"I have decided to stay as chairman of the Housing and Urban Development Coordinating Council (HUDCC). It is in this position that I believe I can be of greater service to the President and to the public," Defensor said in a statement.
"I am very grateful to the President for her continued support and confidence in my capabilities and for affirming my vision and reform agenda for the housing sector," he said.
"My chief mission now is to become a good housing secretary to a good President," Defensor added.
Executive Secretary Renato de Villa said Defensor was given assurances that he would be in control of the government’s housing program and that the President would coordinate only with him.
"All agencies covered by the HUDCC must recognize him (Defensor) as their chief. They cannot go direct (to the President) without going through him," De Villa said.
Presidential chief of staff Renato Corona, who was present in a breakfast meeting the President had with Defensor on Tuesday, echoed the Palace position.
"This is not a big problem incapable of solution," Corona said. "These little problems really happen sometimes in a group of highly charged, highly driven and strong-willed personalities like the members of the Cabinet."
The President told a news conference on Tuesday that Defensor was free to quit the Cabinet if he decides to return to politics. The housing chief was a congressman representing Quezon City’s third district before joining the Cabinet.
Last week, he planned to quit and had in fact prepared a three-paragraph letter tendering his "irrevocable resignation effective immediately."
Defensor felt slighted over three major appointments the President made in the housing sector. Presidential Management Staff head Vicky Garchitorena cleared the names with Finance Secretary Alberto Romulo and submitted the appointment papers to Mrs. Arroyo without consulting Defensor. Garchitorena later publicly apologized to Defensor.
Last Monday, the President talked to Defensor to dissuade him from quitting.
The President also recalled the appointment of Zorayda Alonzo as head of the National Home Mortgage Finance Corp. (NHMFC) after discovering that the incumbent NHMFC president Angelito Salud submitted only a courtesy resignation.
Under the law, the NHMFC chief executive enjoys a fixed term of office.
The appointment’s recall is seen as a move to appease Defensor, who strongly objected to Alonzo’s appointment.
However, the appointments of former Angeles City Mayor Edgardo Pamintuan to the National Housing Authority (NHA) and Manuel Crisostomo to the Pag-IBIG Fund will apparently stay.
Defensor appears not to have any objections to the appointment of the two.
"I think Ed Pamintuan knows that whatever will be his official action relative to his being head of the NHA will have to pass through Mike," De Villa said.
After the Monday meeting, Defensor told reporters he was confused and had asked the President for two days to make a final decision.
In his statement, he thanked the President for her "continued confidence in my capabilities and for affirming my vision and reform agenda for the housing sector."
"The healthy discussions over appointments were minor irritants that have been ironed out to the satisfaction of all. The candor that marked the exchange of ideas bespeaks of a cohesive Cabinet," Defensor said.
He added that he would repay the President’s confidence in him with hard work "so that our people can enjoy their basic human right to shelter the soonest possible time." — With Marichu Villanueva