HOUSING GAINS IN 2011

Strategic reform in functions and policies

Policy reform and functional integration among shelter agencies, good governance and a stronger government and private partnership, and program preference towards the poor and vulnerable marked the housing sector accomplishments in 2011.

Still, issues and problems need to be addressed. These include keeping up with the demand for affordable, decent housing and basic services for the urban poor, with the resulting estimated 3.6 million housing units still needed nationwide. At the same time, the updating of policies continued in order to adapt to current developments in the environment, and firming up and enhancement of relationships with housing stakeholders such as non-government organizations, formal lending companies, and private developers.

As Chairman of the Housing and Urban Development Coordinating Council, Vice President Jejomar C. Binay led the key shelter agencies in finding solutions to the sector’s issues, and to zero in on the production of decent and affordable housing in sustainable communities.

In line with President Benigno Aquino III’S call to correct the inefficiencies of government systems, give preferential attention to the needs of the underprivileged, and align the programs, projects, and activities of all government departments and agencies, the Vice President focused on: • Transparent, accountable, and participatory governance; • Poverty reduction and empowerment of the poor and vulnerable; • Rapid, inclusive, and sustained economic growth; and • Protection of the integrity of the environment and promotion of climate change adaptation and mitigation.

REFORMS FOR GOOD GOVERNANCE AND TRANSPARENCY

The Vice President has always maintained that dishonesty hampers the success of good programs. Thus, his first directive was to ensure that good governance and transparency are reflected in the transactions and dealings of the shelter agencies with their clients. Under his guidance, all the shelter agencies adopted institutional reforms to eliminate opportunities for graft and corruption, and improve delivery of services.

In addition to the intensive campaign for transparency and good governance, the Vice President directed all housing corporations to strictly abide by and enforce the Code of Good Corporate Governance to ensure that the performance of the agencies and the remuneration and allowances of personnel are properly audited. To this end, the shelter agencies assigned Compliance Officers and Board Committees to ascertain that all Board decisions are followed promptly and efficiently. This has resulted in the revitalized role of the Board of Directors in auditing agency performance and the remuneration and allowances of personnel. Risk analysis and extensive review of expenditure and revenue patterns were also conducted, resulting to clearer targets and priorities.

I. Simplified Rules of Procedure and Fast-tracked Resolution of Cases

The Housing and Land Use Regulatory Board (HLURB) revised its Rules of Procedure and eliminated the tedious process for resolving conflict/cases filed before the agency. The Board stripped a layer of review by deleting the Motion for Reconsideration from the Decision/resolution/order of the Board. The revised rules resulted in a simplified process and shortened the period for finality of judgment from 30 days to 15 days.

The Board also aimed for a zero backlog of appealed cases. As of date, 549 of the 617 cases have already been resolved and the remaining 68 cases have draft resolutions ready for deliberation.

II. Developed New Guidelines for Transparency

HLURB revised the Implementing Rules and Regulations (IRR) governing Section 18 of RA 7279, or the Urban Development and Housing Act (UDHA) of 1992, effectively expanding the coverage and accelerating the production of socialized housing. The aim was to faithfully comply with the provisions of the law; property developers are required to dedicate at least 20 percent of a total subdivision area or at least 20% of the total project cost for socialized housing.

Under the area compliance, developers are no longer limited to construct their socialized housing project within the same city or municipality as the main subdivision project. The developers are now allowed to build it anywhere in the Philippines, pending approval by HLURB.

The previous practice of availing of the units of participation of Five Thousand Pesos (P5,000.00) per housing unit of the NHA (that was prevalently used to circumvent the requirements of the law) was also eliminated from the menu of options.

On the other hand, the Home Guaranty Corporation (HGC) developed financial standards and rating system for real estate developers that will be used to gauge their performance and guide HGC in deciding whether or not to provide guaranty. These include credit worthiness, risk profile, mortgages, and housing receivables. The rating system will also be used as basis for pricing the guaranty.

New policies and guidelines in guaranty operations were also instituted to reduce guaranty calls and accumulation of acquired assets.

