Office of the Vice President : Press Release

Refer to: Ms. Dale Zapata 83321148

VP Noli vows strong housing sector will deliver more in 2006

10 March 2006

Record-breaking performances in housing finance and shelter security provision, plus a high level of confidence from banks and private builders made 2005 a banner year for the housing sector, a development which government vows to continue this year.

This was the substance of Vice President Noli “Kabayan” De Castro’s report before a gathering of real estate professionals on Thursday for the 21st Oath Taking Ceremony of the Realty Service Council of the Philippines (RESCOP).

De Castro said that despite economic and political difficulties last year, exceptional performances in key areas proved the housing sector to be stronger and more responsive to the country’s development goals.

“We completed one of the biggest shelter security projects for informal settlers with the relocation of 19,383 families that used to live along the North Rail right-of-way from Kalookan to Malolos, Bulacan. This was accomplished in only ten months, and the families are now living in the in-town, in-city relocation sites known as the Northville Communities,” he said.

He reported that the Northville communities are continuously being improved with the addition of necessary facilities and services through the help of the government and other stakeholders.

The government also established a record in shelter finance for both the formal and informal sectors.

The Community Mortgage Program (CMP) lent a total of P720 million to various urban poor community
associations, “the highest loan assistance granted in the 17-year history of the CMP, which benefited 14,000 families.”

For the formal sector, the Pag-IBIG Fund released a total of P14.39 billion in end-user housing loans, the highest such disbursement in 25 years, even as the Fund posted a record net income of P7.4 billion.

The Vice President also stated that the Home Guaranty Corporation (HGC) has been constantly increasing its guaranty enrollments, averaging P17 billion annually in the last five years from less than P7 billion before 2000.

“This is an indication that HGC has regained the confidence of the banks,” he said.

HGC has also lowered its default rate to only 0.08% from over 10% before 2001, and reduced unpaid calls to only P5.7 billion from P16 billion before 2001.

Last year, the National Home Mortgage Finance Corporation (NHMFC) also completed the first ever sale of non-performing loans by a government corporation.

“Out of this sale, NHMFC remitted P3.3 billion to the Social Security System (SSS) and P460 million the Pag-IBIG Fund,” de Castro revealed.

Efforts to cut red tape in the housing sector resulted in a marked increase in the number of residential
development projects.

“From the 2001 to 2005, the number of registered residential and condominium units grew by an average of 13% per year.” he said.

This year, De Castro vowed that, with the support of all stakeholders, the housing sector will continue to deliver results in four main areas: shelter security, housing finance, support for the housing industry and organizational reforms.

Major developments to be expected include the second phase of North Rail clearing operations up to Pampanga, the start of clearing and relocation of 47,985 informal settlers on the South Rail line from Kalookan-South to Calamba; the flotation of P12 billion zero coupon bonds, wholesale asset disposition by the HGC, securitizing of low-delinquency and current accounts by the NHMFC, and a P22.082 billion funding allocation for housing by the Pag-IBIG Fund.