President Marcos has called on government financial institutions and the private banks to establish a system that would enable his administration to meet the estimated 6.5 million housing backlog by the end of his term in 2028.
The President made the call as the Department of Human Settlements and Urban Development (DSHUD) sought P1.2 trillion to fund the construction of one million houses every year, or six million in six years.
The Chief Executive on Thursday met with major banking industry players, along with housing Secretary Jose Acuzar, Bangko Sentral ng Pilipinas Gov. Felipe Medalla, and heads of the Bureau of Treasury, the Pag-IBIG, the Government Service Insurance System, the Philippine National Bank, and the Land Bank of the Philippines to tackle the government’s housing program over the next six years.
Representatives of the Banco de Oro, the Metropolitan bank, the Union Bank, the Ayala Corporation, and the China Bank expressed their support for the President’s housing program, saying they will help in crafting the financing system to carry it out.
Marcos said a system is needed to find the country’s cash flow that will support the housing program and provide incentives to private entities that will take part in the project.
The President also acknowledged the support of the private banking sector in his administration.
“I think we can, there should be sufficient incentives… an arrangement for the private banks to come in,” Marcos said.
Acuzar expressed optimism that this can be done by building in-city, mix-use residential hubs to cater to minimum-wage earners and middle-class families.
He said his program would need P36 billion a year for the next six years in cooperation with private lending institutions.
The housing program not only seeks to address the housing backlog, but is also vital in tapping the big economic pump-priming potential of the housing industry, Acuzar said.
He said the department has already identified potential areas for the development of settlements and townships.
The banking institutions wanted to thresh out more details, specifically on how they could help and be paid, he said.
Under the “traditional” housing program, the DHSUD and its attached agencies have asked Congress for P36-billion interest subsidy per annum to address the six million units of backlog in housing production.
“We will come up with pilot projects for the banks to see how the (government) shelter program works and how they could participate,” he added.
“Banks have most of the money. The program is just simple. If you borrow money from the banks, these banks pay the developer. The developer pays the contractor that pays the supplier. The supplier gives back the money to the banks. The banks shall benefit. The money goes around in circle,” he explained.
