By Prinz P. Magtulis (The Philippine
Star) | Updated September 23, 2015 - 12:00am
Housing backlog in the Philippines is
estimated at 3.6 billion despite the booming property
MANILA, Philippines - The Philippines
is embarking on two local and overseas initiatives collectively worth around
P2.4 billion this year to address the country’s housing backlog, the National
Home Mortgage Corp. (NHMC) said.
Topping the list is the country’s
participation in a fund pool to be discussed in this year’s Fixed Income Summit
by the Association of South East Asian Nations (Asean) from Sept. 28 to 29
which Manila is spearheading.
The “co-mingled” fund has secured the
nod of Malaysia and Indonesia and will be up for discussion by four other
countries, NHMC president Felixberto Bustos Jr. told reporters in a briefing
last Monday.
“We are looking at submitting $5 to $8
million for the amount of the pool. This will be backed by our best assets and
will be mixed with the other assets in the region,” he said, adding the
mechanism is targeted to be set up on “the first quarter.”
Discussions will focus on risk sharing
among countries and the type of assets that will be eligible to back up the
funds. The funds, Bustos said, will be distributed through bond issuances
within the Asean.
Housing backlog in the Philippines is
estimated at 3.6 billion despite the booming property sector.
With the Asean fund pool, Bustos said
the country hopes to provide “alternative funding” for housing through the
fixed-income sector. In this way as well, the country will not lose out on
other Asean countries once the integration kicks in by the end of 2015.
“This will be good since right now, we
do not have a Philippine (fixed income) product. Our fear is once the
integration happens and Asean players come in, our huge liquidity will flow
out,” Bustos said.
“At least with this, we can secure
some of our own funding together with the rest of the Asean,” he said.
Locally, the NHMC is also on the final
stages of issuing P2-billion worth of local bonds, proceeds of which will
“strictly” be channeled to low-cost and socialized housing. The project was
already “approved in principle” by the Housing and Land Use Regulatory Board.
The goal is to attract large
developers which are having difficulty complying with the provisions of
Republic Act No. 7279 that mandates the development of at least 20 percent of
total project area to low-cost housing.
The P2 billion will only be an
“initial issuance,” he told The STAR.
“Developers find it difficult to
comply because of the social costs it entails,” Bustos explained.
“They feel like if they try to comply
with the law, what they will save in one area where they have housing projects
will be offset by costs from another area where they have socialized housing
projects,” he added.
This was not the first time the NHMC
offered bonds for socialized housing. In 2002 and 2009, two sets of “Bahay
Bonds” with combined worth of P2.6 billion were issued by the agency to
companies and individual investors.
Similar to these undertakings, the
planned program this year will be backed by mortgage payments to pay for the
interest of the bonds to be issued. The issuance however will only be open for
housing developers, not retail investors.
“We feel that once we develop the
fixed income market, we could have another source of financing. On the Asean
side, there will be more and more infrastructure projects, so fixed income
could be a good source of funds for that,” Bustos said.
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