Gov’t banks commit to support intensified mass housing program

MANILA — The Department of Human Settlements and Urban Development (DHSUD) revealed that major government financial institutions, including the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), have committed to support the new administration’s intensified mass housing program.

According to the DHSUD, the LBP, DBP and various private banks have already expressed their support to the government’s mass housing program during their recent respective meetings with Human Settlements Secretary Jose Rizalino Acuzar.

Earlier, the DHSUD had revealed its plan to establish one million housing units per year until 2028 to address the country’s housing backlog of 6.5 million.

Both public and private financial institutions, Acuzar said, will play a crucial role in addressing the two main challenges in the housing sector –affordability and access to funds.

“Government financial institutions, even private banks, are clearly pillars in the financial structure we have prepared to address the housing needs of the Filipinos in a sustainable way,” Acuzar said.

LBP president and chief executive officer Cecilia Borromeo said during his recent meeting with Acuzar that the LBP is set to participate in the government’s various housing projects through a “new financial scheme that will ensure gains for beneficiaries, local government units and financial institutions.”

“We would be very happy to work with DHSUD for this program. We just need more details on how we can formally participate,” Borromeo said.

The DHSUD, meanwhile, stated that DBP expressed particular interest in offering development loans as initial provision for projects to be constructed by the developers or local government units (LGUs).

“The crafted financial structure will ensure a closed-loop movement of cash and funds in the money market. This will include development loans and tax subsidies or housing interest support to attract more players,” Acuzar said.

He underlined the DHSUD’s planned financial scheme’s goal of “mobilizing more private partners, such as developers, banks, and other financial institutions to invest in housing production.”

During the House committee on appropriations’ deliberation on the DHSUD’s P4.049-billion proposed budget for 2023 last week, Acuzar noted that the agency is ready to build one million housing units per year until 2028.

According to Acuzar, the intensified mass housing production is in accordance with President Marcos’ goal of having zero informal settler families by the end of his term.

He revealed that the DHSUD first requested a P95.9-billion budget for next year, but the Department of Budget and Management only approved P4.049 billion, which was 48 percent lower than its 2022 budget of P7.6 billion.

Nevertheless, Acuzar assured the lawmakers that the agency’s lower budget for next year would not affect the planned construction of the initial one million housing units, as this will be financed through capital from banks and other government financial institutions.

He stated that LGUs will also be asked to help in the implementation of the housing projects, particularly in terms of determining the beneficiaries and the most efficient contractors and developers.

Meanwhile, Acuzar saw the hearing as an opportunity to ask the legislators for a separate P36 billion to fund the interest subsidy for the first one million housing units to be constructed next year.

With the P36 billion interest subsidy, he said, housing recipients will only be required to pay the principal and 1% of the interest, while the government will cover the remaining interest.

During the same budget hearing, DHSUD Assistant Secretary for Support Services Avelino Tolentino stated that there is a need to expand housing construction as the backlog is expected to grow from 6.5 million by the end of 2022 to 10.9 million by the end of 2028.