Wednesday, June 4, 2008 [ philstar.com ]
The Chamber of Real Estate and Builders Association (CREBA) has proposed the creation of a multi-billion fund to be exclusively directed to food security, particularly the provision of much-needed agricultural infrastructure support.
The fund shall consist of, among others, a patriotic bond flotation which shall tap the foreign-denominated earnings of overseas Filipino workers (OFWs) who are willing to invest.
In an interview with The STAR, CREBA president Reghis Romero II said that with OFWs remitting to the Philippines only about 60 percent of what they earn, about $1.2 billion or around $300 per OFW numbering to around four million can be tapped for the creation of the fund.
Romero said the CREBA International Foundation, which sells real estate properties in the Philippines to the international market, can take care of marketing the bonds to OFWs. The private funds, he added, can be managed by the Development Bank of the Philippines.
The proposal has already been submitted to the Department of Finance and the Bangko Sentral ng Pilipinas.
Of the total proceeds from the bond flotation, he said about 10 percent can be utilized by government for the farming sector, 10 percent for housing, another 10 percent for infrastructure, and the remainder for other developmental purposes.
The group has also proposed alternative sources for the fund, including a 10 percent levy on non-essential imports, an additional one-half of one percent real estate tax, and an additional two percent income tax on businesses earning at least P1 million annually. However, such businesses shall be considered a prime borrower entitled to a preferential rate of one-half of one percent to one percent lower than the usual rate.
Meanwhile, CREBA proposed that each family shall be required to plant a tree every quarter or pay its equivalent of P1,000.
Romero emphasized that the current food crisis that the country is facing has nothing to do with land conversions.
He cited figures from the Department of Agrarian Reform which revealed that only 0.36 percent of total land devoted to rice production have been converted to other uses over the last 20 years. “The Philippines needs about 20 million metric tons of rice every year, of which around 16 million are produced locally and the remaining four million are imported. The total yield of the lands that have been converted is negligible compared to the amount of rice that we are importing,” he said.
CREBA earlier warned government of an imminent economic disaster within the next two years following a ban on land conversions imposed by the Department of Agrarian Reform and virtually upheld by President Arroyo in Administrative Order no. 226.
Asking for an immediate lifting of the ban Romero pointed out that the land conversion ban would neither solve the food shortage nor the energy crunch as being suggested by the government, but could turn the country’s housing backlog into another crisis.
With about 200,000 units of low-cost houses to be produced every year at P500,000 each, Romero said the economy stands to lose a lot more than the few hectares of marginal agricultural lands being converted to other uses.
“With food, housing and energy crises, you definitely have a perfect recipe for an economic disaster within the next two years,” Romero stressed, as he recounted the 1997 East Asian currency squeeze and the ongoing US subprime mortgage debacle that all emanated from a mishandling of the real estate sector. “You cannot just tinker carelessly with the real estate industry without facing grave economic consequences.”
The land conversion ban, he said, could eventually lead halt all construction activities, crippling the entire supply chain – from land developers and housing contractors to all the industry suppliers and service providers, including manufacturing, tourism and retail sectors.
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