National Home Mortgage Finance Corp. (NHMFC) president Angelico T. Salud fund trustee and administrator of government subsidies for lending under the Community Mortgage Program (CMP), said that the absence of any subsidies this year would severely limit home lending to the informal sector.
Salud reported that while it received no government subsidies to fund CMP last year, NHMFC, however, got P900 million in realigned funds coming from unused funds accumulated under the Abot-Kaya Pabahay Fund Program, also administered by the agency.
Of this amount, NHMFC lent out some P612 million to the homeless underprivileged last year.
Under the 2004 GAA bill, NHMFC has a proposed allocation of some P500-million intended to assist more than 10,000 urban poor beneficiaries.
Aside from being a priority project of the Arroyo administration the Community Mortgage Program (CMP) needs urgent fund provision this year, as it would eventually be devolved to a new agency – the Social Housing Finance Corp. (SHFC) – pursuant to Executive Order 727 signed by President Arroyo last Jan. 20, Salud pointed out.
SFHC, to be registered as a wholly-owned subsidiary of NHMFC, shall serve as the lead government agency to undertake social housing programs that will cater to the formal and informal sectors in the low-income bracket, and shall take charge of developing and administering social housing program schemes, particularly CMP and the Abot-Kaya Pabahay Fund program, Salud added.
Meanwhile, joining the urban poor’s clamor for the recall of EO 272, the employees’ union of NHMFC has warned that privatization of the CMP through the creation of the Social Housing Finance Corp. (SHFC) would raise the costs of informal housing loans beyond the affordability of the informal settlers.
In a press statement, Miguel D. Maga Jr., president of the Home Mortgage Employees Association Inc. (HOMEAI), charged that the creation of SHFC would not be a viable alternative to NHMFC, claiming that CMP privatization through EO 272 along with other social housing functions of NHMFC would be anti-poor.
"Take the case of the MWSS, when it was privatized, the cost of water, a very basic need like housing, increased and is still increasing," Maga pointed out.
"Similarly, for the SHFC to sustain itself, with a new organization, new set of officers and employees; and additional operational costs, it would have to increase the loan interest rates and fees being charged the urban poor to offset the lack of government subsidies to its operations," Maga said.