Human Settlements dep’t issues challenge to build resilient communities

The Human Settlements department has invited the private sector to collaborate with the government in building communities that are resilient in the face of climate change and natural disasters.

Undersecretary Henry L. Yap of the Department of Human Settlements and Urban Development (DHSUD), in a keynote speech at a forum organized by BusinessWorld, said “all stakeholders” need to work to create resilient communities.

“To achieve our goal, we need a united front. The realization of an inclusive, resilient, and sustainable human settlements entails coordination and support from all stakeholders, as well as significant funding and investment,” Mr. Yap said at the BusinessWorld Insights Forum, “Building Sustainable and Inclusive Communities for the Future” in Makati City.

“We are inviting the private sector partners, business people and leaders, development partners, and our local government units to partner with us in building a better Philippines,” he added.

Urban planner and Palafox Architecture Group, Inc. President Felino A. Palafox, Jr. said the Philippines needs to have 100 new “sustainable, resilient, and smarter” cities by 2050 to house a population projected to grow to over 150 million.

“By 2050, it is forecast that the Philippines will be the 16th largest economy in the world. There will be 150 million Filipinos by 2050, of which 70% will be urban population. We need 100 new cities by 2050. Otherwise, our existing cities will be as bad, if not worse, than Metro Manila today,” he said.

“We need strong political will with visionary leadership, urban design, and excellent management,” he added.

Ramon Rivero, Robinsons Land Corp. head of corporate planning, strategy, and sustainability, said that sustainable real estate development is an imperative rather than an option.

“Our cities are expanding at a fast rate and with this growth comes the need for more housing, commercial space, and infrastructure. However, this growth must not come at the expense of our environment,” Mr. Rivero said.

“We have to make sustainability very easy for our people, be it in the form of incentives or form of education. It has to be an easy option. You have to design it in a way that is easy and accessible for them to implement,” he added.

TruNorth Homes Founder and Chief Executive Officer Earl Forlales said that sustainable infrastructure and solutions should be more accessible to promote broader adoption by consumers.

“There is no use for a well-planned sustainable community if people cannot afford to live in it. If we’re able to infuse sustainable features and still make it affordable, that would make a sustainable community,” he said.

“Sustainable infrastructure has to be affordable to the regular consumer. The more that we can make sustainable solutions more affordable, behavioral change will naturally follow on the consumer level without forcing it,” he added.

Yvonne Flores, Gokongwei Group head of sustainability and corporate social responsibility, said inclusive urban planning should be approached systemically.

“It is looking at the overall system and implementing solutions systemically,” she said.

“Resilience is an existential must for all of us. We must make sure that the vulnerable within our communities are included in the solutions we’re looking at. It’s about looking those who are vulnerable and ensuring that because we are part of the community, even the vulnerable are protected and included in the solutions that we are looking at,” she added.

Aboitiz Infracapital Economic Estates Vice-President Jolan Formalejo said that committing to sustainable urban development should be the guiding principle in planning inclusive communities.

“With this comes making sure that inclusivity is integrated. The solution is to decongest these cities by providing new regional areas,” he said.

“Once we start in the regions, we have the full opportunity to make a difference,” he added.

BusinessWorld Executive-Vice President Lucien C. Dy Tioco said sustainable cities and communities remain a challenge for the Philippines.

“In an era marked by rapid urbanization and unprecedented global challenges, the need to make our cities and communities inclusive, sustainable, and resilient has never been more critical,” he said.

“Even the effects of recent Typhoon Carina and the southwest monsoon in Metro Manila and Luzon alarm us once again of how crucial it is to make our communities not just ready for disasters but capable of mitigating their impacts to avoid casualties,” he added.

Source: Business World

Government halves number of low-cost housing units it aims to build by 2028

The Department of Human Settlements and Urban Development (DHSUD) on Monday said that it is cutting by half the number of low-cost housing units it is targeting to build by 2028 because of delays, including in getting financing for housing developments.

“Dati 6 million [units], e hindi matatapos yung 3 million,” DHSUD Secretary Jose Rizalino Acuzar told state television PTV.

(It was 6 million units before, but we cannot finish some 3 million units.)

Among the challenges DHSUD is facing is the long processing times — around 9-12 months — for bank loans to housing developers.

 “Kaya, pero matagal. Siyempre pag pumunta ka sa bangko, hahanapan ka ng documentation,” he said.

(It can be done, but it takes a long time. Of course, if you go to the bank, they will ask you for documentation.)

He said that the delays in funding have meant that only 140,000 units of the 1 million a year that the Marcos Jr. administration originally promised have been built.

The administration is looking at a new scheme where the government would borrow the loans and serve as the developer, Acuzar, a real estate developer before joining government, said.

“Instead na private, si gobyerno na kasi si gobyerno puwede mangutang… government-to-government so medyo madali,” he said.

