Chamber of Real Estate & Builders' Associations, Inc.

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Largest housing industry group identifies priority issues

The Chamber of Real Estate & Builders’ Associations (CREBA) has identified inadequate homebuyer financing, lack of land, weak incentives for socialized housing and bureaucratic red tape as major issues that need to be immediately addressed.

“With all these issues, our homebuilding rate is just 300,000 units per year, compared to a housing backlog of 6.8 million units and growing”, Cariño told news reporters during CREBA’s membership meeting last Thursday.

Home buyer financing

Cariño said that currently, the only sources of homebuyer financing are the banks and Pag-IBIG.

Banks’ lending rates are unaffordable by the lower income sectors. On the other hand, while Pag-IBIG rates are affordable, it finances only some 38 percent of all home loans in the Philippines.

According to former Bangko Sentral Deputy Governor Diwa Guinigundo, “it would take around six years for Pag-Ibig Fund alone to deliver one million homes.

Thus, Cariño said, one of CREBA’s main priorities has always been to push for a legislated homebuyer financing program utilizing investible funds of government financial institutions under the secondary capital market system.

However, Cariño stressed, such a program would have to include strict implementing parameters and safeguards to avoid the fiasco of the defunct Unified Home Lending Program (UHLP) of the Housing and Urban Development Coordinating Council (HUDCC).

Access to land

Cariño said that land use conversion rules continue to be unreasonably restrictive and biased against non-agricultural development.

Coupled with unsystematic or unscientific land reclassification and assessment processes, this results in serious dysfunctions in the land markets, continually spiraling land prices and scarcity of land for housing development.

Developers can come up with vertical housing that utilizes the smallest land acreage possible, even if this would entail higher building costs, and therefore result in higher prices of the housing units.

Still, Cariño stressed, land conversion restrictions are a major obstacle, that is why CREBA is intensifying its efforts to have the National Land Use Act (NLUA) is currently pending in Congress revised.

Cariño also said that the plight of informal settlers in urban centers should be addressed not by relocating them to areas far from their places of work, or simply by “sites and services” activities that do not eliminate urban blight, but by coming up with innovative land acquisition schemes integrated with vertical onsite in-city housing development programs.

Weak incentives for socialized housing

Developers are required to allocate 20 percent of their development to socialized housing, Cariño said, but the effectiveness of this punitive measure remains to be seen, considering that despite its imposition some 31 years ago, the housing backlog has continued to worsen.

Cariño reported that CREBA has already submitted to Congress its recommendations to improve the proposed amendments to the alternative modes of compliance to this requirement.

In addition, there is need to liberalize the restrictive conditions for availment of the tax and fiscal incentives accorded to mass housing projects under the BOI’s Strategic Investment Priority Plan (SIPP), in order to encourage – rather than discourage – more socialized housing projects.


Sixteen years since the ARTA Law was passed, corruption and unreasonable delays in the issuance of various permits, clearances and licenses required prior to project development remain unresolved, Cariño said.

From the project conceptualization stage up to the issuance of a License to Sell, there is a long list of government offices with which a housing developer has to contend.

Cariño stressed that the DHSUD and the ARTA need to work together in re-engineering the systems, processes and procedures – as required by that law – in the regulation of housing and real estate activities, so that the housing industry and the homebuyers can enjoy the benefits envisioned.


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