Noted architect urges government to restore consumer confidence

Noted architect Gilbert Yu is urging President Arroyo to restore consumer confidence in the face of increasing corporate distrust following such high-profile cases as the College Assurance Plan (CAP) and Pacific Plans (PPI) and even the ongoing squabble between Fil Estate and the Bases Conversion Development Authority (BCDA).

Yu is particularly concerned about the housing sector which could be a huge economic driver because of its multiplier effect.

Despite claims by some developers that the real estate market is picking up, Yu disputed the supposed recovery of the real estate market.

He cited the fact that in Metro Manila which has a population of 13 million, it cannot absorb even the 2,000 units of housing being sold.

This compares, Yu said, with Singapore which has a mere population of three million but is able to sell 10,000 to 15,000 housing units.

He pointed out that consumers are now more scared to invest in long-gestation projects such as housing and condominium developments following the experience of pre-need plan investors.

"People want to hold on to their cash because they are afraid that they will have no recourse if the development is not completed," Yu said.

Reports of big developers such as Fil Estate having problems with government, Yu said, also tends to turn off possible home buyers.

He therefore urged the Arroyo administration to mandate that payments of home buyers be directed to an escrow/trustee bank instead of being paid directly to the developers who may not be able to finish the project or do not complete the project to the required specifications.

In almost all other countries, except the Philippines, Yu said, their government requires all developers to have an escrow account with trustee banks and are not able to touch the money of the buyers until their projects have been cleared and approved by the proper government housing authority.

In the Philippines, Yu lamented, several home or condominium buyers have been burned by unscrupulous developers who have not completed their projects up to now.

Such negative experiences is scaring other potential home buyers which is causing the stagnation of the housing and real estate market.

Yu warned, "without government protection, big business credibility will slowly deteriorate, consumers will hold on to their cash."