80,908 informal settlers aided by housing sector in 2013

By OVP Media
January 18, 2014

MANILA – The government housing sector reported that in 2013, the drive to provide housing to informal settler families (ISFs), which is one of its priority projects, has helped a total of 80,908 beneficiaries across the country with a total funding amounting to P26.985 billion.

“In 2012, the number of beneficiaries assisted by the National Housing Authority through its various programs was 56,221 families, so there is a 44% increase,” Vice President and Housing and Urban Development Coordinating Council head Jejomar C. Binay said.

The programs were aimed towards the resettlement of informal settler families (ISFs) living along danger areas in Metro Manila; those affected by infrastructure projects in Metro Manila and those living in danger areas in adjacent provinces; regional resettlement for local government units and indigenous peoples (IPs); and through the Community Mortgage Program (CMP) of the Social Housing Finance Corporation (SHFC).

Under the In-city housing program, 12 Low-Rise Building (LRBs) projects are under various stages of construction on NHA and LGU-owned properties which are expected to benefit some 6,560 families. So far, 876 units in Smokey Mountain, Manila and Disiplina Village, Valenzuela City have been completed and are ready for occupancy, while the construction of the rest of the units is ongoing and are expected to be completed by the middle of 2014.

Off-city housing also continued to be provided, particularly for families interested to have their own house and lot packages. 18,564 units were generated at NHA housing sites/settlements for the benefit of these ISFs for 2013.

The SHFC meanwhile implemented the High Density Housing (HDH) Program which provides funding for land acquisition, site development and housing construction proposals initiated by the affected families and communities themselves. The program was designed to complement the NHA’s program for ISFs in danger areas in Metro Manila. For 2013, the SHFC Board has approved five (5) projects to benefit 2,786 ISFs with funding of more than P290 million.

8,008 units were generated in NHA resettlement sites for families affected by government projects such as the R-10 and C-5 Northern Link road projects, various infrastructure projects in Quezon City, Philippine Ports Authority and NAIA Expressway projects, and for families in danger areas in Bulacan, Pampanga, Laguna and Rizal.

The regional resettlement projects benefited from higher budget allocation and greater participation of LGUs with the implementation of 124 projects aimed at addressing resettlement requirements of LGUs outside Metro Manila.

As a result, the year 2013 yielded a total of 11,709 units for regional resettlement projects in Northern and Central Luzon, Southern Luzon, Bicol, Visayas, and Mindanao.

IP groups also benefited, with 25 projects implemented in 2013. To date, 37 projects to benefit 3,117 IPs are being implemented in various parts of the country.

The housing sector also reported that as of November 2013, 153 project applications to fund land acquisition have been approved under the CMP which amount to about P980.6 million and benefit 16,015 ISFs with tenure security on the land they occupy. This represents 79% of SHFC’s target of 14,900 families for the full year and is 26% higher than last year’s accomplishment of 9,287. Of this number, actual take-out for the year amounted to almost P714 million, benefiting some 11,800 ISFs.

Of the 153 projects approved for CMP funding, 12 are Localized Community Mortgage Program (LCMP) projects that would provide secure tenure to 1,124 ISFs. The LCMP is a derivative of the CMP where partner LGUs may apply for financing to accommodate their priority social housing projects.

A total of 2,889 ISFs were meanwhile awarded their individual titles from January to November 2013. These families have attained their goal of becoming homeowners after having fully paid their loans. The individual titles released this year exceeded SHFC’s target of 2,000 titles by 44%.

Housing loan programs catering to employees from the national and local government as well as the private sector were also introduced in 2013. Pag-IBIG Fund widened the range of its borrowers, enabling more Pag-IBIG members to be homeowners by amending the guidelines of an existing housing program and creating a new housing program. NHA also continued its housing program for policemen and soldiers, which was started in 2011 under Administrative Order No. 19 issued by President Benigno Aquino.

According to the annualized January to November 2013 report, Pag-IBIG Fund’s accomplishment in housing loan availment for 2013 is expected to reach 100% and 120% of its target in terms of loan value and number of units, respectively. About P44.7 billion worth of housing loans are projected to be granted by the Fund to finance purchases and construction of 60,983 housing units for its member-borrowers. Of these, 26% or 15,789 units valued at P12.5 billion are pending for take-out and are currently awaiting compliance with the Notice of Approval conditions such as payment of necessary taxes at the Bureau of Internal Revenue, transfer and/or annotation of mortgages at the Registry of Deeds, and securing the new Tax Declaration at the local government units for purposes involving purchase.

