Published on October 4, 2013,

Written by Louella D. Desiderio

MANILA, Philippines – The Subdivision and Housing Developers Association, Inc. (SHDA) is pushing for government subsidy to make housing more affordable under its industry road map.

In a statement, SHDA said it has recommended a comprehensive government housing subsidy under its road map.

“Affordability is a key component of our roadmap. On top of government subsidy, banks have become more aggressive and offer lower interest rates,” SHDA first vice president Ricky Celis said.

“As developers, we have also been pursuing increasing housing production for target segments. All the parties involved are doing their part now, so this is the right time to consider how we can keep things rolling,” he added.

SHDA estimates that the national housing backlog, which now stands at over 3.9 million units, will rise to 6.5 million by 2030 if the problem is not addressed.

Under the road map crafted by SHDA, it wants to eliminate the housing deficit by 2030.

Apart from government subsidy, the group said that housing will be within the reach of average Filipinos if tax perks will continue to be given for mass housing. The developers said home buyers benefit by availing of prices as much as 6.4 percent lower than average, and getting more affordable payment schemes.

Under the Investment Priorities Plan (IPP), mass housing can enjoy tax and non-tax incentives such as income tax holidays by registering with the Board of Investments (BOI).

BOI-registered housing projects must comply with a rule requiring that 20 percent of the total development be apportioned for socialized housing.

While the 20 percent ruling may contribute in socialized housing production, the SHDA said it has also led to some developers to not register with BOI incentive grants.

Among the reasons SHDA noted were the low awareness among developers of the tax holiday for vertical developments, project specifications not aligned with the 51 percent residential floor area requirements per building, and the limited modes of socialized housing compliance allowed by BOI.

SHDA said as incentives will be needed to address the housing backlog, it intends to participate in more industry consultations for the 2014 IPP preparation.

“Our discussions with the BOI were a huge contributor to the development of the roadmap. It allowed us to focus on unmet housing needs and see how government and the private sector can work together to meet these needs,” SHDA president Paul Tanchi said.

The group presented its accomplishments on the roadmap’s first year of implementation in its recent national convention.

In its roadmap, SHDA has recommended implementing a comprehensive government housing subsidy to enhance affordability.

The Department of Trade and Industry, which is currently working on the 2014 IPP, intends to have the list ready within the year so that it can be implemented by January next year.

According to figures from the Housing and Land Use Regulatory Board, the industry has produced 1.88 million housing units from 2003-2012, with 27 percent of these falling under socialized housing.

Jobs generated by the sector over that period number about 513,000.

Projects registered with the BOI, which benefit from an income tax holiday, have a total project cost of P223 billion, 64 percent coming from vertical developments.