Our four-part series will be capped with another important housing-related bill that remains pending in the 16th Congress.
In a recent Congressional hearing, the Housing and Urban Development Coordinating Council (HUDCC) reported that the current housing backlog stands at about 5.5 million units. Former NEDA chief Cielito F. Habito, however, has observed that Philippine government spending for housing has been no more than 1 percent of its total budget making it amongst the lowest in Asia (ADB, 2009).
Although CREBA estimates that this figure may even be understated, it foresees that 500,000 units a year must be built within the next 20 years if we are to dramatically address, if not totally wipe out, the huge housing problem.
The success, however, of any government housing program depends on a well-planned and holistic consideration of all factors that should come into play in ensuring effective and sustained program implementation. This is why CREBA actively supports the passage of an omnibus bill creating a Department of Housing and Urban Development (DHUD) which has been pending in the legislative mill for the past 2 decades.
The DHUD must be so created as the highest national policy-making body empowered to address housing in its totality by encompassing 4 major aspects: housing finance, production, regulation and administration.
Three important funding mechanisms, solely devoted to housing production and finance and not to be used for operations, must be put in place to ensure optimum housing delivery.
First, the DHUD bill must establish a Centralized Homebuyer Financing Program (CHFP) that will administer and unify all home lending operations composed of 100 Billion Pesos from the unused portion of the Agri-Agra funds of banks as mandated by R.A. 7835 or CISFA; 20 Billion Pesos each from SSS and GSIS; and 70 Billion Pesos from PAG-IBIG Fund.
Second, the Philippines must start to operate a long-term Securitization Program to further augment the CHFP Fund with the National Home Mortgage Finance Corporation (NHMFC) as lead agency.
Third, the amounts set aside for housing by various existing laws must be finally integrated and put them under a Housing and Urban Development Fund.
No new funding is necessary to make this a reality. The existing appropriation for HUDCC, including personnel and assets, is transferred to the Department. A simply structured, lean and mean Department would be more appropriate.
What is of utmost importance is to cloth the Department with powers sufficient to ensure (1) that the KSA’s, LGU’s and the private sector operate in a concerted and holistic fashion where the Secretary possesses adequate administrative and supervisory powers over the KSA’s and their governing boards; (2) that the housing and urban development effort is accorded the priority it deserves at the highest levels of government; and (3) that the funding support allocated to housing by virtue of various existing laws are allotted and used judiciously to address the needs of the greater majority of society.
The proposed Act will provide a tremendous boost to the economy if enacted and implemented fully and decisively due to the enormous economic pump-priming impact of housing activity in terms of providing employment and income opportunities for millions, catalysing business activity for at least 75 other industries, attracting investments and building new economic centers, and generating billions in government revenues from taxes.
We also hope that our honorable lawmakers can finally steer the passage of the DHUD bill. Otherwise, this vital and urgent piece of legislation will become no more than a noble concept on paper. Let us not let it die yet again.
Published in the Manila Bulletin June 2014
