Professional Documents
Culture Documents
HUDCC OverallReport HP2004 02
HUDCC OverallReport HP2004 02
Housing Program
of the Government
Overall Report
Republic of the Philippines
Commission on Audit
MANAGEMENT SERVICES
Commonwealth Avenue, Quezon City, Philippines
Telephone Nos. 931-9235, 931-7455
September 5, 2005
S i r:
Introduction 2
Audit Objective 3
Audit Scope & Methodology 3
Audit Conclusion 4
Management’s Reaction to Audit Observations 5
Introduction 7
Targets 8
Accomplishments 9
Strategies & Reforms 9
Housing Statistics 13
Agencies Implementing the Program 15
Housing Packages 17
Fund Source and Disbursements 17
Introduction 19
The Total Housing Needs for CYs 2001-2004 20
The Reporting System 27
Targets and Accomplishments 28
Organizational Structure 30
Manpower Complement 30
Funding Source 31
Introduction 64
Observation 64
Management’s Comments and Team’s
Rejoinder 68
Introduction 74
Observation 74
Management’s Comments and Team’s
Rejoinder 80
Introduction 85
Observation 85
Management’s Comments and Team’s
Rejoinder 89
Part V Recommendations 93
Part I
Executive Summary
1
EXECUTIVE SUMMARY
INTRODUCTION
In line with this objective, the government adopted five essential strategies in
solving the problem. These consist of making the housing market more
efficient, creating a sustainable housing finance system, accelerating assistance
and provision of security of tenure for informal sector, making housing loans
available and affordable to low salaried members of the formal sector and
strengthening the shelter delivery system, and accelerating the localization of
housing and development efforts.
For CYs 2001 to 2004, the government estimated that the total housing needs
would be 3.624 million units composed of total backlog of 2.073 million and
new household requirements of 1.551 million. The great need for housing is
most felt in the country’s thickly populated regions of the National Capital
Region (1.06 million units), Southern Tagalog (0.6 million units) and Central
Luzon (0.3 million units).
Against a total housing need of 3.624 million units for the four year period, the
housing sector is targeting to accomplish 1.2 million units. This translates to an
annual target of 300,000 shelter security units in the form of a lot, a house or a
house and lot package broken down as follows:
2
EXECUTIVE SUMMARY
AUDIT OBJECTIVE
The audit was conducted to assess the effective implementation of the housing
program in addressing the needs of the homeless taking into consideration the
following:
The audit covered the review of the implementation of the housing program by
the following agencies using CYs 2003 to 2004 data:
The performance of selected key shelter agencies were assessed using the
following audit criteria:
To meet the audit objective, the team performed the following procedures,
among others:
3
EXECUTIVE SUMMARY
The audit was conducted from July 7, 2004 to February 8, 2005 in compliance
with COA MS/TS Office Order No. 2004-023 dated June 10, 2004.
AUDIT CONCLUSION
Of the total estimated housing needs of 3.6 million units, 1.2 million were
targeted to be accomplished during CYs 2001-2004. Out of the total target,
only 892,216 units were reportedly accomplished as of September 2004 due to
weak coordination among the housing agencies. This reported accomplishment
may even be considered bloated as HUDCC failed to establish performance
indicators to accurately measure overall performance as evidenced by double or
triple reporting of a single accomplishment.
4
EXECUTIVE SUMMARY
These conditions adversely affected the ability of the government to address the
housing problems.
As the housing program is one of the priority programs of the government, the
team recommended measures under Part IV of the report to improve the
performance of the housing sector.
The results of the audit were forwarded to the respective heads of HUDCC,
HDMF, NHA and NHMFC on May 26, 2005 for comments. In general,
HUDCC supports some findings and recommendations of the team and
submitted comments on some other concerns which are common to all shelter
agencies. Their comments were incorporated in the report together with the
team’s rejoinder.
5
Part II
6
THE GOVERNMENT’S HOUSING PROGRAM
INTRODUCTION
Housing Need
(source: National Statistics Office)
Records show that over the period 1987 to 2004, out of the total housing needs
of between 2.70 to 3.72 million, the shelter units supplied ranges only from
0.268 to 0.892 million as tabulated below.
* As of September 2004
Source: Sectoral Budget Analyses
7
THE GOVERNMENT’S HOUSING PROGRAM
TARGETS
Against a total housing need of 3.624 million, the housing sector targeted to
provide 1.2 million units or a third of the total need for the period 2001 – 2004.
