Real estate developers seek inclusion of mass housing in IPP

MANILA, Philippines - The country’s largest group of real estate developers and builders has called on the Department of Finance (DOF) to reconsider its proposal of removing mass housing from the latest Investment Priorities Plan (IPP).

“We are calling on the DOF to reconsider its position of having mass housing removed from the list of investment priorities as this goes against the provisions of the Omnibus Investment Code of 1987 and the national housing program,” Charlie A. V. Gorayeb, national president of the Chamber of Real Estate and Builders Association Inc. (CREBA) said in an interview.

In a paper submitted to the Department of Trade and Industry (DTI), the DOF said it is pushing for the removal of mass housing and other investment sectors such as shipbuilding, iron, steel, and motor vehicle manufacturing from the 2013 IPP saying their continued inclusion on the list poses an “administrative nightmare” to the tax bureau.

Inclusion in the IPP qualifies an investor for tax incentives, tax holidays, tax credits and other non-fiscal incentives.

“The tax perks and incentives provided by the IPP, allows developers to keep the prices of our mass housing projects within the reach of the average Filipino,” Gorayeb said. “If mass housing is removed from the 2013 IPP – that would be the nightmare. This is a threat to national growth and development and it will deny millions of Filipinos of their dreams of owning a home.”

Gorayeb said mass housing projects have been listed every year in the IPP for over a decade now for the purpose of bridging the housing gap and provide affordable homes for Filipinos.

“Delisting will also have a negative effect on the 75 or so peripheral industries involved in the mass housing industry, like steel and cement manufacturers and other local suppliers,” Gorayeb said.

The CREBA executive added that if the DOF intends to generate more tax revenues it should propose measures to run after bigtime smuggling syndicates where billions in government revenues are lost instead of removing tax incentives given to the mass housing sector.

In a letter sent to the BOI on April 27, CREBA also aired its opposition to the DOF paper stressing that mass housing projects also generate thousands of jobs which contribute to the local economies and reduce the problem of unemployment.

“The DOF must take these factors into serious consideration,” Gorayeb stressed.

Mass housing is included in the 1987 Omnibus Investment Code as a priority investment sector. In 2007, the Board of Investment (BoI) expanded its coverage to include vertical housing or condominium projects.

In February, the BOI called a public hearing for the drafting of the 2013 IPP guidelines and said it will retain mass housing in its list of priority sectors. The board said it will submit the draft IPP for President Aquino’s approval by month’s end after consulting with representatives of the various investment sectors.