The Department of Human Settlements and Urban Development (DHSUD) has been meeting with more private companies for the construction of more housing projects in the country.
DHSUD Secretary Jose Rizalino Acuzar said the government alone could not afford to address the 6.5 million housing backlog and this is the reason why the department is pushing for joint venture agreement (JVA) and public-private partnership (PPP).
He said he has been meeting with officials and members of the Subdivision and Housing Developers Association (SHDA), Organization of Socialized and Economic Housing Developers of the Philippines (OSHDP), National Real Estate Association, Inc. (NREA) and the Chamber of Real Estate and Builders' Associations Inc. (CREBA).
“The DHSUD’s strong alliance with these private groups strengthens the mobilization of housing construction industry players to help achieve the targeted one million housing units annually in the next six years,” said Acuzar.
He explained that real estate players will take a vital role in addressing the backlog through their resources, field expertise and international linkages.
“These groups and other private organizations we have engaged are absolute multipliers and prime movers in producing affordable and decent homes that most Filipinos dream about,” Acuzar said.
“Our doors are wide open for partnership to all stakeholders, particularly private contractors and developers. The government cannot do it alone, we need to be innovative,” he added.
JVA, PPP
The DHSUD recently released the program's Operations Manual which cites JVA and PPP as among the strategic solutions touted to accelerate the execution of the flagship housing program.
“Through these schemes, private developers and contractors can actively participate in the program,” said Acuzar.
In the manual, DHSUD, as the lead agency and key enabler of the housing program, authorizes three major proponents which include local government units (LGUs) availing of developmental loan from government financial institutions (GFIs), JVA or PPP between LGUs and developers/contractors, and private developers through turnkey projects.
“This is where we need the participation of private contractors and developers. They (private developers) can partner with LGUs through JVA or PPP, subject to existing laws, rules and regulations,” Acuzar said.
To commence the housing construction, the LGU, as project lead, shall be responsible for applying for a development loan from GFIs, subject to applicable laws, government rules and the appropriate GFI requirements.
The guidelines released by DHSUD also states that LGUs may enter into JV agreements or form JV corporations with private sector partners, subject to their respective PPP or JV local codes.
“With the program’s financial structure, LGUs and small to medium developers and contractors will now have access to public and private funds in a form for developmental loans,” Acuzar explained.
He said the DHSUD also allows full participation of real estate developers from conceptualization, design, development and construction, as well as the standards/area specifications and ceiling price should be aligned with the housing units under the program.
Turnkey project scheme
Under turnkey project scheme, partner-developers may offer their completed or allocated housing units to targeted LGUs and their buyer-beneficiaries, according to the released manual.
Contractors and companies with JVA plans on land development and housing construction with LGUs may now start discussing with the Home Development Mutual Fund or Pag-IBIG Fund to secure a developmental loan.
For this, Pag-IBIG Fund has allocated P250 billion for developers and buyer-beneficiaries.
“This will trigger the initial phase of housing construction under 4PH,” said Acuzar.
Acuzar also urged small and medium-sized companies involved in housing construction to consider entry into the 4PH Program through developmental loans.
“With our innovative financial structure and the increasing interest from financial institutions, access to funds has been improved for these low to medium capital developers and contractors,” he said.