Philippines cuts housing target due to slow private financing
THE GOVERNMENT has cut its housing target to 4 million from 6 million units until 2028 due to slow private financing, Philippine President Ferdinand R. Marcos, Jr. said in a Facebook post on Tuesday night after a meeting with housing officials.
“To ensure that the Pambansang Pabahay para sa Pilipino Housing (4PH) program is successful and sustainable, I have directed the concerned agencies to adjust housing targets based on need and demand until 2028,” he said.
Meanwhile, the state would issue funding guarantees for the mass housing program, the Department of Human Settlements and Urban Development said on Wednesday, citing slow private funding.
The sovereign guarantee would cover the P1.65-trillion funding needed to build 1.2 million housing units in the pipeline under the state program, Human Settlements Secretary Jose “Jerry” Rizalino L. Acuzar told a news briefing.
“We had been using private money, but the funding was so slow,” he said in Filipino.
The agency has cut its 6-million target through 2028 due to construction issues and delayed loans.
“I’m optimistic that this guarantee will make a difference in finally addressing homelessness in our country,” Mr. Acuzar said.
The Human Settlements department has 53 projects under the mass housing program.
It said its target of 1.2 million housing units yearly would only be met by 2028 through the guarantee, which may be increased to P4 trillion if the agency manages to build 3.2 million housing units in four years.
In a statement, the presidential palace said that through the sovereign guarantee, government financial institutions (GFI) could extend developmental loans to the National Housing Authority (NHA) and Social Housing Finance Corp.
The loan evaluation process could be fast-tracked, he added.
The Home Development Mutual Fund or Pag-IBIG Fund would take care of beneficiaries’ housing loans.
“Pag-IBIG shall then release the loan proceeds directly to the GFIs that granted the developmental loans,” it said. “Upon payment to the GFIs, the loan obligation is fulfilled, and the guarantee is extinguished,” it said.
The cancelation rate for socialized housing loans is 9.11%, the palace said, citing Pag-IBIG data.
But rising property values could outpace holding costs, “such that Pag-IBIG still stands to gain upon resale of the property.”
Mr. Acuzar said the President has approved the sovereign guarantee in principle, but the target amount is yet to be decided.
The Human Settlements department would propose the amount to President Ferdinand R. Marcos, Jr. and his economic team would evaluate the recommendation.
Mr. Acuzar said the government guarantee would be less costly for the state since it would eliminate the cost of doing business with contractors.
He said his agency is set to turn over 12,000 housing units this year. — KATA