III. Pursued Cases Against Corrupt Practices

One of the first issues that the Vice President immediately addressed as HUDCC Chairman was the Globe Asiatique scandal that involved “loan takeouts” worth P6 billion. After a careful and thorough inter-agency investigation, the loan takeouts turned out to be disadvantageous to the interest of PAG-IBIG Fund and its members. The Globe Asiatique case was deemed a test case of the Vice President’s resolve to instill good governance and transparency among the workforce of the shelter agencies.

Because of the Vice President’s persistence and the overwhelming evidence gathered during the investigation, the Globe Asiatique owner and his cohorts were charged with 27 counts of syndicated estafa before the Department of Justice (DOJ). PAG-IBIG Fund also charged some of its officials involved in the scandal with administrative cases.

KEY PARTNERSHIPS FOR SUSTAINABLE URBAN DEVELOPMENT

To facilitate a speedy resolution in addressing the housing problems, the Vice President formed strong and cohesive partnerships among the HUDCC and the key shelter agencies, the Local Government Units (LGUS), Non-government Organizations (NGOS), and the private sector. He also made sure that each housing program achieves the goal of sustainable communities and urban development.

I. Formulation of Strong and Effective Partnerships to Achieve the Housing Sector’s Goals

One of the first actions of the Vice President was to facilitate a shelter-wide strategic planning with the agency heads and technical planning people. This was done to formulate the policy and program thrusts and priorities of the housing sector.

A. Convening the HUDCC

In order to encourage the active participation of housing stakeholders, HUDCC was convened again, and now holds regular quarterly meetings. This move enhanced coordination with all housing stakeholders, particularly the Congress and the private sector, and resulted in an efficient discussion of strategies and a unified position on housing policies and directions for the next six years.

The HUDCC also agreed to push for the creation of the Department of Housing and Urban Development (DHUD). This venture gained the support of President Benigno Aquino III and the leadership of Congress. As a department, the DHUD is expected to rationalize and promote efficient coordination and integration of housing and urban development plans, programs, and projects.

B. Enhancing Partnerships with LGUS through the Pabahay Caravan Program

A former local executive himself, Binay believes that the LGUS are in the best position to determine the immediate needs of their constituents, even in housing. He trusts that housing production would be accelerated if the LGUS are placed at the forefront of the housing projects. This strategy would also reduce costs and make houses more affordable.

With this in mind, he launched the Pabahay Caravan to enhance partnership with the LGUS in the delivery of housing services and to reduce the 3.6 million housing need. The two-day caravan in each region was designed to raise awareness on the programs and services of the housing agencies, help the LGUS perform their functions as defined under Republic Act 7279, and increase the production base for housing.

Among the programs and services of the shelter agencies for local governments are as follows: • Resettlement Program for LGUS (NHA) • Localized Community Mortgage Program (Social Housing Finance Corporation) • Group Housing Program (PAG-IBIG Fund) • Housing Regulation and Land Use Planning (HLURB) • Local Shelter Planning (HUDCC) As a follow-up activity, the HUDCC spearheaded the creation of the Central Inter-agency Coordinating Team (CIACT) and Pabahay Regional Inter-agency Composite Team (PRIACT) composed of technical personnel of HUDCC and the attached KSAS. The CIACT and the PRIACT will assist the LGUS in the implementation of housing programs in their respective localities and build on the gains of the Pabahay Caravan.

C. Partnerships that Generated Alternative Funds for Housing Production

One of the successful partnerships that the Vice President made in 2011 is the credit facility agreement between PAG-IBIG Fund and the Government Service Insurance System (GSIS). This agreement allows the PAG-IBIG to administer GSIS funds for housing. The Fund will put up a special lane for GSIS members and pensioners to facilitate the processing of their housing loans. GSIS has already released an initial P5 billion to finance the housing loans of its members and pensioners through the PAG-IBIG.

On the other hand, the HGC intensified efforts to promote their guaranty program to encourage private banks and financing institutions into home lending. New guaranty enrollments for the year amounted to P38 billion translating to 25,006 housing units.

