Real Estate Brokers Association of the Philippines, Inc. (REBAP), 32nd Annual Convention

Speech-REBAPMessage of Senator Ferdinand “Bongbong” R. Marcos, Jr. before the Real Estate Brokers Association of the Philippines, Inc. (REBAP), 32nd Annual Convention and Election of Officers and Directors, November 25-27, 2010 at the Holiday Inn Clark, Mimosa Leisure Estate, Clark Freeport Zone, Pampanga –

Distinguished ladies and gentlemen, people in the practice of realty profession, I am honored and privileged to address you this afternoon. As Chairman of the Senate Committee on Local Government and the Committee on Urban Planning, Housing and Resettlement, allow me to share my thoughts, insights and initiatives concerning the housing industry.

Before anything else, let me extend my warmest congratulations to the organizers of this convention with the theme: “REBAP 1 and Beyond 2011: Transformation and Growth.” This is a very memorable event to commemorate the 32 years of your existence as an organization. A job well done!
We get together now for a very vital segment of our economy, the housing industry, which caters to the heart and soul of your work—you, the real estate brokers.

Few would have believed your organization could last and thrive serving the housing needs of our countrymen. During the post –war era, ownership of housing by the average Filipino was still a rarity. Now we continue to be confronted by a nagging housing shortage, especially to the lower income households in our society.
You have the theme “Philippine Housing Directions for 2011 and Beyond and Its Impact to Real Estate Industry in General and Real Estate Service Practitioners in Particular”, let me try my very best to live up to your expectations since I am not exactly an expert on this vital sector which is now part of my major committee responsibilities in the Senate!
Let me start by stating that there are great challenges and opportunities in improving the housing industry in the Philippines, although our housing market is characterized by a huge gap between supply and demand.
With rapid growth in population, the demand for housing continues to rise. From 2001- 2004, housing need was estimated at about 3.6 million units, a staggering amount indeed!
Against the above estimated housing need for the years 2001- 2004, actual supply for the period was only about 0.82 million.

Thus, there is an acute demand for housing, especially at the lower end of the market which has not been adequately met by supply. This demand-supply gap is has been analyzed to be rooted in a least three major factors:
• One is the inability of many poor households to pay the cost of housing, even of the so-called low-cost housing.
• Second is the lack of resources on the part of the government, which traditionally has been the major provider of housing especially to the poor, to meet housing demand for the lower- income households.
• And thirdly, there is lack of incentives for the private sector to engage in supplying this segment of the housing market.
Let me briefly discuss each of these factors:
With regard to the inability of the poor to pay the cost of housing, it is estimated that only about 50 percent of households can afford housing in the formal market. Lack of affordability on the part of the remaining 50 percent has been attributed to:
• Rapid rise in the ratio of housing unit cost to income,
• Very few low-cost alternatives to homeownership in the formal market, and
• Limited innovative housing finance.

In the housing sector, especially the socialized and low-cost segments of the market, it is the government that is the prime provider of housing. The participation of the private sector is very limited due to the perceived high credit risks and low per capita profit levels.
Government does not have adequate resources to finance costly housing programs and is perceived as not providing the right incentives to attract private capital especially for the informal and low-cost housing sectors. Thus the housing sector needs to comprehensively address this rapidly growing housing need and to actively involve the private sector especially in providing socialized housing needs.

An assessment undertaken in 2006 estimated that while the total housing need is growing by roughly 626,000 annually, the total output of all government housing programs combined reached only 190,000 per year. The government, which is the biggest provider of low-income housing, can only muster an average annual output of 130,000 units of social housing assistance, judging from the MTPDP targets of the NEDA.
Being the chairman of both the Senate Committee on Urban Planning, Housing and Resettlement and the Senate Committee on Local Government, I believe that the local governments can pro-actively participate and assist the national government in this challenge posed by the housing sector.

It is now increasingly recognized that local governments hold the key to scaling up and accelerating the delivery of housing assistance, particularly to the urban poor. In my experience as former vice governor and governor of my home province of Ilocos Norte, I have noticed that there are already some promising developments in this direction.
Official development assistance in recent years has focused on helping local governments formulate shelter plans to enable them to realistically size up the investment requirements needed to respond to their housing problems.
The newly created Social Housing Finance Corporation (SHFC), which is administering the Community Mortgage Program (CMP), is mandated to look into a localized CMP which would give local governments a stronger capability to respond to their constituents’ demand for housing and land acquisition loans.

Some local government units have purchased land for their informal settler families, using their own resources and then tapping private organizations like the Gawad Kalinga and Habitat to contribute to the effort.

In addition, there are specific provisions in the local government code, which give local governments the responsibility to address the housing problems in their respective jurisdictions. The other law that grants local governments a crucial role in housing—particularly the issue of informal settlers—is the Urban Development and Housing Act (UDHA OR RA 7279).
In 1998 when I was still a provincial governor, a multi-year monitoring project was initiated to investigate the extent of the compliance by local government with the various provisions of the UDHA.