Pag-IBIG also created the Business Development Sector (BDS) which maintains and strengthens the Fund’s dealings with developers and employers. The BDS seeks out developers that have not previously used the Fund’s financing for their buyers and encourages them to partner with Pag-IBIG. It also offers the country’s top employers with Employer Accreditation for housing loan processing, providing employers with faster access to Pag-IBIG’s housing services such as housing loan prequalification, home or housing needs matching, and faster housing loan processing time. To date, Pag-IBIG Fund has accredited 25 employers, which include 15 private employers, six (6) national government agencies, and four (4) state universities/colleges.

The Fund also introduced a special lane in several branches for loans amounting to P1 million and above to facilitate faster processing.

The following are the programs offered for employees for 2013:

1. Affordable Housing Program. This program offers subsidized rates for the first ten (10) years for members with gross monthly income not higher than P17,500. Loans up to P400,000 have an interest rate of 4.5%, translating to a monthly amortization of P2,026.74, while loans up to P750,000 have a 6.5% interest rate and a monthly amortization of P4,740.51. At the end of the 10-year period of subsidized rates, the borrower will pick the re-pricing period of his/her choice.

2. Group Housing Loan Program. Housing for LGUs, employers, employee associations, and cooperatives is fast-tracked through this program, wherein project proponents are given access to a maximum loanable amount of P20 million for horizontal development and P40 million for vertical development. As of October 31, 2013, a total of 1,184 out of 1,715 LGUs (69%) have been briefed on the salient features of the program. Of these, 195 LGUs are negotiating with Pag-IBIG which could generate up to about 13,000 housing units.

The Bistekville project of the LGU of Quezon City, which is an undertaking among the LGU, the private land owner and the developer, demonstrates public and private partnership at work. Bistekville 2 will generate 894 housing units, each costing P400,000, with the project beneficiaries availing themselves of the End-User Program to finance their housing units.

3. Housing Needs Matching Program. In order to reduce the cost of owning a home, Pag-IBIG adopted the strategy of matching its members’ housing need with available inventory of developers.

The first “Needs Matching” project in North Luzon, Hanjin Village, is a socialized housing project for shipyard workers of Hanjin Heavy Industries and Construction Company Limited or HHIC-Phil. The project will allow the employee-beneficiaries to pay for the land, land development, and house construction at significantly lower costs (an average of 65% of market value).

The project, consisting of 288,147 square meters of land in Castillejos, Zambales, is expected to generate 2,780 housing loan accounts with a total portfolio of P1.27 billion for the next three years. Another project in Mindanao is in partnership with the provincial government of Sarangani. Capitol Residences has 180 total saleable units, with each unit costing P400,000 to P500,000.

Housing units are packaged as 1-bedroom or 2-bedroom duplexes or 3-bedroom single attached units with a land area of 55 or 65 square meters per unit. Package price ranges from P399,000 to P599,000.

4. AFP/PNP Housing Program. NHA responded to the needs of the government employees particularly the military and police personnel by providing them decent and affordable housing. For the year 2013, NHA continued to implement Phase II of the AFP/PNP Housing Project though the development of 30 projects across the country which generated 20,680 units. To date, 29,810 units are under various stages of completion for Phase II of the project.

5. Other Services Resulting in Increased Resources. Pag-IBIG Fund implemented various measures which generated more members and increased collections in members’ savings. Average growth rate from 2011 to 2013 is about 9%, or an increase from P21.9 billion to P26 billion. The huge increase in members’ savings is attributed to the rising number of members who voluntarily upgrade their monthly savings. Although mandatory membership savings have not been increased since 1986, Pag-IBIG has been encouraging members to voluntarily increase their monthly savings so they can gain more benefits like higher loan entitlement and higher dividend amounts at the end of each year.

In line with Republic Act 10361 which instituted policies for the protection and welfare of domestic workers, Pag-IBIG Fund, together with SSS and PhilHealth implemented the Kasambahay Unified Registration System, which contributed to the increase in members’ savings. The system enables a kasambahay or his/her employer to register only once with any of the three (3) agencies. Pag-IBIG also undertook pro-active efforts to register kasambahays and their employers using Pag-IBIG’s own registration system for employers.

The housing sector also enhanced its partnership with various sectors to generate additional resources for housing, especially for the poor, and encourage the private sector to participate in housing projects.

In January 2013, the Revised IRR to govern Section 18 of Republic Act 7279, entitled the Urban Development and Housing Act, took effect. The Revised IRR provides for the different modes by which private developers can comply with the provision that at least 20% of total area or total project cost of subdivision projects should be allocated for socialized housing. The new guidelines allow compliance with the law through development of new socialized settlements, slum upgrading, joint venture with LGUs or other housing agencies and participation in the Community Mortgage Program.

