Subdivision and Housing Developers Association, Inc.

THE PHILIPPINE HOUSING SITUATION

THE PHILIPPINE THE PHILIPPINE HOUSING SITUATIONHOUSING SITUATION

OUTLINE OF PRESENTATIONOUTLINE OF PRESENTATION

A. ORGANIZATIONAL SET-UP OF HOUSING SECTOR

B. CURRENT SITUATION/INDUSTRY ASSESSMENT

C. PHILIPPINE HOUSING POLICIES

D. PROSPECTS AND RECOMMENDATIONS

ORGANIZATIONAL SET-UP OF THE HOUSING SECTORORGANIZATIONAL SET-UP OF THE HOUSING SECTOR

(Executive Order No. 90, Series of 1986)

The Housing and Urban Development Coordinating Council (HUDCC) was created by virtue of Executive Order No. 90 as amended by EO No. 20 issued on 28 May 2001. It serves as the highest policy making and coordinating body on housing and urban development. It is also tasked to provide overall administrative supervision to the following key housing agencies:

(Executive Order No. 90, Series of 1986)

NATIONAL HOME MORTGAGE FINANCE CORPORATION –major government home mortgage institution mandated to develop the secondary mortgage market

HOME GUARANTY CORPORATION – provides guarantee, loan insurance and other incentives to assist private developers to undertake low and middle income mass housing production and encourage institutional funds and commercial lenders to finance such housing development

NATIONAL HOUSING AUTHORITY- the sole government agency engaged in direct shelter production. The NHA focuses its efforts in providing housing assistance to the lowest 30% or urban income earners

HOME DEVELOPMENT MUTUAL FUND – more popularly known as Pag-IBIG Fund is charged with the development of savings scheme for home acquisition by private and government employees

HOUSING AND LAND USE REGULATORY BOARD – the sole regulatory body for housing and land development. It is charged with encouraging greater private sector participation in low-cost housing through liberalization of development standards, simplification of regulations and decentralization of approvals for permits and licenses

SSS HDMF GSIS REPRESENTATIVES FROM:

DEVELOPERS

BANKERS

CONTRACTORS

PROFESSIONAL

LOW-INCOME BENEFICIARIES

(E.O. 90, S. 1986)

GOVERNMENT SECTORKEY FINANCE AGENCIES

NHMFC NHA HLURB HGCKEY HOUSING AGENCIES

NEDA DOF DPWHDBM PMS DBP

MMDA

SUPPORT AGENCIES

PRIVATE SECTOR

FUNCTIONS OF THE COUNCILFUNCTIONS OF THE COUNCILFUNCTIONS OF THE COUNCIL

Formulate national goals and strategies for housing and urban development

Recommend necessary legislation and amendments to existing laws on as may be necessary for the attainment of government’s objectives in housing

Encourage maximum private sector participation in all aspects of housing and urban development

Formulate basic policies, guidelines and implementing mechanisms for the disposal or development of acquired or existing assets of the Key Shelter Agencies which are not required for the accomplishment of their basic mandates

Monitor, review and evaluate the effective

exercise by these Key Shelter Agencies of their

assigned functions

Supervise key shelter agencies

Functions of HUDCC under R.A. 7279Functions of HUDCC under R.A. 7279

• formulation of standards and guidelines as well as provision of technical support in the preparation of town and land use plans

• provision of data and information for forward planning by the LGU’s (e.g., population projections, development trends)

• preparation of the National Urban Development and Housing Framework

• preparation and dissemination of the implementing rules and regulations of the Act.

• design of a system for the registration of program beneficiaries

• assistance to LGU’s in obtaining funds and other resources needed in program implementation

• preparation of an Annual Report to the President and Congress on the Implementing of the Act.

CURRENT SITUATION/INDUSTRY ASSESSMENT

CURRENT SITUATION/INDUSTRY ASSESSMENT

HOUSING NEED PROJECTION2001-2004

HOUSING NEED PROJECTION2001-2004

CATEGORY TOTALHOUSING BACKLOG- Doubled-Up- Replacement/Informal Settlers- HomelessNew HouseholdsSubstandard (Upgrading)

Total

1,872,747610,618

1,255,3826,747

1,550,802214,155

3,637,704

REGIONAL DISTRIBUTION OF PROJECTED HOUSING NEED, 2001-2004

REGIONAL DISTRIBUTION OF PROJECTED HOUSING NEED, 2001-2004

REGION Housing Need (Units)