(Instead of private contractors borrowing from banks, the government will be the one to take out the loans… It will be easier because we can do transactions between government offices.)

In 2022, the DHSUD committed to building 1 million housing units annually to address the Philippines’ 6.5-million backlog in residential spaces.

 In 2023, President Ferdinand Marcos Jr. reiterated that promise, noting that his administration is working to construct 1.2 million housing units by the end of that year.

Source: ABC

Dream on

The Philippine government has embarked on an ambitious low-cost housing project of one million units annually over six years to address the increasing numbers of families in Metro Manila and its environs who are unable to afford their own homes.

Initially, the Department of Human Settlements and Urban Development (DHSUD) had made an appeal to the Department of Budget and Management (DBM) for an appropriation of almost P100 billion in its 2023 budget, which not surprisingly was denied.

In fact, the DBM even reduced DHSUD’s approved budget for the year to about P4 billion, which was markedly lower than the 2022 budget of P7.4 billion. So much for the avowed priority declaration of the current administration to solve the country’s housing backlog.

In truth, the BBM government has many “priorities” with assigned numbers in a priority list, but remember that even these numbers are not set in stone. Definitely, a good indicator for defining what’s in the current priority list is what the Speaker of the House will say, and sad to say, mass housing is not at the top.

The need, however, cannot be denied. A minimum wage earner who is the head of a family, even if they hold a permanent job, already needs to appropriate a fifth of the monthly salary to pay for rent.

No wonder that fixed income earners make do with squalid living conditions while struggling to provide the most basic necessities for their growing children. For them, amortizing their own house on a piece of land is something that can only be dreamt.

Relying on the private sector

Not surprisingly, the DHSUD has shifted to a strategy that relies on the private sector to enter into mass housing for low-income families. The financial challenges, however, are too daunting that many only shake their heads and walk away.

Real estate developers have time and again enumerated the harsh realities that confront people who want to start putting in money to buy their own homes, as well as limitations that real estate builders face to address the country’s housing need.

Low-interest rates to finance a new home are available through the Home Development Mutual Fund (or Pag-IBIG) and through the National Housing Authority (NHA), but both government entities have sorely limited funds available for lending.

This means that real estate developers, even if they can secure the funds to build more low-cost houses, are immediately dissuaded from going into projects if their prospective clients will not be able to secure low-interest housing loans with favorable long-term repayment schemes.

Developers also point to the growing scarcity of land that can be devoted to housing. With the current high in-city land values, the only recourse is to move to the metropolis outskirts, but many of these lands are locked in for agriculture, and getting these to be categorized as non-agriculture is beset by bureaucratic limitations.

The DHSUD is toying around with a template for P1.5-million homes that can be available through other government financing institutions like the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).

The mechanics are yet to be hammered out, but the objective should be for LBP and DBP to facilitate housing loans for interested individuals rather than real estate developers. If there are funds available for low-cost housing loans, capital for developers will open up.

Lending risks for low-income borrowers can be higher today, but as the country moves into higher-income level category in the next few years, the possibility of payment defaults is reduced as family income levels improve.

Land use issues

To convert agricultural lands for housing, the DHSUD is talking with relevant local government units (LGUs). Such undertaking is fraught with sensitivities, especially with agricultural lands that had been locked in under the Comprehensive Agrarian Reform Program (CARP).

Agriculture land beneficiaries under CARP are not allowed to sell their acquired properties, nor assign use of the land other than for agriculture. Yet, many of the small land holdings are already being left to fallow as land productivity makes earnings from its agricultural produce uneconomical.

How DHSUD will make its low-cost housing blueprint acceptable with LGUs at the boundaries of Metro Manila’s urban crawl is something that bears watching.

Pilot project

Towards the end of 2022, DHSUD showcased the groundbreaking of an 11-hectare township project in Barangay Atate in Palayan City, Nueva Ecija, of which 11,000 housing units of a planned 44 towers will be built in three phases under the DHSUD’s Pambansang Pabahay Para sa Pilipino Program.

The township is considered a pilot project of DHSUD for Central Luzon, which perhaps is a reason why this remote barrio located in a 5th class component city with a population that marks it as one of the most sparsely populated in the Philippines, was chosen.

Still, the press release that accompanied the lowering of the time capsule talked about replicating the township’s master plan in Bataan, Bulacan, Aurora, and Zambales, which subsequently kindled interest by the respective governors of the provinces.

Critical, of course, to this housing program will be the approval by the DBM of interest subsidies to make the housing units more affordable. According to the DHSUD, if things go as planned, the housing units will carry only a monthly amortization of P3,500 payable within 30 years.

The President, as well as House Speaker no less were the very important guests during the groundbreaking event. How this will bear on the future of the low-cost housing program can be summed up in a word: abangan!

Source: Philstar