Earlier this year, I spent a good two weeks at Wharton, University of Pennsylvania, listening to learned lectures in International Housing Finance. This was not long after the U.S. Housing bubble had burst and Fannie Mae and Freddie Mac had become two of the most ignoble names you heard in the world of housing and finance.
There were those who thought the U.S. was the wrong place to go to and learn anything new about housing finance. But we thought that precisely because they had been burned, they could probably teach us a lot. If they could not teach us what to do, they could at least teach us what to avoid.
As we close this forum on housing finance today, I could see that quite a number of those in attendance there are among those with us here. This is perhaps an opportunity for them to share with us the insights they have gained from that exposure, or have developed since then. I look forward to a highly animated and vigorous exchange of ideas.
At the Housing and Urban Developing Coordinating Council (HUDCC) and the Key Shelter Agencies (KSAS), which I chair, we all share a common task. We are to house the entire nation. This goes far beyond building mere physical structures, but I should like to dwell on this at some length later. For now, I should like to start with a few givens.
First, as of 2010, the housing gap stands at about 3.6 million. We must build all those homes according to a given timetable, and fill the existing backlog before we respond to any future demand.
By 2016, our key shelter agencies should be able to help some 1.5 million families meet their housing needs. The National Housing Authority (NHA) alone should be able to provide some 430,000 of the needed units, mostly for the families of informal settlers.
As this entails massive relocation, we are now instituting a national resettlement policy framework that will establish common procedures and guidelines for all agencies involved in resettlement.
We have also revised the guidelines of the Community Mortgage Program (CMP) of the Socialized Housing Finance Corporation (SHFC) in order to expedite the provision of “secure tenure” to informal settlers and at the same time protect them from unscrupulous operators.
Hand in hand with these activities, Pag-IBIG fund has reached an agreement with GSIS on a credit facility that allows the fund to administer GSIS’ P5 billion for housing. At the same time we are encouraging rural banks and other microfinance institutions to help finance the requirements of rural homebuyers, and the marginalized rural sector.
The housing agencies are also reviewing their policies in end-buyer financing, developmental financing, the guaranty system, the secondary mortgage market, in order to make more funds available for housing.
At the Home Guaranty Corporation (HGC), we are exploring various ways to strengthen its operations, increase its guaranty capacity and develop new guaranty products to eliminate the risk on private investments and stimulate the flow of more private capital into public housing.
Through the National Home Mortgage Finance Corporation (NHMFC), the secondary mortgage market will play a critical role in boosting housing finance by plowing back funds realized from increased securitization into building more homes.
Ultimately, we expect to be able to consolidate and coordinate all our plans, programs and projects related to land use, housing and urban development upon the creation of a department of housing and urban development, which I hope will happen very soon. This is one of the priority measures the president and the leaders of congress have agreed to work on during the last LEDAC meeting.
In the meantime, we are bringing our shelter program to the grassroots through the Pabahay caravan. Through the caravan, we are able to establish direct face-to-face contact with the local government and the local population and offer them technical help in accessing our programs.
For instance, HLURB and HUDCC provide direct assistance in the preparation of the lgus’ comprehensive land use and shelter plans. Pag-IBIG has a lending window for LGUs with available land for housing but which do not have enough funds for the purpose. For its part, the NHA is open to joint ventures with LGUs that need to relocate informal settlers. The LGU provides the land while NHA funds the site development.
For LGUs without land, the SHFC has its localized CMP to provide up to 75 percent of the cost of the housing project. The SHFC has targeted 70 percent of its portfolio for cities outside the national capital region, with priority to highly urbanized cities, cities with high population growth rates and the metro cities.
Stronger linkages with the LGUs have started to bear fruit. Pag-IBIG fund has signed a Memorandum of Understanding (MOU) with Quezon City for a housing project in Barangay Payatas for low-income personnel and informal settlers occupying danger areas. A similar MOU was forged with the municipality of Ligao, in Albay during our caravan in Bicol only this week. Other projects are in the assessment stage, with respect to the technical design of the units, the specifications and income profiling of beneficiaries.
On the other hand, NHA is now processing eight (8) projects to be funded this year, and 32 more in 2012, intended to benefit more than 21,000 families.
Given the critical role of the LGUs, we actively promote the creation of a land management and housing office at the local level, one that is familiar with the locality’s needs and resources and would be in the best position to determine the appropriate uses of land as well as its shelter priorities. This enables the concerned national government agencies and LGUs to work closely together and fast-track the delivery of housing services.
Our partnership with LGUs as well as with real estate companies further allows us to work together in the liquidation of some acquired assets of our shelter agencies. This is an important undertaking, given the government’s need for funds to finance its projects.
Admittedly, the national government is not in a position to address all of the country’s housing needs alone. With the demand for decent housing growing at a rate faster than the state is able to provide for it, the participation of the private sector is both indispensable and imperative.
That is why the participation of Gawad Kalinga and Habitat for Humanity, both of which have earned international acclaim for the nobility of their purpose, and the quality of their projects, inspires us to aim even higher, even as we see in it a reward that is not easy to match.
This imposes upon us a duty to keep the highest standards of dedication and performance in our assigned duties. We cannot afford to be seen as inferior to any private effort without risking public support for our programs and projects.
But as I said in the beginning, our concept of “housing the nation” must go beyond the mere act of building houses for those in need. And here, I should like to talk a little bit more about that before I close.
Public housing is not simply a commercial operation where those who build homes for the poor either by themselves or in collaboration with government should make a lot of money above all. Although it is neither immoral nor illegal to turn a decent return on capital, profit cannot be the primary motive for this venture.
For housing is not only central to the dignity of the individual and the family; it is also key to sustainable living. The houses where we live help to shape our individual lives and the life of the community. They do not only protect us from the elements, they ultimately become part of our social expression, part of what we are. Thus, when we build a house we do not only build a home; we build a city, we build a culture.
In providing decent and affordable housing for the poor, we are given a new opportunity to remake our towns and especially our cities, where the great numbers of informal settlers are to be found.
We need to recognize the fact that we need to liberate the poor not only from homelessness, but above all from the congestion, pollution, urban sprawl and traffic jams that have destroyed our ecosystem. We have to transform housing into a necessary intervention that will arrest the “downward spiral of social decline.”
Of the fifty most crowded cities in the world, old Manila leads all the rest, with a population density of over 40,000 per square kilometer. It will take a lot of doing to build houses for the poor in such a city that will at the same time ensure its social and ecological sustainability. But it must be done. We have no choice but to do it. We must do it or perish. Only by having sustainable cities can we sustain the civic and social life of our communities.
We must think of how it impacts the environment, and vice versa, each time we select a site or build on it. How will it stand against or mitigate the combined onslaught of poverty, pollution, climate change and the destruction of nature by various means? How will it enrich the private and public lives of those who will dwell therein, and of the communities next to it? Will it allow families to raise and educate their children well, away from criminal elements and dangerous influences? Will it allow a gentler and easier life for young couples and for seniors? Will it allow easy integration of the population therein into the economic life of the nation?
There is a long list of questions. The bottom line is that we must make our cities sustainable. We have such a beautiful country, except that it is not uncommon to hear even Filipinos say, “yes, the Philippines is beautiful, but you have to get out of the city to see it and savor it.” With the help of intelligent housing, we can, as we must, replan, rebuild and renew our cities beginning now.
For as the noted British architect Richard Rodgers put it in his famous BBC lecture series in 1995, “in the beginning we built our cities to overcome our environment”; now, they have destroyed our environment; “in the future we must build cities to nurture it.”
Thank you and good day.