This target, which translates to 300,000 shelter security units annually and a
funding requirement of P215.16 billion, is broken down into:
Target Agency/Entity
Socialized housing refers to housing programs and projects covering house and
lot or homelots only undertaken by the government or the private sector for the
underprivileged and homeless citizens.
8
THE GOVERNMENT’S HOUSING PROGRAM
ACCOMPLISHMENTS
For CYs 2001-2004*, the HUDCC reported that 74.35% of the targets were
actually accomplished through the consolidated efforts of the following housing
agencies and private developers:
Accomplishments
Target Variance
(2001-2004)*
Agency (2001-2004)*
No. % Quantity %
HUDCC/
600,000 land tenure for
other agencies 236,955 39.49
the urban poor
NHMFC 66,000 11.00
(150,000/year)
NHA 14,083 2.35
Sub-total 317,038 52.84 282,962 47.16
NHA 91,399 32.64
HDMF 280,000 socialized 36,959 13.20
HUDCC housing 69,104 24.68
NGOs 1,150 0.41
Sub-total 198,612 70.93 81,388 29.07
HDMF 189,646 59.26
SSS 7,965 2.49
DBP 44,460 13.89
LBP 19,873 6.21
320,000 low-cost housing
GSIS 12,638 3.95
NHA 5,167 1.61
SHDA 70,643 22.08
CREBA 26,174 8.18 ( 56,566) (17.67)
Sub-total 376,566 117.67
Total 1,200,000 892,216 74.35 307,784 25.65
* As of Sept. 2004
9
THE GOVERNMENT’S HOUSING PROGRAM
Imp. Guidelines
Strategies Reforms
Agency Issued
10
THE GOVERNMENT’S HOUSING PROGRAM
Imp. Guidelines
Strategies Reforms
Agency Issued
Accelerating assistance and provision of security of tenure for the informal sector
Give priority to settlers in NHMFC Revised CMP Guidelines increasing loan ceilings; providing Corp. Circular
danger areas, those financing for related expenses in the transfer of title from CMP No. 026
affected by government landowner to community association; liberalizing land dated 8/31/01
projects, and in threat of conversion requirement; and accepting collateral property for
demolition and pursue the on-site projects
regularization of informal Changed and modified CMP Policy increasing loan ceiling, Corp. Circular
settlers occupying public modifying off-site projects; and defining occupancy status CMP No. 030
lands through community- issued of on-te projects. dated 9/10/03
led-self-help approaches HLURB Exempted on-site housing projects of non-governmental and Resolution No.
under various government Non-Profit Organizations and Foundations Engaged in 768 dated
programs; and Community Development for the Homeless Sector from the 6/16/04
Licensing Requirements of the HLURB
NHA Revised guidelines for the utilization of the Local Housing Memo. Circular
Fund for CBTAP Assistance Proposals No. 1718
dated 8/31/01
11
THE GOVERNMENT’S HOUSING PROGRAM
Imp. Guidelines
Strategies Reforms
Agency Issued
NHA Issued policy guidelines on the grant of resettlement assistance Memo. Circular
No. 1781 dated
2/3/03
HUDCC Curtailed the proliferation of professional and squatting E.O. No. 153
syndicates effective Dec. 10, 2002. dated 12/10/02
Enhance targeting of HDMF Leased to qualified Pag-IBIG members housing units acquired Circular No.
beneficiaries for more by Pag-IBIG with Option to Purchase by the time they become 177-B dated
equitable distribution of eligible for housing loan through its Rent-To-Own Program. March 25, 2004
housing assistance and
provide rental housing
options for the poor.
Making housing loan available and affordable to low-salaried member of the formal sector
Pursue the development of HDMF Reduced interest rates for the retail-lending program, effective Circular Nos.
sectoral and institutional Oct. 16, 2002 resulting in lower monthly amortization. New 189-B dated
housing projects, such as interest rate structure follow: 10/30/02 and
PNP and AFP Housing 189-C dated
Program, Teachers’ Loan Amount Interest Rate 7/20/04
Housing Program, OFW
and Workers’ Housing P 150,000 and below 6% (from 9%)
Program, Cooperatives’ Over P 150,000 –
Housing Program, LGU P 225,000 9%
Housing Program, Over P 225,000 – 10% (from
Corporate Housing P 500,000 12%)
Program and National Over P 500,000 –
Government Housing P 2,000,000 12%
Program; and
Eliminated the twenty four (24) month residency requirements Circular No.
under the Pag-IBIG program by allowing lump sum payment 189-B dated
equivalent to twenty four (24) monthly contributions. 10/ 30/02
Extended loan term from twenty five (25) years to thirty (30) Circular Nos.
years effective Nov. 9, 2001 to further lower the required 189, 189-A,B
monthly amortization. and C.
