Developers rally behind bill on affordable housing to all

MANILA, Philippines - The country’s largest organization of key real estate industry players is urging the passage of a bill that will make all income-earning Filipinos entitled to low-interest housing loans, even if they are not members of the Social Security System (SSS), Government Service Insurance System (GSIS) or the Pag-lBIG Fund.

National chairman Charlie Gorayeb of the Chamber of Real Estate and Builders’ Associations Inc. (CREBA) said the resulting surge in the number of housing beneficiaries would be covered by an initial P220-billion fund sourced from the SSS, GSIS, Pag-IBIG Fund and the banking system’s unused lending portfolios for agriculture-agrarian purposes, all placed under a Centralized Home Financing Program (CHFP).

“The initial P220 billion for the CREBA-proposed CHFP will come from yearly bond issuances by the SSS and GSIS at P25 billion each, a minimum of P70 billion up to a maximum of 70 percent of the Pag-IBIG Fund’s total investible funds that must be invested in housing pursuant to its Charter, whichever is higher, and P100 billion from the unused or residual agri-agra funds of banks,” Gorayeb explained.

This bill proposed by CREBA thus amends Section 11 of the Comprehensive and Integrated Shelter Finance Act (Republic Act 7835) of 1994.

The fund sources, according to CREBA national president Noel Toti M. Carino, have already been identified by law, including the respective charters of the concerned government-owned and controlled corporations, and need only to be integrated under the CHFP for effective administration to housing beneficiaries.

As proposed by CREBA, the CHFP shall be designed exclusively for financing assistance to borrowers for home loans, especially for socialized and low-cost housing, with no component for property development purposes, thus ensuring the use of the funds strictly for shelter acquisition by the homeless.

Payable in 25 or more years, the loans for residential units in subdivisions or midrise condominium buildings shall be P1.25 million and below at 4.5 percent fixed interest rate for socialized housing, and over P1.25 million up to P3.1992 million at 6.5 percent for economic housing.

All income-earning citizens who qualify as beneficiaries under the Urban Development Housing Act and who have not acquired housing assistance from any government institution shall be eligible for home loans through the CHFP.

The operation of the CHFP shall be sustained from the funds pooled from mortgages, receivables and other securitized assets that the SSS, GSIS, Pag-IBIG Fund and the banking system shall continue to invest in with the mandatory guaranty cover from the government’s Home Guaranty Corp. as to the principal and the three-percent interest for all the issues.

“Thus, a secondary mortgage institution shall be organized by the government to lead in this housing capital development effort, which will set in motion the country’s securitization, capital and secondary market operations program for housing,” Gorayeb said.

“The CHFP shall have two components -- the Loans Program and the Securitization Program -- to be administered by Pag-IBIG Fund and the National Home Mortgage Finance Corporation (NHMFC), respectively,” Gorayeb added.