Housing in the Philippine Economic Agenda by Dep. Dir. Gen. Rolando Tungpalan

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Housing in the Philippine Economic Agenda

ROLANDO G. TUNGPALAN Deputy Director-General, NEDA

22nd SHDA-HUDCC National Developers Convention 26 September 2013


We are on track with respect to our economic targets; the present challenge is to improve social outcome targets.

PDP 2011-2016 Targets

7-8% Gross Domestic Product

22% Investment/GDP ratio

6.8-7.2% Unemployment Rate

Poverty Incidence down to

16.6%

Where are we now?

Unemployment rate 7.0% (2012)

6.8% (2012) 7.6% (SI 2013) Real GDP Growth

20.3% (2012) 20.8% (SI 2013) Fixed Capital as ratio to GDP

7.3% (ave. of LFS’ 2013 Jan, Apr & Jul round)

Underemployment rate 20.0% (2012) 19.8% (ave. Jan, Apr & Jul 2013)

27.9% (S1 2012) 28.6% (S1 2009) Poverty Rate


Recently, the Philippine economy grew robustly. 2012 By Industrial Origin

Agri, Fishery, Forestry and Hunting Industry Of which: Manufacturing Services Gross Domestic Product (GDP) By Expenditure Household Final Consumption Gov’t Final Consumption Capital Formation o.w. Fixed Capital o.w : Public Construction Private Construction Durable Equipment Changes in Inventory Exports Imports Gross Domestic Product (GDP)

Source: NSCB

Share to GDP 11.1 32.0 22.1 56.9

2013 Q2

2013 S1

100.0

Growth Rate 2.8 6.8 5.4 7.6 6.8

Share to GDP 9.4 32.7 21.8 57.9 100.0

Growth Rate (0.3) 10.3 10.3 7.4 7.5

Share to GDP 10.2 33.0 22.6 56.8 100.0

Growth Rate 1.4 10.6 9.9 7.1 7.6

70.4 10.3 18.5 20.3 1.8 6.4 10.0 (1.8) 48.4 47.6 100.0

6.6 12.2 -3.2 10.4 29.8 11.5 8.0 (333.8) 8.9 5.3 6.8

67.0 13.1 17.4 18.9 2.9 5.7 8.6 (1.5) 47.1 45.6 100.0

5.2 17.0 13.2 9.7 31.1 9.0 5.7 19.0 (6.5) (3.0) 7.5

67.7 12.3 18.5 20.8 2.4 6.2 10.2 (2.3) 45.8 45.2 100.0

5.3 15.3 27.3 12.7 36.2 17.4 7.9 41.2 (7.0) (0.7) 7.6


Sound macroeconomic fundamentals supported this remarkable performance. Inflation has been within target since 2010 9.0 8.0

Inflation Inflation Headline Low Target High Target

in percent

7.0 6.0 5.0

4.0 3.0 2.0 2005

2006

* Jan - June 2013 only

Source: Bangko Sentral ng Pilipinas

2007

2008

2009

2010

2011

2012

2013*


Lessons Learned: Midterm Assessment of PDP 2011-2016 • Good governance has proven to be an effective platform upon which strategies should be implemented. • Macroeconomic (fiscal, financial, external) and political stability fuels positive expectations that lead to growth. • Economic growth is necessary but not sufficient for poverty reduction. • Growth strategies need to have spatial and sectoral dimensions to ensure inclusivity. • Disasters can negate the gains and even push back development. 5


Hence we need to do more to attain inclusive growth... Good Governance (Property Rights, Regulatory Efficiency, Alignment of policies) National Security, and Ecological Integrity

INCLUSIVE GROWTH (MASSIVE EMPLOYMENT CREATION, REDUCED POVERTY)

POSITIVE ACTION with Spatial and Sectoral Dimensions (e.g., economic and social programs)

Market demand

Rapid and sustained growth

Science, technology , innovation Education and skill set of the workforce

Infrastructure

jobs

Investments

Boost competitiveness

Improve access to financing

Macroeconomic Stability (fiscal, monetary, external, financial)

6


Guiding Principles in updating the PDP • Efficiency (catalytic; government intervention facilitates and not substitutes for private action) • Equity (broadening opportunities through connectivity, human capital investments) • Feasibility (doable within the Plan period)


The proposed 2014 budget will help us move towards inclusive growth...