Reduced the loan administration fee from five percent (5%) of Circular No.
loan value to a fixed fee of only three thousand pesos (P 182-B dated
3,000.00) effective Aug. 23, 2004. 8/23/04
Reduced monthly contributions of Pag-IBIG Overseas Program Circular
(POP) members from $20 to $5 US dollars effective Feb. 28, Nos..98-C
2004 and extending loan term from five (5) to twenty (20) years dated 2/28/04
effective July 20, 2004. and 189-C
dated 7/20/04
NHA Issued guidelines for disposition of completed projects under Memo. Circ.
the Medium-Rise Housing Program. No. 1809
dated 5/9/03
Institutionalizing salary HDMF Requiring loan payment, whenever feasible, through salary HDMF Circular
deduction scheme for deduction. Nos. 189-A, B
government and private & C.
sector employees where
borrowers will be entitled
to a reduced interest rates.
Strengthening the Shelter Delivery System and accelerating the localization of housing and development efforts
Pursue the creation of the HUDCC Worked with Congress in coming up with a Draft Bill for the
Department of Housing creation of the DHUD.
and Urban Development
(DHUD); and
12
THE GOVERNMENT’S HOUSING PROGRAM
Imp. Guidelines
Strategies Reforms
Agency Issued
Provide capacity building HLURB 1. Assisted 173 LGUs in CY 2003 in formulating, revising or
and technical assistance to updating their CLUP and Zoning Ordinance (ZO); and
LGUs especially in 2. Monitored the status of approval of completed plan of 606
preparing and updating LGUs.
their Comprehensive Land
Use Plans
HOUSING STATISTICS
• The NSO Survey also showed that about 53% of household population
owned or amortized the units being occupied. The rest are under various
categories as illustrated on the next page.
13
THE GOVERNMENT’S HOUSING PROGRAM
Not Reported
Occupied for Free Without 3%
Not categorized
Consent of the Owner
Occupied for Free with
3%
Consent of the Owner 3%
27%
Occupied Household
Type of Bldg. & Region Housing Units Households Population
¾ Majority of the housing units only need minor repair or no repair at all
• Overall, survey revealed that about 68% of the total households are still in
good condition with minor repairs needed as presented below:
Under
Construct ion
1.82%
• The survey also showed that most households are relatively new. Of the 15
million occupied housing units, 30.27% were built between 1996 to 2000,
22.38% between 1991 to 1995, and 21.20% between 1981 to 1990.
14
THE GOVERNMENT’S HOUSING PROGRAM
¾ Housing units had a floor area ranging from less than 20 to over 120
square meters or a median of 24 sq. m. as presented in the graph
below:
25
P 20
23.45
E
15 18.78
R
C 17.52
16.56
E 10
N 8.15
T 5
4.45 5.13
3.21
0
<10 10-19 20-29 30-49 50-69 70-89 90-119 120+
15
THE GOVERNMENT’S HOUSING PROGRAM
HUDCC
(Planning, Coordination & Monitoring)
H N S G P H N L P G P H
L H S S B D H G S K D G
U M S I M A U / C
R F S F H
B C H
A D C P C M D G R R L
m e M E
S L S M
C F H D L e s S T U R a
o v P R L A t n
r A H
B P D a P d
t L i
o l T
S a e
u n n
p u
p r
e
Formal
Beneficiaries
Informal
Legend: Legend:
HLURB – Housing and Land Urban Regulatory Board CMP – Community Mortgage Program
NHMFC – National Home Mortgage Finance Corporation PC – Pag-Ibig City
SSS – Social Security System CF – Credit Facility
GSIS – Government Service Insurance System MHRB – Medium-High Rise Condominium Building
PB – Private Banks DDLP – Direct Developmental Loan Program
HDMF – Home Development Mutual Fund GLAD – Group Land Acquisition and Development
NHA – National Housing Authority RES – Resettlement
LGU – Local Government Unit SS – Sites and Services
PS – Private Sector LTAP – Land Tenurial Assistance Program
GK/HH – Gawad Kalinga/Habitat for Humanity SU – Slum Upgrading
PD – Private Developer MRH – Medium Rise Housing
HGC – Home Guaranty Corporation
16
THE GOVERNMENT’S HOUSING PROGRAM
HOUSING PACKAGES
Under HUDCC Memorandum Circular No. 02 dated October 21, 2002, there
are three housing packages with the following loan ceilings:
Under the government’s shelter finance delivery system, funds for housing
projects are provided by the National Government (NG) and the five
government financial institutions (GFIs), namely: the HDMF, GSIS, SSS, LBP
and DBP. For CY 2003, the national government allocated P6.2B of which
only P3.089B was disbursed while GFIs allocated P41.628B of which P23.83
was disbursed.
