VP disputes ‘boom’s over’

Wednesday, 22 October 2008 18:58

VICE President and Housing and Urban Development Coordinating Council Chairman Noli “Kabayan” de Castro, reacting to the “boom’s over” prognosis for the Philippine property sector, said Tuesday the housing sector will be able to weather the global financial storm arising from the subprime problem in the United States. De Castro made the rebuttal after the European Chamber of Commerce of the Philippines noted that the “boom’s over” for the real-estate industry in the Philippines, as indicated by the entry of speculation into the local property sector. The Vice President explained that the growth of the real-property sector in the Philippines is fueled by the favorable policy environment in the housing sector and the Filipinos’ desire to own a home. Among the policy factors in favor of the real-estate industry are the substantial allocation of P30 billion by Pag-IBIG in addition to the funds that are available through private banks, the improvements in the regulatory environment as a result of the collaboration between the government and private developer groups, and the guarantee provided by the government to housing loans through the Home Guaranty Corp. At the same time, the Vice President observed that the sustained inflow of remittances from overseas Filipino workers and the continued growth in business-process outsourcing will help sustain a healthy demand for housing. According to him, “The problems in the United States came about because of excessive leveraging on primary mortgages, which worked as long as real-estate prices were going up. We do not have that in the Philippines. Our housing finance sector is anchored on strong fundamentals. The upside potential of the real-estate industry is still there, because this is a long-term trend that goes beyond the present crisis of confidence in the global financial markets.”