• Government budget that – Facilitates massive employment generation – Helps to significantly reduce poverty

• Positive action with – Sectoral dimension – Spatial dimension


We assume that growth will continue in 2013 and beyond 2012 Actual

2013 S1 Actual

2013 Outlook

2014 Target

GDP Growth (%)

6.8

7.6

6.0-7.0

6.5-7.5

Agriculture Growth (%)

2.8

1.4

3.5-4.5

3.2-4.2

Industry Growth (%)

6.8

10.6

6.4-7.5

7.4-8.5

Services Growth (%)

7.6

7.1

6.3-7.3

6.7-7.6

Source: NEDA as approved in the DBCC


Growth Drivers  Strong performance of agri-based manufacturing, and recovery of semiconductor and electronics  Robust public and private construction projects  Buoyant domestic and local tourism  Continued strong growth of wholesale and retail trade  Real estate particularly housing  Greater productivity in agriculture and rebound of the fisheries subsector


We also remain vigilant against the following near-term global and domestic risks to growth...  Possible spike in commodity prices (e.g. petroleum, agricultural products)  Weather disturbances (e.g., El Niño and typhoons)  Delays in the implementation of infrastructure development projects, particularly power  Excessive capital inflows /outflows  Uncertainty in the Euro area  Fiscal risks in US and Japan  Further economic slowdown in BRIC, particularly China


…while taking advantage of opportunities Improvement in the global economic environment Sustained growth in emerging markets Improvement in demographic conditions  Increasing income, continued growth in population, rising middle income class Increased integration of the ASEAN Economic Community  Well integrated ASEAN financial system

More financial resources available Fiscal space Investment grade credit rating *Luncintel, Global Industrial Application Paper Industry 2012-2017: Trend, Profit, and Forecast Analysis


Housing and Real Estate Sector


Real Estate Sector (In Million Pesos) 160,000

146,782

140,000

124,248

120,000 100,000

106,618 91,223

80,000 60,000 40,000 20,000 2009 Source: NSCB

2010

2011

2012


Share of Construction to Economic Output CURRENT PRICES

Construction (in million pesos) Gross Domestic Product (GDP) (in million pesos) Construction Share to GDP (in percent)

2010

2011

2012

551,229.7

520,968.8

618,077.4

9,003,480.0

9,706,267.8

6.1

Impact of 1 peso worth of Construction input to entire economy: 2000 Input-Output 1.99 Source: NSCB

5.4

10,564,886.5 5.9


Priority Sectors PDP 2011-2016 o Agribusiness/Forest-based industries o BPO/IT o Electronics o Housing o Infrastructure o Logistics o Mining o Shipbuilding o Tourism o Other high-growth potential industries (wearables, garments, homestyle products, motor vehicle parts/ components

Agri-business

Infrastructure

Tourism

BPO

Logistics

West Philippine Sea

PDP Midterm Update o Agribusiness/Agriculture o Manufacturing o BPO/IT o Housing o Infrastructure o Logistics o Tourism o Halal food industry


Assessment of Housing Peformance •

National Housing Program provided direct housing assistance to a total of 222,167 households during the period 2011-2012

•

Actual value of housing assistance for 2011-2012 amounted to Php 92 billion with 61 percent benefitting low-

cost housing and 49 percent for socialized housing • Generated about 2 million jobs in housing construction in 2011-2012


Assessment of Housing Performance KEY PROGRAMS

ACTUAL 2011 – 2012 HOUSEHOLDS

Socialized Housing (<Php 400,000) NHA Housing Production SHFC Community Mortgage Program HDMF End-User Financing Low Cost Housing (>Php400,000– Php3 million) HDMF End-User Financing LBP End-User Financing SSS End-User Financing Total Housing Assistance

TARGET HOUSEHOLDS

PHPBILLION

2011 – 2012

Accomplishment Rate (%)