%

Philippines

National Capital RegionRegion IVRegion III

3,637,704

1,096,054655,123344,152

100.00

30.2818.109.51

LuzonRegions I, II, V and CAR

345,968 9.56

VisayasRegions VI to VIII 460,711 12.73MindanaoRegions IX to XII, ARMM and CARAGA

717,589 19.83

REGIONAL DISTRIBUTION OFPROJECTED HOUSING NEED, 2001-2004

REGIONAL DISTRIBUTION OFPROJECTED HOUSING NEED, 2001-2004

NCR –1,096,054(30.28%)

Luzon (Regions I, II, V & CAR) -

345,968(9.56%)

Region IV –655,123(18.10%)

Visayas(Regions VI to VIII) –

460,711(12.73%)

Mindanao(Regions IX to XII,

ARMM and CARAGA)-717,589(19.83%)

Region III –344,152(9.51%)

FACTORS CONTRIBUTING TO THE COUNTRY’S HOUSING SHORTAGEFACTORS CONTRIBUTING TO THE COUNTRY’S HOUSING SHORTAGE

• High Population Growth Rate• High Population Growth Rate

As of May 2000, the Philippine population is 75.6 million and it has been increasing at an average of 250,000 families every year.

The Philippine population is expected to reach 102 Million by the year 2030 if the average annual growth rate of close to 2.36% for the last ten years remains.

Between 1960 and 1995, the Philippines registered an average annual urban growth rate of 5.1%, which is more than double the annual national growth rate and one of the highest in Asia.

• Proliferation of squatter colonies and low affordability of targeted beneficiaries

• Proliferation of squatter colonies and low affordability of targeted beneficiaries

It is estimated that there are about 1.408 million informal settler-families all over the country; and

In Metro Manila alone, the number of informal settlers has reached 726,908 families or 52 % of the total.

NUMBER OF INFORMAL SETTLERS NATIONWIDEAs of 29 October 1999

NUMBER OF INFORMAL SETTLERS NATIONWIDEAs of 29 October 1999

REGION NUMBER OF INFORMAL SETTLERS/HOUSEHOLDS

PERCENTAGE TO TOTAL

GRAND TOTAL 1,408,492 100.00NCR 726,908 51.6

SOUTHERN LUZON & BICOL REGIONRegion 4Region 5

201,536173,185

28,351

14.312.32.0

VISAYASRegion 6Region 7Region 8

180,842113,639

45,15922,044

12.88.13.21.6

NORTHERN & CENTRAL LUZONCARRegion IRegion 2Region 3

145,61715,01721,48919,57789,534

10.31.11.51.46.4

MINDANAORegion 9Region 10Region 11Region 12Region 13ARMM

153,58916,37334,37567,74811,97820,1153,000

10.91.22.44.80.91.40.2

Income Cumulative % age Ave. Annual Ave. Annual Housing Delivery Financing Class (P) of Population Income (P) Housing Expend (P) Mechanism Scheme< 10,000 0.50% 7,902 799 Informal Informal Credit/

Market Self-financing10,000 - 3.9% 16,107 1,536 Informal Informal Credit/19,999 Market Self-financing

20,000 - 11.9% 25,330 2,091 Informal Informal Credit/29,999 Market Self-financing30000 - 22.3% 35,063 2,864 Informal/formal Informal Credit/39,999 market Self-financing/CMP40000 - 32.3% 44,881 3,863 Informal/formal Informal Credit/49,999 market Self-financing/CMP

50,000 - 40.5% 54,854 4,971 Informal/formal Informal Credit/59,999 market Self-financing/CMP

60,000 - 53.4% 69,492 6,822 Formal Market Private formal lenders79,999 GSIS/SSS/HDMF

80,000 - 62.3% 89,429 9,435 Formal Market Private formal lenders89,999 GSIS/SSS/HDMF

100,000 - 76.9% 122,409 15,194 Formal Market Private formal lenders149,999 GSIS/SSS/HDMF

150,000 - 90.0% 191,141 22,208 Formal Market Private formal lenders249,000 GSIS/SSS/HDMF

250,000 - 97.5% 330,041 51,937 Formal Market Private formal lenders499,999 GSIS/SSS/HDMF

500,000 and 100.0% 996,047 134,273 Formal Market Private formal lendersover GSIS/SSS/HDMF

INCOME DISTRIBUTION AND FINANCING SCHEMES

AFFORDABILITY LEVEL OF TARGET BENEFICIARIES

• Spiraling cost of construction materials and land • Spiraling cost of construction materials and land

From 1986-1995, the average growth rate in the average weighted sale price of developed residential land in Metro Manila is about 37.0% in all areas in NCR.

