06/30/2008 [ tribune.net.ph ]
After giving away tax “freebies” to more than 100 mass housing projects in the last two years, the Board of Investments (BoI) suddenly recalled a law that requires developers of mass housing projects to set aside at least 20 percent of their total project costs to build houses for those who could only afford units at P300,000 and below.
Under Republic Act 7279 or otherwise known as the Urban Development and Housing Act of 1992, balanced housing development program shall include a system to be specified in the framework plan whereby developers of proposed subdivision projects shall be required to develop an area for socialized housing equivalent to at least 20 percent of the total subdivision area or total subdivision project cost, at the option of the developer, within the same city or municipality, whenever feasible, and in accordance with the standards set by the Housing and Land Use Regulatory Board and other existing laws.
Despite the explanations made by the BoI that all mass housing projects approved for fiscal incentives are required to engage in socialized housing, no registrations that were previously approved have mentioned anything about their plans to also venture in socialized housing.
It was only recently that the BoI stated that there is an existing policy and even highlighted this under the 2008 Investment Priorities Plan.
Prior to the BoI’s announcement that socialized housing project is a prerequisite to the availment of tax perks, developers were rushing to register their mass housing activities mostly high-rise, located in prime areas and costing as much as P3 million per unit, without specific plans to engage in socialized housing.
Earlier, Trade and Industry secretary and BoI head Peter Favila argued that mass housing projects are further encouraged to make housing affordable to low-income earners such as the overseas Filipino workers (OFWs) who were considered as the biggest dollar contributors of the country.
Favila earlier reasoned out that around 50 percent of house and lot buyers in the country are OFWs whom de considered as low-income earners.
According to the 2004 to 2010 Medium Term Philippine Development Plan, the country’s population will need 3.756 million units of housing. The government’s housing target for the period is set at 1.145 million units.
The shortfall was the main reason why the BoI provides attractive package of incentives to encourage businessmen to invest in mass housing projects. “The government by its own is trying to provide the right business environment to encourage mass housing.”
Apparently, all mass housing projects approved by the BoI for the last two years, including those listed in the first half of 2008, despite of the existing law, missed the bigger part intended for the homeless.
Low-cost housing is a housing program for low- to middle-income groups subsidized by the private sector as business ventures with price ranges from P301,000 to P3 million, while socialized housing covers houses and lots undertaken by government or the private sector for underprivileged and homeless citizens priced at P300,000 and below.
The BoI further added the agency is “now reiterating that it is one of the new general requirements of the BoI for availment of income tax holiday among other incentives in the IPP.” Ayen Infante
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