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Microfinance sector to help gov’t housing, says Binay

10/15/2011 [ ]

Vice President Jejomar Binay said the housing sector can draw from the success of the microfinance sector in formulating long-term solutions to the country’s housing backlog.

He said both sectors carry a similar intent of alleviating the plight of the poor and that both sectors create spin-off activities in terms of stimulating local economies and creating additional employment.

“The difference is that microfinance has established more maturity and profitability whereas the housing sector is in its infant stages, as far as being a social business is concerned,” Binay said in a speech during the 43rd Annual Conference of the Financial Executives Institute of the Philippines (FINEX) at the Mariott Hotel.

“Experts from the academe, the public and private sector have developed an intimate knowledge of what can make microfinance work or fail, and this has led to admirable growth in that industry over the past decade,” he added.

Binay dispelled the notion that government housing is free and urged financial executives to work together with the housing sector in examining policies, programs and objectives that need reform.

“In our meetings with communities, the message is clear: The terms of payment are being made as affordable as they can be, but they must be paid if the program is to continue,” he said.

“Yes, the output must hit the desired mark, but it must be profitable if the private sector is to throw its support behind it,” he added.

According to Binay, the Social Housing Finance Corporation (SHFC) is already offering a Mortgage Program to aid Community Associations purchase land that the community already occupies but is not owned by the occupants.

“This has been of help in addressing the housing need of informal settlers but clearly, the road ahead is long and much remains to be done,” he said.

Binay said they are also currently studying a socialized housing model where the housing will be provided first, with low-cost financing extended by the private sector for this purpose, and the government providing subsidies.

He said that the idea has some merit but they are conducting a thorough examination in order to determine if it can be implemented and sustained.

“We need to ensure that our labors reach the entirety of the sectors needing housing, while remaining should be sustainable. It becomes necessary to evaluate our financing strategies and operational policies if the programs we launch are to succeed,” he added.

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