• Low level of housing production • Low level of housing production

From 1987 to October 2000, the government housing program reported a total of 1,189,730 shelter security units produced over a period of 13 years or an average annual housing production of only 91,518 units; This only represents 10.06% of the annual housing need of 909,250 units and 36.61% of the projected annual growth rate of 250,000 families.

Government Allocation for Housing• Historically, government allocation for housing only

accounts for less than 1% of the total annual budget of the government.

• For 2001, 2002 and 2003, government allocation for housing only accounts for 0.82%, 0.26% and 0.32% of the government annual budget, respectively.

YEARNATIONAL BUDGET

(A)(In Billion Pesos)

APPROPRIATION TO HOUSING

(B)(In Billion Pesos)

PERCENTAGE(%)B/A

19931994199519961997199819992000200120022003

209,437.00322,685.00387,398.00394,855.20433,817.54546,743.82579,481.00419,493.00339,500.00768,804.73804,200.00

0.8491.3842.0651.1671.9732.9401.7125.8542.7542.0232.588

0.410.430.530.300.460.540.301.400.820.260.32

(Source: GAA)

CONTRIBUTIONS OF SSS, GSIS AND HDMF TO THE UHLP2002 -- 2005

CONTRIBUTIONS OF SSS, GSIS AND HDMF TO THE UHLP2002 -- 2005

FUNDERS CONTRIBUTION (BILLION)

PERCENTAGE(%)

SSS

GSIS

HDMF

30.00

24.00

24.00

38.40

30.80

30.80

TOTAL 78.00 100.00AVERAGE ANNUAL CONTRIBUTION = P 19.5 B

PHILIPPINE HOUSING POLICIES

PHILIPPINE HOUSING POLICIES

Housing as a means of social intervention and catalyst for economic activity Maximum multi-sectoral

participation

People centered and aided self-help approach to housing

Easier land access for housing

Development of regional growth poles

Sustainability and matching of housing finance with beneficiaries affordability

URBAN-RURAL DISTRIBUTION OF THE POPULATION1948-2000

URBAN-RURAL DISTRIBUTION OF THE POPULATION1948-2000

CENSUS TOTAL POP. OVERALLYEAR (MILLIONS) GROWTH Number Percent Growth Number Percent Growth

RATE Rate Rate

19.2327.0936.6442.0748.260.6868.6273.33 - -

URBAN POPULATION RURAL POPULATION

19481960197019751980199019952000

2.893.012.802.752.332.322.01

5.538.0712.0714.0417.9429.6432.9

-

30.029.7432.9033.3737.2148.8448.80

-

3.744.103.065.025.14

-

14.0519.0624.6128.0230.1631.0535.70

70.6770.2566.60 62.5751.17 51.8051.80

3.572.582.62 1.48 0.58

-

Source: NEDA

SUMMARY OF APPROVED APPLICATIONS FOR LAND USE CONVERSIONSUMMARY OF APPROVED APPLICATIONS FOR LAND USE CONVERSIONAs of 31 December 2001As of 31 December 2001

(Sorted by Year)(Sorted by Year)

YEAR NO. OF LUCF AREA (HA) IN PERCENT

1979-19871988198919901991

199419931992

1995199619971998199920002001

Undated

41239

347266161154267159158210246107172

949

2,405

27.4147335.2710551.1756

1790.59763230.93621992.76061534.198

4189.01382443.44043254.11032988.86375885.20643514.64652272.80421080.3723223.7259

35,314.5372

0.080.951.565.079.155.644.34

11.866.929.218.46

16.679.956.443.060.63

100.00TOTAL

Source: HUDCC

SUMMARY OF APPROVED APPLICATIONS FOR LAND USE CONVERSIONSUMMARY OF APPROVED APPLICATIONS FOR LAND USE CONVERSIONAs of 31 December 2001As of 31 December 2001

(Sorted by Region)(Sorted by Region)