25
20
(in Millions)
15
10
0
NHA NHMFC HDMF GSIS SSS LBP DBP
Allocation Disburseent
17
Part III
The HUDCC
18
THE HUDCC
INTRODUCTION
HUDCC was created under Executive Order (E.O.) No. 90 issued on December
17, 1986 as an agency under the immediate control and supervision of the
Office of the President. It was mandated to coordinate the activities of all key
government housing agencies responsible in implementing the National Shelter
Program (NSP) of the government.
Authority Responsibilities
19
THE HUDCC
Authority Responsibilities
HUDCC is responsible in projecting the total housing needs since 1987. It was
then using the United Nations (UN) Component Method prescribed in the
UNFPA-NCSO Population Research Project entitled “Projections of Housing
20
THE HUDCC
Needs by Region and Province: 1970-2000” as the basis for assessing the
housing needs for calendar years 1987 – 1992. In 1993, HUDCC shifted to the
UN Shelter Method in calculating the housing needs.
Using the 1990 Census of Population and Housing (CPH) of the National
Statistics Office (NSO) and CY 2000 projection of the total households,
HUDCC computed the total housing needs for the period 2001 – 2004 applying
the UN Shelter Method as follows:
Where:
21
THE HUDCC
Under this formula, it was estimated that the total housing needs for CYs 2001
– 2004 would be 3,623,630 composed of the housing backlog of 2,072,830 and
new households of 1,550,800.
Housing backlog is the number of dwelling units needed at the beginning of the
planning period, 2001–2004, due to doubled-up households, displaced units,
upgrading needs and homeless households. The housing backlog of 2,072,830
for CYs 2001 – 2004 was derived by summing up the following:
Annual
Region Doubled- Displaced Upgrading Homeless Total Ave.
up Units (4-year)
22
THE HUDCC
1990 2000
Ratio of Households
to Occupied Unit Occupied
Housing Units Sharers Housing Unit Doubled-
Region Urban Rural Urban Rural Urban Rural Total up
23
THE HUDCC
NCR 716,165
CAR 22,418
I 6,495
II 2,773
III 54,360
IV 179,109
V 10,076
VI 38,195
VII 47,311
VIII 12,611
IX 24,477
X 40,817
XI 39,126
XII 16,305
ARMM 3,619
CARAGA 32,525
Total 1,255,382
Households Homeless
Region Urban Rural Total Urban Rural Total
24
THE HUDCC
Households Homeless
Region Urban Rural Total Urban Rural Total
25
THE HUDCC
2001 406,777
2002 371,168
2003 381,239
2004 391,616
Total 1,550,800
New Households
HH
Region Size 2001 2002 2003 2004
26
THE HUDCC
• Accomplishment report on the Mt. Pinatubo Resettlement and the NGC East-West
Project (“on need basis”)
• Summary of Signed Presidential Issuances (monthly)
27
THE HUDCC
28
THE HUDCC
29
THE HUDCC
ORGANIZATIONAL STRUCTURE
HUDCC
Office of the
Chairperson Office of the Vice
Chairman
Document
Tracking
Legal Group
30
THE HUDCC
MANPOWER COMPLEMENT
Office Manpower
HUDCC Plantilla 79
NGC Plantilla 24
Contractual 15
Total 118
FUNDING SOURCE
The funds for HUDCC’s programs and projects are provided by the national
government. The total funds released for CY 2003 amounting to P 50,661,419
are summarized as follows:
A. Programs
31
Part IV
Audit Observations
32
Chapter 1
33
SOUND SHELTER PLANNING AND COORDINATION
INTRODUCTION
The team noted that HUDCC set the target without proper coordination with the
implementing agencies resulting in its failure to meet the targeted
accomplishment.
