Two House bills to raise P270B for housing sector

House Speaker Jose de Venecia has unveiled two legislative proposals to raise some P270 billion from non-performing assets of commercial banks to finance low-cost housing projects and thus drastically reduce the country’s backlog of 4.5 million housing units.

De Venecia spoke before the CREBA’s 9th monthly business meeting at Hotel Intercontinental in Makati City last Thursday. CREBA national president Charlie V. Gorayeb led the large audience of industry leaders and professionals in welcoming the proposals. He called De Venecia "the country’s true champion of housing."

The Speaker informed CREBA that he has sent to President Arroyo the proposal for a large-scale securitization program to raise the large housing fund and a counterpart bill creating a Special Purpose Vehicle to buy up to P270 billion worth of non-performing assets of the banking system.

The banks, he said, would, in turn, make the proceeds from the sale of foreclosed mortgages available for low-cost housing projects.

De Venecia told CREBA: "Creativity and political will on the part of the national leadership is important to fully implement the country’s economic development programs to see the light of day. We can do it."

De Venecia also supported the proposed Omnibus Housing and Urban Development Act introduced in the House by Rep. Eduardo C. Zialcita, vice-chairman of the House committee on housing, which consolidated the major components of CREBA’s main advocacy for addressing the housing problem on four fronts, finance, production, regulation and administrative structures.

CREBA seeks, among others, the creation of a centralized homebuyer financing program and a Department of Housing and Urban Development to carry out the integrated housing program.

De Venecia said the massive mobilization of the country’s untapped internal assets would finance not only housing development, but also the President’s medium and long-term socio-economic development programs.

Securitization or the issuance and sale of competitive bonds secured by the banking system’s idle assets, the Speaker stressed, could raise some $25 billion to $50 billion for the government. An initial $1 billion could be raised by securitizing part of the $10 billion government share due from the Malampaya gas flow in the Palawan offshore which will begin operating in the next few weeks.

This would enable the government to raise an initial $1 billion of the $2.5 billion needed by the country as counterpart funds so it could avail of the $10 billion Official Development Assistance (ODA) funds committed by donor countries like Japan and other countries, but which the government has so far failed to tap for more than a decade. ODA is financing assistance at very concessional terms of 30 year’s payment at less than one percent interest and a 10-year grace period on principal.

To complete the counterpart fund requirements, De Venecia also identified the P70 billion or about $1.3 billion coconut levy funds and the $650 million Marcos wealth now held in escrow with the Philippine National Bank.