REGION NO. OF LUCF AREA (HA) IN PERCENTCAR

IIIIIIIV

VIIVIV

VIIIIXXXIXIIXIII

TOTAL

5072

233370707131186655730

1392618024

2,405.00

171.3002779.5668403.9396

7,707.025814,501.23611,625.16982,337.1621

519.1612355.1575325.8790

1,566.30814,396.77.27

526.435599.4228

35,314.5372

0.492.211.14

21.8241.064.606.621.471.010.924.44

12.451.490.28

100.00

Source: HUDCC

DEPLOYMENT OF OVERSEAS FILIPINO WORKERSOWWA vis-à-vis HDMF Figures

(As of July 31, 2002)

DEPLOYMENT OF OVERSEAS FILIPINO WORKERSOWWA vis-à-vis HDMF Figures

(As of July 31, 2002)

OWWAContrac Workers

HDMF/ POPMembers

Percent toOWWA

ASIA -PACIPIC HongkongSingaporeJapanKoreaBrunieMalaysiaTaiwanSaipanGuam, USAPalauOthers

SUB-TOTAL

160,000120,00090,00040,00028,000

120,00025,00020,000

1,0005,000

-609,000

7,5402,189

58656

786236906

2,5775421

25315,240

4.71%1.82%0.65%0.14%2.81%0.20%3.62%

12.89%5.40%0.42%

-2.50%

Deployment of Overseas Filipino Workers. . . . .continuation

OWWAContrac Workers

HDMF/ POPMembers

Percent toOWWA

MIDDLE EASTSaudi Arabia

Riyad (Central)Jeddah (Western)Alkhobar (Eastern)

QatarKuwaitBahrainU.A.E.

Abua Dhabi AreaDubai Area

OmanLibyaLebanonJordanCyprusOthers

SUB-TOTAL

250,000200,000185,000

42,00080,00020,000

111,10046,10065,00021,00018,00022,000

1,5003,000

953,600

12,2039,465

10,469989

4,0141,4114,111

190231

1,06415

109118

953,600

4.88%4.73%5.66%2.35%5.02%7.06%3.70%

0.90%1.28%4.84%1.00%3.63%

4.65%

OWWAContrac Workers

Deployment of Overseas Filipino Workers. . . . .continuation

HDMF/ POPMembers

Percent toOWWA

EUROPEItaly

MilanRome

Athens, GreeceU.K. SpainGermanyOthers

SUB-TOTALNORTH AMERICA

Canada/USASUB-TOTAL

SEAFARERS Sea BasedOthers (Africa)

SUB-TOTAL

40,00060,00030,00070,00035,00030,000

46,100

250,000250,000

200,000

200,000

5,1417,354

674497

2,026208

1,829 17,729

2,8092,809

4,59960

200,000

12.85%12.26%

2.25%0.71%5.79%0.69%

6.69%

1.12%1.12%

2.30%

2.33%

TOTAL 2,277,600 84,790 3.72%Source: HUDCC

PROSPECTS ANDRECOMMENDATIONS

PROSPECTS ANDRECOMMENDATIONS

PROSPECTS AND RECOMMENDATIONSPROSPECTS AND RECOMMENDATIONS1. Housing has been declared as a centerpiece program by the

government. The Presidential Commission for Mass Housing was created to ensure that housing finance and regulatory framework are consistent with the objective of fast tracking housing production pump-priming the economy while addressing the housing need and generating employment and livelihood opportunities

2. While funding has been adequately addressed by the commitments by the government financial institutions, housing production will remain to be extremely difficult in the light ofexcessive bureaucratic red tape, unnecessary requirements and over regulation on the part of government regulatory agencies

3. The case to case need to obtain per project land conversion fromthe Department of Agrarian Reform (DAR), as well as environmental clearance certificate from the Department of Environment and Natural Resources (DENR) will continue to be the major obstacle in production. There will be clamor and needfor a forward land use planning, allocation and zoning of land resources.

4. The Local Government Units (LGUs) with the private sector will play major and important roles in urban and regional planning activities

5. Participation of other financial institutions/banks in home mortgage financing, operationalization of the secondary mortgage market system and a more sustainable source of funding for the shelter sector. Private sector led financing with government concentrating on socialized housing

6. Fundamentals for housing are all present. Institutions, policies, housing need and demand, participation and commitment from other national, local government, private sector and communities. There is a need for orchestration and synergy to attain the common goal.

The housing program should now depart from unfavorable past practices. First, housing program should be made sustainable. Second, it should be market-oriented and should provide for and environment that is competitive and transparent. Third,it should be demand driven instead of supply driven. Fourth, it should be private sector led. And fifth, it should be decentralized and deregulated.