Most cities have selectively complied with the law, implementing, for instance the beneficiary registration and land inventory but not the designation of socialized housing sites and the restrictions on demolition. The provision of timely and adequate relocation is another provision where compliance has been observed to be quite low.

In Metro Manila, the cities of Las Piñas and Muntinlupa have excellent data bases on their urban poor communities, armed with relevant and correct information, these two cities have programmed the provision of assistance to their urban poor constituents and identified poor settlements to be targeted for assistance when resources become available.
In the Visayas, the cities of Cebu, Lapu-Lapu and Mandaue formed a “city-sharing network” which serves as a forum for sharing experiences and approaches among NGOs, communities and governments on housing programs.
A similar effort was done in the Bicol region by three cities: Naga, Iriga and Legazpi. As a result of their networking, these cities were able to build and update their databases on their poor communities and use them for deserving housing plans and interventions.
So what have we learned from these recent efforts to provide housing to all?

Let me enumerate some important lessons as observed from previous and current housing programs.
(i) The need to meticulously formulate cost recovery efforts and to assiduously implement them;
(ii) With President Aquino’s Public Private Partnership (PPP) flagship program, private sector participation is now envisioned to contribute significantly to urban housing projects.
(iii) In addition, community participation has been recognized to be a crucial and important ingredient to successful urban housing and redevelopment projects.
(iv) Institutional reform and capacity building needs to be improved. The predominant view, still that the role of the government is a “provider” rather than “facilitator”. A mindset that needs to be changed;
(v) There is the perception that government housing finance programs are biased toward homeownership and continue to use formal banking procedures that do not suit the conditions of the urban poor. A more effective housing finance system is one that is able to provide appropriate forms of mortgages and shorter term credit for incremental housing, as well as housing on less-than-totally secure title;
(vi) Efforts at the national level often do not meet the needs and preferences of the targeted poor, and therefore the role of local governments cannot be overemphasized.
(vii) Housing units are getting smaller and smaller for socialized housing; the result has been congestion and unhealthy living conditions.
In short, current housing programs fall way short of effectively responding to existing housing demand, especially of the urban poor. If I may be direct, accomplishments, as claimed by government, are far from satisfactory.

Other areas now seriously considered for improvement may be grouped into six major agenda items:

(i) A wider application for market-based interest rates in order to attract more significant participation of the private sector in low-income housing development;
(ii) Establishment of well- equipped and responsive social housing finance institutions with sustainable pro-poor programs to address the needs of the “poorest of the poor”;
(iii) Providing additional incentives to local governments to assume greater role in shelter development;
(iv) Accelerating the distribution of secure tenure. Housing the low income sector has to be undertaken with a balanced view of ownership and rental. Policies should be tenure neutral, and incentives to stimulate the rental housing market should likewise be provided.
(v) Developing new tools and approaches to overcome the constraints in land acquisition and development as well as sourcing funds for subsidies for socialized housing; and
(vi) Further intensifying the private sector participation in urban redevelopment and socialized housing supply.
There are just too many government agencies catering to housing that do not have clear cut solution and cannot put their acts together. That is why, one of my major advocacies as chairman of the Senate Committee on Urban Planning, Housing and Resettlement is that there should be a very strong department that would integrate and coordinate all housing related agencies into one-roof.

The action and existence of the Housing and Urban Development Coordinating Council (HUDCC) was a step in the right direction but should be considered as a transition agency that would prepare or metamorphose into a single super housing agency paving the way for the creation of the department of housing at the soonest possible time.
The Senate Committee on Urban Planning, Housing and Resettlement, combined with the efforts of concerned housing-related agencies’ executives, has embarked on the preparation of a proposal for the creation of department of housing to consolidate all activities, efforts, programs and resources into a single body that would provide a more effective approach to the problems nagging the shelter industry.

Ladies and gentlemen, I hope I have provoked you with some ideas that must further be developed that would accelerate the improvement of what has been observed as the fairly dismal state of affairs in the housing sector.
Financial logistics is needed to make all of these happen. The housing sector needs to be given a greater share in the national budget if the Philippines’ increasing gap and future demand for housing—as well as improving living conditions—is to be achieved.

We must understand that the provision of shelter to our people is necessary if we are ever to say that the basic services for the survival of our countrymen are indeed being provided and if the President’s pro-poor policy is to be seriously translated into action in the housing sector.

As I join you today, let me reiterate by saying that it is up to us, to help bring this situation to the attention of all concerned and make housing, especially socialized housing, as part of the centerpiece of the present government’s reform agenda .

We must not stop making noise, beating the bushes and getting the attention of policymakers. That is the challenge we have before us. Let us work together so that we can, in this way, make the life of our countrymen better especially the lower income segment of our communities.

Only thus can we secure the life our countrymen dream of.

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