OBSERVATIONS
As discussed earlier, HUDCC reported on year 2000 that for the period
2001 – 2004, the total housing need would be 3,623,830 or an average of
905,957 annually. While the needs were already determined, HUDCC has
not prepared a comprehensive plan to address this concern. Moreover,
HUDCC targeted to provide 1.2 million units or a third of the total need for
the period 2001 – 2004 without coordinating with the implementing
agencies. There were no documents forwarded to the team showing the
derivation of the 1.2M commitment and the list of agencies and private
sector committed to deliver the same.
34
SOUND SHELTER PLANNING AND COORDINATION
Also, in the said plan, the housing It is true that the target of 1.2 million,
sector’s targets, policy direction and policy direction and strategies were
strategies were defined and as shown in defined in the MTPDP. There was,
Table 12.4 (Target Households, 2001- however, no explanation how 1.2
35
SOUND SHELTER PLANNING AND COORDINATION
2004) sources of data were identified million was arrived at considering that
for the targets and the attendant funding the housing backlog alone was already
requirement. The formulation of the computed to be more than 2 million.
Medium Term Philippine Development
Plan was accomplished through a
Technical Working Group comprised
of representatives from the shelter
agencies and the private sector.
For purposes of planning and While the target may have been
coordination, said targets have been communicated with the shelter
communicated to the NHMFC in a agencies, there were no documents to
series of meetings with HUDCC and show that these agencies’ commitment
the other shelter agencies during the were sufficient to meet the housing
Plan preparation. sector’s overall target of 1.2 million. As
discussed in the report, the overall
accomplishment of only 892,216 units
equivalent to 74.35% of the target can
even be considered bloated.
In addition, in the audit report, two The team was not able to cover these
shelter agencies were not included in agencies due to limited manpower.
the audit of the implementation of the
housing program, the Housing and
Land Use Regulatory Board and the
Home Guaranty Corporation.
36
SOUND SHELTER PLANNING AND COORDINATION
Of the total target of 1.2 million units, only 892,216 units equivalent to
74.35% were reportedly accomplished as of September 2004. This
unsatisfactory performance was affected by the failure of the implementing
agencies to adequately plan their activities.
37
SOUND SHELTER PLANNING AND COORDINATION
The 1.2 M housing sector target was The team recognized that the 1.2 M
intended to be achieved by a collective target is a sectoral target intended to be
effort of government agencies and achieved through collective efforts of
private entities. These are the HUDCC, the housing agencies. As there was no
NHMFC, NHA, HDMF, Landbank, individual commitment from the
GSIS, SSS, and DBP on the housing agencies that would account
government side and the Subdivision for the 1.2 million, each agency’s
and Housing Developers Assn., Inc., accomplishment is crucial in attaining
(SHDA) and the Chamber of Real the overall sectoral target.
Estate Builders Assn., Inc., and other
organizations from the private sector. As discussed earlier, only 74.35% of
Individual agency targets were the sectoral target was accomplished.
determined on the basis of their It maybe noted that these agencies did
respective programs, the nature of their not also attain their respective targets as
inputs (e.g., financing, housing tabulated below:
development, proclamation of sites for
social housing, or technical assistance Year Target Accomplishment
to community associations) and their NHA
2001 39,574 27,350
projected level of resources. The 2002 34,436 22,683
magnitude of the targets or the 2003 48,909 16,132
contribution of each agency or entity 2004 34,238 21,136
relative to the sectoral target would Total 157,157 87,301
NHMFC
therefore be appropriately viewed on
2001 67,855 9,457
this basis. 2002 10,000 12,331
2003 18,000 14,026
2004 10,000 14,137
Total 105,855 49,951
HDMF
2001 51,680 25,947
2002 45,219 35,969
2003 56,250 46,499
2004 53,282 56,550
Total 206,431 164,965
On the observations relative to NHA’s The team is not questioning the NHA’s
accomplishment under the prioritization of its programs but its
Resettlement Program it should be practice of targeting only 2 to 60% of
noted that the targets under said the total affected families for
program during the 2001-2004 period relocation. With minimal percentage
38
SOUND SHELTER PLANNING AND COORDINATION
Team’s Rejoinder
Management’s Response
Planning or defining annual or multi- The team agrees that proper and
year targets particularly for major adequate coordination among agencies
resettlement projects supporting major under the housing sector is crucial in
infrastructure projects such as the the attainment of its targets.
Northrail and Southrail development
projects is a multi-agency concern. It is
recognized that planning or targeting
for large-scale projects should be
closely coordinated with the agencies
concerned to attain consistency of
targets with implementation and
funding priorities and to ensure the
accomplishment of targets.