In 2013, commercial banks and other financial institutions started rebalancing their loan portfolios to lessen their exposure to real estate as encouraged by the Bangko Sentral ng Pilipinas to maintain equilibrium between housing need and home construction. While this measure negatively impacts guaranty enrollments of the Home Guaranty Corporation (HGC), the agency promoted countryside home-lending through rural banks and microfinance institutions. Guaranty line applications from nine (9) rural banks were received, four (4) of which were already given guaranty lines. With HGC guaranty, their home-lending activities are expected to increase homeownership in their respective regions.

The HGC held a ceremony in September entitled “Mobilizing Funds for Countryside Housing Development” promoting this initiative. The ceremony highlighted the partnership between HGC and 17 member-banks of the Rural Bankers Association of the Philippines (RBAP) and one microfinance institution (MFI) to boost housing developments in the countryside.

In response to Vice President Binay’s directive, the HGC also started coordinating with partner banks to encourage them to lend more for home construction and repairs in calamity areas, particularly those in Yolanda-affected areas.

Meanwhile, in order to strengthen public-private partnership towards the development of a sustainable housing finance system in the country and to be more competitive in the market, The National Home Mortgage Finance Corporation (NHMFC) also amended the guidelines of the Housing Loans Receivables Purchase Program (HLRPP). Under this program, NHMFC purchases seasoned housing loan receivables from originating institutions which will be turned into an asset pool for eventual issuance of securities or bonds for sale in the capital market.

The revised guidelines reduced the interest rates and the seasoning period of the amortizing borrowers prior to the sale or assignment to NHMFC, to encourage more originators developers to sell their loan receivables to NHMFC.

Through the conduct of road shows in the various regions, NHMFC was able to purchase 3,676 housing units worth P906.412 million from January to November 2013 representing 113.30% of its target. These housing accounts underwent the due diligence process to ensure the purchase of seasoned/quality mortgages.

The purchased receivables shall be used to back up the securities that NHMFC is expected to issue in 2014. This would be the third residential mortgage backed securities (RBMS) in the Philippines by a government agency, following Bahay Bonds 1 (BB1) in 2009 and BB2 in 2012. Bahay Bonds 2 was awarded the most “Innovative Listed Corporate Bond Issue of the Year” given by Philippine Dealing System Holdings Corporation & Subsidiaries (PDS Group) on 28 February 2013.

In line with the thrust of improving transparency and increasing stakeholder participation in government programs and projects, the SHFC signed once again a budget partnership agreement with the Partnership of Philippine Support Service Agencies, Inc. (PHILSSA) and the National Network of CMP Originators and Social Development Organizations for Low-Income Housing (CMP Congress) as Civil Society partners for the execution of its annual budget preparation. This agreement is in compliance with National Budget Circular No. 536 issued by the Department of Budget and Management on 31 January 2012 for Government Corporations to engage with Civil Society Organizations (CSOs) in budget preparation.

The SHFC also conducted nationwide Budget Consultation Workshops with CMP-Mobilizers (CMP-Ms) and other stakeholders to determine national funding support for CMP projects in 2014.

For the new year 2014, the shelter agencies vowed to intensify the implementation of its priority programs, which include the provision of permanent housing units for calamity victims, particularly those living in areas affected by typhoons Pablo and Yolanda declared as No-build Zones, as well as the continued resettlement of ISFs living in danger areas in Metro Manila.

Also included among the priority projects of the housing sector are the increase in the number of beneficiaries given security of tenure through the Community Mortgage Program, as well as the improvement of existing CMP areas through loans for site or home development.

The following are also marked as priority projects:

• Improve collection efficiency. For the CMP, the target collection efficiency rate for 2014 is 82%, compared to the existing 80% target;

• Develop the capacity of 250 Community Associations as well as Implementation Partners under the CMP and HDH programs;

• Implement organizational reforms, such as the establishment of SHFC regional hubs and pave the way for a decentralized operation;

• Push for legislative measures that would strengthen the housing sector such as the proposed Social Housing Finance and Development Corporation Charter;

• Undertake measures to increase funding to support the housing sector’s programs such as NHMFC’s secondary mortgage operations;

• Improve services and provide more benefits to Pag-IBIG members through the following programs and projects:

a. Privilege Card Benefits,

b. Full launch of Pag-IBIG HELPs,

c. Pag-IBIG-led Housing Projects.

• Diversify Asset Portfolio/Fund Generation Program and ensure higher Return On Equity;

• Intensify partnership with rural banks especially in calamity areas to encourage them to lend more for construction and repair of housing units of calamity victims;

• Intensify assistance to LGUs to fast-track the preparation/updating and approval of CLUPs.