Meanwhile, the National Home Mortgage Finance Corporation’s (NHMFC) pursued its Housing Loan Receivables Purchase Program (HLRPP) in line with its mandate to develop and provide for a secondary market for home mortgages granted by public and/ or private home financing institutions. The purchase of mortgages and housing loan receivables assures originating institutions of the immediate recovery of their liquidity as NHMFC consequently assumes the long-term risk of home lending and other modes of home financing. Being thus relieved of risk and assured of liquidity, originating institutions are enabled to lend to more home borrowers.

D. Secure Tenure through Various Housing Programs and Projects of Key Partners

From July 2010 when the Vice President assumed chairmanship of HUDCC up to December 2011, the housing sector was able to provide security of tenure to nearly 160,000 households, 63 percent or about 100,850 of which went to housing for the poor and the low-income. The consolidated housing production of the shelter agencies has resulted to the generation of job opportunities to 1.2 million urban and rural workers. Of this accomplishment, almost 109,000 were delivered in 2011.

In 2011, the SHFC, through its Community Mortgage Program, delivered housing assistance to about 16,000 beneficiary-families valued at almost P1 billion. This is, by far, the highest performance of the program and is more than double the 7,109 accomplishment in 2010. The SHFC has adopted the strategy of expanding partnership with the LGUS by engaging them to implement Localized CMP projects. More specifically, it has targeted 70 percent of its portfolio for cities outside the National Capital Region (NCR), with priority to highly urbanized cities, cities with high population growth rates, and the metro cities.

The PAG-IBIG Fund extended P31.5 billion for the construction or acquisition of nearly 46,300 housing units by HDMF members who availed the Fund’s end-user financing program. Additional 9,335 units have been approved with a value of P6.7 billion and are pending take-out.

Since July 2010, PAG-IBIG provided a total of P54.81 billion to fund 80,715 housing units for its members. The NHA provided security of tenure to more than 45,600 families in 2011, bringing the total families served since July 2010 to about 60,300, most of whom belong to the bottom 30 percent of the income population. The various housing programs of NHA were valued at more than P7 billion.

E. Collaboration with the private sector and NGOS

To create an investment-friendly environment in the housing industry, the HUDCC supported the continued inclusion of mass housing in the Investment Priorities Plan. Real estate associations were also encouraged to liquefy their housing loan receivables through the NHMFC Housing Loan Receivables Purchase Program. Furthermore, private developers are now engaged in policy and decision-making processes through their representation in the HUDCC Council.

The collaboration of private developer and real estate groups with HUDCC resulted in the increase by the Bureau of Internal Revenue of the ceiling of house and lot acquisitions exempted from the value added tax from P2.5 million to P3.19 million. With the increase in the cap, we expect to generate more housing acquisitions as houses would be made more affordable without the payment of the VAT.

Consistent with DBM National Budget Memorandum No. 109 (which advocates partnership with NGOS in the preparation of budget proposals for 2012), the housing agencies that deal with informal settlers, such as the NHA and SHFC, included the basic sectors in the 2012 budget preparation.

The HLURB promulgated the IRR for RA 9904, or the Magna Carta for Homeowners and Homeowners’ Association. The IRR specifically defines the rights and powers of the association and the duties and responsibilities of its officers. These newly implemented rules would benefit housing unit owners as they expanded the definition and concept of the homeowner.

Because of their proven track record in building affordable housing and better communities, non-government organizations such as the Gawad Kalinga (GK) and the Habitat for Humanity (HFH) were engaged in building socialized housing projects, especially for families affected by calamities. Having been elected as a member of the Board of Directors of the SHFC, the HFH was involved in policy making for informal settler families.

The HLURB recognized the contribution of NGOS in housing production by including the construction of socialized housing projects by accredited NGOS as a mode of compliance for balanced housing requirement, and by exempting them from the requirements of License to Sell.

II. Decent and Affordable Housing in Sustainable Communities

For the informal settler families living in “danger zones” or those living near estuaries and waterways, under bridges, by the rivers, on stilts over the bay, and are under immediate danger of being swept away or drowning during heavy rainfall, President Benigno Aquino III released an initial P10 billion allocation for a housing program. This shall include in-city housing, such as medium-rise buildings, and off-city relocation. The five-year target is to provide housing in safer communities to about 105,000 ISFS in danger areas in Metro Manila.

