. “And this is the reason why government does not have the funds to solve the housing backlog, especially mass housing,” he said.

Serrano, who is also the founder and chairman of Business Against Graft and Corruption (BAGCOR) and the Subdivision Owners Association of the Philippines (now Social Housing Developers Association or SHDA), said the country currently has a housing shortage of about seven million units.

“There should be around 500,000 units being built every year but what is actually being built is just 30,000 per year. If we consider that the number of households is increasing by about 250,000 to 280,000 families each year, not only are we not addressing the annual requirement, we are also not solving the backlog which is growing and growing,” he pointed out.

Widely acknowledged as the real estate guru given his 48 years experience in all aspects of real estate (starting with his first project in 1962 – Better Living Subdivision in Parañaque), Serrano noted that government may not realize it but the real estate sector is the major economic pump-primer and could take the country out of the economic rut it is currently immersed in.

He explained that for every P1 investment in the real estate sector, the multiplier effect is 17 times in terms of other investments. “The housing industry is interrelated to 60 other industries. And that is why in case of any economic aberration, governments trigger housing first. The Philippines has not exploited the multiplier of the housing sector. It is the most labor and capital intensive industry,” he said.

Serrano stressed that the creation of a Department of Housing would give the sector the much-needed importance and focus that it deserves. At present, there is the Housing and Urban Development Coordinating Council (HUDCC) which oversees five agencies, namely Pag-IBIG, the Home Guarantee Corp, the National Home Mortgage Finance Corp., the National Housing Authority, and the Housing and Land Use Regulatory Board.

He said that almost every year, there is a housing bill being proposed and passed at the House of Representatives, but blocked in the Senate.

Serrano said the HUDCC should be elevated to a Department of Housing to ensure a speedier and more effective resolution of homelessness and squatting.

About three years ago, CREBA suggested the creation of an OFW Mutual Fund to finance the construction of mass housing.

A study conducted by the Asian Development Bank (ADB) then showed that while around $17 billion is being remitted annually, the same amount is retained by these OFWs.

The fund gives these OFWs a mechanism whereby they can invest these money, by way of savings and investment bonds. The interest income is immediately given to the investors while the principal will be utilized by government for mass housing. Unfortunately, the HUDCC did not agree to the suggestion.

The CREBA-OFW Mutual Fund, he said, will encourage the inflow of excess OFW foreign exchange earnings into the country and channel the same for housing, infrastructure development, debt-servicing, and other vital projects, which may eventually put an end to foreign borrowing.

In 2008, HUDCC said the proposal for the issuance of Retail Treasury Bonds for OFWs and the establishment of a housing-oriented mutual fund for OFWs, while laudable, may compete and not complement the existing programs of the key shelter agencies.

But Bangko Sentral ng Pilipinas (BSP) deputy governor Diwa Guinigundo said CREBA’s proposal deserves support especially since it is aligned with the BSP’s advocacy program to promote savings and investments for OFWs and their households. “It is through investment vehicles like this that we can encourage the flow of remittances into productive endeavors such as infrastructure and housing,” he said.

Guinigundo, in a letter to HUDCC secretary general Lucille Ortile, said he does not believe that the proposal to establish a housing mutual funds dedicated to the needs of OFWs would compete with government’s efforts to provide public housing.

“Instead, the synergy between the efforts of the public and private sectors to address the large backlog in low and medium-cost housing would have significant positive economic and social ramifications that would support broad-based and more robust economic growth and development. We believe that it is actually an opportune time for overseas Filipinos to direct their savings to meaningful endeavors. These gives them the opportunity to optimize the returns on their investments of their hard-earned savings,” he added.

Serrano also suggested the restoration of the Unified Home Lending Program, which pools the housing programs of the various government financial institutions into one fund. “The program had its flaws and it was not properly implemented. But we gave government the solution to the problem, by adopting the contract to sell throughout the contract term instead of the mortgage origination approach,” he said.

He pointed out that funding should be there, not for the developers, but for the buyers.

Serrano meanwhile pushed for an enhanced securitization program under a Centralized Homebuyer Financing Program, designed to ensure the sustainability of the National Shelter Program by permanently linking the primary and secondary capital markets for housing in a continuing process of fund generation, home lending, and fund recycling.

Another suggestion raised by the CREBA founder is to give the HLURB expanded powers. “Ejectment and questions involving right of way and easements should be under the HLURB and not the regular courts,” he explained.

During the interview, Serrano likewise proposed that the conversion powers of the Department of Agrarian Reform (DAR) be limited to awarded lands. “Right now, under the CARP law, there is the presumption that all lands are agricultural lands and therefore, before any land can be converted to non-agricultural uses, it has to be approved by DAR. Local government units should be given the power to decide the best use for non-agricultural lands. Food security and housing are equally important and should be balanced,” he said.

This jurisdictional issue, he stressed, impedes housing and other non-agricultural development activities and causes the unabated spiral of land prices and development costs.

CREBA is pursuing the promulgation of an executive order or enactment of a law that will place beyond DAR’s authority all lands zoned by LGUs for non-agricultural uses pursuant to RA 7160, all urban lands as defined in RA 7279, and all private “striplands” along national and provincial roads set aside for human settlement under PD 399.

Also pending before the Supreme Court are cases he filed on behalf of the CREBA and the industry, including those calling for the annulment of the creditable withholding tax for every sale of real property, the repeal of the two percent minimum corporate income tax to spare firms that incur losses, and the annulment of the Energy Regulatory Board requirement for developers to advance the cost of installing lines by the Manila Electric Co. (Meralco).

No comments:


OTHER LINKS