In a recent forum with SHDA developers, PDB president, Ma. Flordelis Aguenza said that the bank is making available to SHDA developers its contract-to-sell (CTS) purchase facility; trust services for the creation of asset pool trusts; and the issuance of asset-backed securities to provide developers much-needed liquidity support for their housing project.
Aguenza noted that the breakdown in homebuyers financing system, attributed to the adverse ramifications of the 1997 financial crisis, had disrupted the cash generation cycle of many property developers depriving them of essential cash needed to reinvest and continue development activities, or at least service their project obligations.
She also hailed SHDA’s efforts to sustain activities in the housing construction sector, despite these times of "extreme economic uncertainties."
"It not only reflects SHDA’s unrelenting commitment to fulfill a noble social need, but also your strong faith and confidence in the medium-term economic prospects of the country," the PDB president said.
PDB’s CTS purchase facility, similar to the mortgage take-out facility of government home financing institutions, effectively liquefies developers by converting their installment receivables from home-buyers, to cash.
"This enables developers to fund subsequent subdivision development, as well as increase the inventory of housing units, which again can be sold to generate additional funds," Aguenza pointed out.
Under its trust services, PDB’s trust department acts as trustee for various developers’ real estate and financial assets, which are in turn liquefield through the issuance and sale of participation certificates or other forms of asset-backed securities to private investors of funds, to sustain project development requirements, she added.