The proposed budget for the Housing and Urban Development Coordinating Council (HUDCC) next year, representing a mere 0.12-percent of the national budget, will pose a challenge in addressing the 6.57-million housing backlog in the country.
“I hope this can be remedied during the deliberation for budget of all government agencies [because]napakababa talaga ng [it is really low at]0.12 [percent],” Housing and Urban Development Coordinating Council (HUDCC) Chairman Eduardo Del Rosario said in an interview with The Manila Times.
Latest data from the Philippine Research and Training Institute show that the projected housing backlog for 2017-2022 has increased from the earlier projection of 5.7 million units. To address the ballooning figure, HUDCC said it is targeting to produce a minimum of 250,000 units annually in the next few years.
However, with the reduced budget cut to P4.7 billion from the P15 billion given this year, the agency said it will have a hard time meeting the goal by 2018. Del Rosario said that the ideal budget for the next 10 years is P420 billion, or P42 billion annually.
To address the growing housing need despite of low budget, HUDCC plans to engage more participation from the private sector by helping them reduce the red tape, which is said to be developers’ primary concern.
HUDCC plans to reduce the time of document processing for projects from the usual 1-3 years to between six months to a year and a half. “I think that would be a great start in helping them, because the longer it takes for the awarding of houses, the longer that the developers will be losing because of the interest rate, if ever they will be borrowing money to finance the housing project,” Del Rosario said.
“We are truly helping the private sector because we know that the housing need, the housing requirement, cannot be addressed solely by the government,” he added.
Despite the insufficient budget allocation, Del Rosario said he still believes the housing sector is still in “the right direction” toward addressing the backlog, especially with Pag-IBIG Fund (Home Development Mutual Fund) recently lowering its interest rates.
This year, Pag-IBIG reduced its interest rate to 3 percent and 5.5 percent for loans amounting to P450,000 and P450,000 above, respectively. The decrease, said Del Rosario, was a strategic move to encourage more people to avail loans for their housing needs.
Of the 6.57 million housing needs, the government aims to produce 1.45 million housing units by the end of the Duterte administration.
“We are transitioning from merely targeting a five-year program [to targeting]a 10-year program so that after the Duterte administration, the next administration will now have a template for the 6th to 10th year so they can continue on with the program,” Del Rosario said.