Until recently, urban development has not been given any consideration in redeveloping congested cities and designing new communities. There is also a need for climate change-resistant housing and sustainable communities as effects of climate change have caused widespread devastation of lives and properties in the country.

With these challenges in mind, the Vice President led the initiative in creating sustainable communities and promoting urban development nationwide through a progressive and comprehensive resettlement and urban upgrading strategy as well as programs that provide for sustainability.

A. Formulation of a National Slum Upgrading Strategy (NSUS) towards a Comprehensive Shelter Plan for Informal Settler Families

To guide the national government and local government units in the preparation and implementation of effective policies and programs on slum upgrading, the HUDCC has forged partnership with the Cities Alliance on 10 May 2011. The Cities Alliance, an organization which promotes a global partnership for urban poverty reduction and the promotion of the role of cities in sustainable development, approved the proposal of HUDCC to develop a National Slum Upgrading Strategy (NSUS) for the Philippines.

The NSUS will finance a number of preparatory activities leading to the development and adoption of the slum upgrading strategy. The components of the strategy include: • A workshop to take stock of current initiatives in slum upgrading in local and international settings; • An inventory and assessment of policies, programs, processes and institutions undertaken by the government, NGOS and the private sector on slum upgrading in the Philippines; • An inventory and assessment of slum issues; • Development of the strategy that will be subjected to stakeholder consultations; and • The development of a communications scheme to promote and support the adoption of the strategy.

The NSUS shall be complemented by a comprehensive review of the resettlement policies and the preparation of a comprehensive shelter plan for informal settler families in Metro Manila. This shelter plan will ensure the provision of basic social services (e.g., schools, public markets, health care centers) and livelihood opportunities at the resettlement sites.

The HUDCC aims to adopt an enhanced Resettlement Policy Framework that identifies common procedures and guidelines among all infrastructure agencies, the housing agencies, the local government units (LGU), and other government agencies. The framework will include an exit mechanism or strategy by the NHA from performing pre- and post-resettlement activities. The agency will then turn over obligations, particularly in estate management and community development, to LGUS and NGOS engaged in advocacy work and helping the urban poor.

This shall be translated into a sustainable government resettlement program that will address the housing problem of families residing in danger areas and areas affected by government infrastructure projects.

B. Inclusion of Climate Change Adaptation and Disaster Risk Reduction Measures in Housing and Urban Development Plans and Programs

Through the HLURB, local governments are assisted in the integration of climate change mitigation and adaptation actions, as well as disaster risk management measures in their development planning.

To maximize efforts and reach more LGUS, HLURB is now implementing the Cluster Approach to comprehensive land use planning (CLUP). As a result, it has exceeded its 2011 annual target in providing assistance to the LGUS in CLUP preparation by 76 percent (195/111) as of December 2011. The agency’s accomplishment in the number of assisted LGUS, whose CLUPS are ready for approval, has also exceeded targets by 188 percent (360/125) covering the same period.

Sorsogon City serves as the pilot area for climate-proofing CLUPS and Local Shelter Plans. Disaster risk reduction and climate change adaptation were mainstreamed in its local development planning and decision making processes. The LGU took on the challenge to design, build, and showcase a climate change-resilient human settlement in a coastal city. This initiative involved the localization of the housing policies and guidelines on site planning and house construction with specific attention to local climate change scenarios, urban development and housing trends, and the poor’s capacity to cope with disasters and extreme events. The demo project was conducted with UN Habitat under the Millennium Development Goal- F 1656 Joint Programme.

C Promotion of Green Technology

The Vice President sees the imminent need to integrate, develop, and promote indigenous and green building technology in construction. This is being done through the accreditation of indigenous technologies for housing (AITECH). The plan on prototype projects to showcase to LGUS and private partners on the use of green technology and its affordability is already underway.

Likewise, among the HUDCC’S initiatives is the promotion and use of green technology that incorporates climate risk reduction into the policies of the LGUS, and encourages families to participate in efforts to create climate-resilient cities and protect the environment. Throughout this process, the LGU must engage the poor in defining risks and appropriate actions while taking into account the special needs of women, children, and the elderly who are the most affected during calamities and emergencies.