CEBU CITY, Philippines - The Housing and Urban Development Coordinating Council (HUDCC) is improving the government's socialized housing program by bringing down interest rates of housing loans.

Vice President Noli De Castro, HUDCC chairman, said the program aims to give more Filipinos the chance to have houses of their own.

De Castro said he has ordered the PAG-IBIG Fund, which is one of the key shelter agencies of the HUDCC, to lower their housing loan rates.

De Castro said the PAG-IBIG Fund is reducing to seven percent the interest of housing loans worth P300,000 to P750,000.

He said under the new interest rate, housing loan packages of P500,000 to P750,000 would be reduced from P6,860 to P4,990.

He said the reduced interest rate will cover 23 percent of the middle-income bracket workforce earning P16,000 to P20,000 a month.

This workforce consists of managers, supervisors, college professors and accountant among others.

“We can see a major development here because now, monthly amortization is actually less than what a family pays for monthly rentals. We saw the results of this reform based on the increased housing loan application which Pag-IBIG approves,” De Castro said.

He said from January to July 2007, housing loan releases rose to 20 percent.

He said for the same period, Pag-IBIG already disbursed a total of P10.4 billion worth of housing loans.

Republic Act 7279 or the Urban Development and Housing Act of 1992 stipulates that socialized housing is the “State's primary strategy in addressing homelessness through programs and projects on providing either house and lot packages or home lots only for underprivileged people nationwide.”

Beneficiaries of this law are either individuals or families who do not own homes and whose income or combined household income fall within the poverty threshold as defined by the National Economic and Development Authority.

De Castro, who was the keynote speaker during the national convention of the Chamber of Real Estate and Builders' Association, Inc. (Creba), also urged private developers to continue their support of the government's balanced housing development strategy.

He said they are strict in requiring developers to undertake socialized housing in an area equivalent to at least 20 percent of either total subdivision being developed or total subdivision project cost as provided by RA 7279.

Creba national president Pedro Tario said the group will support the Vice President's target to have a million housing projects by the end of 2010.

But Tario said they need more vacant lots to reach the target especially with the population growth.

He said affordable housing is in demand nowadays with one house costing between P800,000 and P1.5 million.

On their major global market, Tario said 70 percent of these are overseas Filipino workers, Filipinos married to foreigners and expatriates.

“They are our number one clients. They are not multi-millionaires but they have the money to buy houses as they earn between $2,000 and $8,000 a month,” he said.

 [The Philippine Daily Inquirer]