153,696

35.66

253,247

60.69

103,093

25.87

140,000

73.63

25,162

1.53

45,000

55.91

25,441

8.26

68,247

37.27

68,471

56.43

181,753

37.67

67,753 606 112 222,167

55.09 1.20 0.13 92.10

182,376

37.15

435,000

51.07

Source: Housing and Urban Development Coordinating Council


Challenges in Housing Sector • Resource Constraints  Original 1.5 million target reduced to 940,520

• Rapid Urbanization  49% in 2010; 65% by 2030

 Target sectors: Nonformal workers, minimum wage earners, uniformed personnel, Informal settler families (ISFs), Indigenous Peoples (IPs) and formal sector

• NG-LGU Collaboration  Land availability  Resettlement


Funding for the Housing Program (In Million Pesos)

25,000 20,000 15,000 10,000

19,450

22,290

21,832

2012

2013

5,000

3,700

3,830

2009

2010

0 Source: DBM

2011


Strategies for Housing 1.

2.

3.

Target our clientele and financing with better and more responsive services for Pag-Ibig Fund members and the formal sector Identify and develop suitable land for sustainable communities Provide a more coherent and effective approach for the scaling up of socialized housing program through the National Informal Settlements Upgrading Strategy (NISUS)


Housing Policy Agenda • Amendment of Urban Development and Housing Act (UDHA) Section 18 • Review of PD 957 and BP 220 Implementing Rules and Regulations for inclusion of green technology in housing


Housing Targets, 2014-2016 (In households) Agency

2014

2015

2016

Total 2014-2016

NHA

67,291

92,525

80,422

240,238

SHFC

24,000

29,000

34,000

87,000

HDMF

55,516

56,672

57,861

170,049

146,807

178,197

172,283

497,287

Total Direct Housing Provision Source: HUDCC


Housing Sector Public Investment Program Housing

Expected output

Housing Program for ISFs in Danger Areas in Metro Manila (NHA)

89,634 housing units

Building Resilience & Awareness to Natural Disasters & Climate Change (BRACE) Project

1,800 housing units

Sub-Total

91,434 housing units

.

PDP RM Critical Indicators Addressed

Spatial Coverage (Nationwide, Interregional and Region-Specific*)

2013-2016 Investment Targets (In PhP Million)

Percentage of housing targets met

Metro Manila

40,000

Share of socialized housing to housing targets met

Taguig City, Metro Manila

1,914

Metro Manila

41,914


Housing Sector Public Investment Program Housing Resettlement (NHA)

Expected output

128,095 households

Emergency Housing 19,600 households Assistance (NHA)

PDP RM Critical Indicators Addressed

Spatial Coverage (Nationwide, Interregional and Region-Specific*)

Percentage of housing targets met

Nationwide

20,392

Nationwide

4,000

Nationwide

2,688

Share of socialized housing to housing targets met

2013-2016 Investment Targets (In PhP Million)

Settlements Upgrading (NHA)

65,492 households

AFP/PNP Housing (NHA)

80,000 households

Nationwide

23,502

Community Mortgage Program (SHFC)

106,000 households

Nationwide

8,535

Sub-Total Total .

293,187 households 384,621 households

59,117 101,031


MAGNITUDE OF INFORMAL SETTLER FAMILIES IN METRO MANILA (as of July, 2011)

Target for 2012-2016

(48%)

(27%)

(4%) (4%)

TOTAL: 584,425 HHs


27


APPROVED GOVERNMENT ASSISTANCE PERMANENT RESETTLEMENT SITE (by priority)

GOVERNMENT ASSISTANCE HOUSING

FINANCIAL

Php 18,000/family to be provided by DSWD IN-CITY 1. CSO Proposal/ People’s Plans

2- to 4- storey LRBs (max. of P 400,000 per unit) Proposed Mode of Disposition: Ownership of Units (Proposal)

2. In-City LRBs (NHAimplemented)

2- to 5-storey LRBs Proposed Mode of Disposition on the Unit: Lease, Lease Purchase; Sale Usufructory Arrangement on the Lot (Proposal)

OFF-CITY (NHA resettlement sites)

Developed Lot with Rowhouse Disposition: Financing of the H&L by

To serve as rental assistance computed at P1,500 per month for a maximum of one year until such time that their resettlement sites are ready for occupancy

To serve as resettlement subsidy


Our challenges to SHDA



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