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BOI decides to continue tax perks for housing

Monday, June 16, 2008 [ manilatimes.net ]

IN a bid to address the Philippines’ housing backlog, the Board of Investments (BOI) has decided to extend the grant of tax incentives and other perks to mass housing projects.

Trade Secretary Peter B. Favila, who is also BOI chairman, said incentives to this sector would encourage more real estate developers to engage in affordable housing projects.

“This will also fuel real estate firms to develop new and innovative housing technologies,” he said.

Favila said that by providing incentives, affordable housing will be made available to low-income earners, and overseas Filipino workers. Overseas Filipino workers account for half of house-and-lot buyers in the country.

According to the Medium Term Philippine Development Plan 2004-2010, the country’s population will need at least 3.756 million units of housing, while the government’s housing target for the period is set at 1.145 million units.

This target pertains to the housing target assistance or shelter security units, which people can avail of through programs of the Housing and Urban Development Coordinating Council (Hudcc), National Housing Authority, Home Development Mutual Fund, National Home Mortgage Finance Corp., Government Service Insurance System, Social Security System and the Development Bank of the Philippines.

Favila said that about 2.6 million housing units would not be covered by the government’s housing assistance package.

“The shortfall is an opportunity for the private sector to participate in socialized and low cost housing finance and construction,” he said.

Trade Undersecretary Elmer C. Hernandez, who is also the managing head of the BOI, said the country would need 2,754 projects at an average of 426 units each to construct 1.2 million low cost housing units.

“These projects can avail of BOI incentives,” he said.

Hernandez said that from 2006 to 2007, BOI registered 97 mass housing projects with an equivalent capacity of 42,258 low cost housing units, representing 32 percent of the 133,183 units constructed for the period.

These projects created 23,373 jobs.

According to Hudcc data, completing a housing unit requires 8.3 persons to work for three weeks or a total of 124 men a day.

Hudcc guidelines stated that a socialized house would cost P300,000, while low-cost housing should be priced P3 million or below. -- Katrina Mennen A. Valdez

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