P82 billion allocated for pro-poor stimulus package

CLARK FREEPORT – The Housing and Urban Development Coordinating Council (HUDCC) has allocated P82 billion for a pro-poor “stimulus package,” mostly for housing projects.

Vice President Noli de Castro, HUDCC chairman, said 70 percent of the amount will be for housing and the remaining 30 percent for other projects like calamity loans.

The Senate, meanwhile, is set to approve on third reading a bill aimed at strengthening the Home Development Mutual Fund or the Pag-IBIG Fund.

Sen. Edgardo Angara said Senate Bill 2971 or the Pag-IBIG Fund Law of 2008 is calendared for plenary approval today.

“In these times of financial difficulties, by providing a boost to the Pag-IBIG Fund, not only do we help Filipinos better plan and provide for their housing needs, we also reap other economic benefits that go with a strong housing sector,” he said.

Angara said the housing sector plays an important role in providing jobs.

“Remember that for every housing unit, at least eight jobs are created,” he said.

“These domestic employment opportunities, whether from housing construction, public works, mining, micro-finance, small and medium enterprises, agriculture, tourism, etc., will serve our people well in the coming year, when working abroad will start losing its luster, and outsourcing jobs we currently rely on will slowly shrink.”

Angara, who chairs the Senate committee on banks, financial institutions and currencies, said three features of the proposed new Pag-IBIG charter will strengthen the Home Development Mutual Fund, an integrated nationwide provident savings system to provide housing to wage earners.

“The key features are the restoration of tax exemption privilege of the Pag-IBIG Fund (under Republic Act 7742, the fund was exempted from all kind of taxes but the exemption was lifted under Executive Order 93 signed by President Corazon Aquino in 1987); granting of power to the PAG-IBIG board of trustees to set contribution rates; and adoption of a compensation plan for employees comparable to those prevailing in the private sector,” he said.   

For the past seven years, Angara said Pag-IBIG has been receiving tax subsidy from the Department of Finance help it fulfill its mandate of providing shelter.

“In restoring the fund’s exemption from taxes, the Pag-IBIG Fund Law of 2008 recognizes exactly this point – that Pag-IBIG should experience a tax break precisely because these tax payments are better off addressing the shelter shortage,” he said.

“Even the Department of Finance admitted that the tax exemption would enhance the housing agency’s capability to declare its members’ dividends,” Angara said.

“The exemption will allow Pag-IBIG to keep P3 billion that it may lend, enabling borrowers to acquire 40,000 more housing units,” he added.

The Pag-IBIG Fund Law, as a major financial reform, is one of the twin measures the Senate is trying to institute in response to the global economic slowdown.

The other reform is to increase the deposit insurance coverage of the Philippine Deposit Insurance Corp.

Speaking at the launching yesterday of the P60-billion housing project of Xevera Corp. in Pampanga, De Castro called on big corporations like Ayala and Megaworld “to do something like what Xevera did here” and build affordable housing projects.

De Castro said of Xevera’s P60-billion investment, about half was spent for a new municipal building, a church, a school, a public market, a mall, and other buildings. “The housing units were valued at P700,000 and would require about P9,000 monthly,” he said.

“But government employees cannot afford this so interest was brought down from nine to seven percent, thus also bringing down amortization cost to only P4,000 plus,” he added.

De Castro lauded Xevera, headed by businessman Delfin Lee, for building the 60-hectare housing project near the Sacobia River, which used to be a dangerous lahar channel. – Ding Cervantes with Christina Mendez, Philippine Star