39
Chapter 2
40
AFFORDABLE HOUSING UNITS
INTRODUCTION
Poor or marginalized sector – who cannot afford to pay for any type of housing
Low income sector – with low affordability but who can pay, given the
right package and some measure of financial
assistance
Middle/high income sector – who can afford to borrow at market rates
The audit, however, disclosed that the pricing scheme offered by NHA of
P679.40 to P2,130 were not affordable even to the lowest 30% income earner it
intends to serve.
OBSERVATION
The NHA’s prescribed floor prices for the socialized housing projects
were not affordable even to the lowest 30% urban income earners it
intends to serve under Executive Order No. 90. This contributed in
NHA’s arrears ranging from three months to five years amounting to
P1,929,509, low collection efficiency of 11.66% and a number of
unawarded and idle units in several projects. This condition not only
wasted government’s resources but defeats the very purpose and
objective of the government’s housing program.
41
AFFORDABLE HOUSING UNITS
Under Executive Order No. 90, NHA is mandated, as the sole government
agency engaged in direct shelter production, to focus on the provision of
housing assistance to the lowest 30 percent of urban income earners.
As disclosed in the NSO statistics report, families belonging to the low and
middle/high income sector allocate only about 14% of their income for housing
amortization or rental. Substantial percentage of the family income is spent for
food and other expenses as reflected in the expenditure pattern chart:
Recreation Others
0.5% 18.4% Food at home 38.7%
The said report also showed that the lowest 30% population was earning an
average annual income of P8,026 to P55,001. Considering the expenditure
pattern of 14% for dwelling unit, these families can only afford to amortize
about P95 to P650 a month as tabulated below:
42
AFFORDABLE HOUSING UNITS
The team, however, noted that the projects developed by the NHA require
monthly amortization of P629.40 to P2,130. These then were not affordable to
the intended beneficiaries. The only affordable project was a resettlement
project in Bagong Silang, Caloocan City which is available only to original
tenants at P50 per month.
43
AFFORDABLE HOUSING UNITS
Projects Prices
Resettlement Project
Social Lot P841 per sq. m.
Economic Lots
Lots fronting roadways P1,015 per sq. m.
Corner lots P1,117 per sq. m
P50 per month or a total selling price of P50,000 for
original tenants of Bagong Silang
Prime Lots
Inner
Year Lots A B
44
AFFORDABLE HOUSING UNITS
This contributed not only in accumulation of arrears ranging from three months
to five years amounting to P1.929 billion and low collection efficiency of
11.66% but also unawarded and unoccupied units in several projects tabulated
below.
Awarded
Total No. of Waived Difference Unawarded units
Units No. Accounts (b–c) (a–d)
MRH (a) (b) (c ) (d) (e)
Under this condition, government resources are not only wasted but the very
purpose and objective of the government housing program was defeated.
Response by NHA
45
AFFORDABLE HOUSING UNITS
The second intended for “illegal The team agrees that for “illegal
occupants” or those who are not the occupants”, separate pricing scheme
intended beneficiaries of the project. should be formulated. Even then, the
Given the nature of their occupancy of scheme should also consider the
the units, relative to that of bonafide affordability level status of the
awardees, and for purposes of beneficiaries. This is oftentimes the very
legalizing the same, pricing is based reason of beneficiaries’ resistance to pay.
on total project cost for social lots and
on current fair market value for
economic and residential lots. The
Bagong Silang example given in the
audit report exemplifies this pricing
scheme.
Pricing for new resettlement sites. The team does not have yet pricing
Prices of units (services lots or house scheme for these projects. Hence, we
and lot packages) are subsidized where could not assess whether the rates are
certain project costs such as the cost of affordable or not.
community facilities and relocation
costs are not recovered from
beneficiaries. Payment terms have
been liberalized with low starting lease
rates under an escalating payment
46
AFFORDABLE HOUSING UNITS
Instead of availing of the lease with As discussed earlier, the price of P629.40
option to purchase scheme, to P909.27 could no longer be considered
beneficiaries may avail of either the affordable to the lowest 30% wage
buyer’s financing facility of the Pag- earners based on the NSO Survey.
ibig Fund or enter into a Conditional NHA’s records show that out of 6,432
Contract To Sell with NHA. This allocated residential units, 1,685
scheme is exemplified in the monthly remained undisposed while 655 were
amortization for the Towerville still unallocated as of Oct. 2004.
Resettlement Project cited in the Audit
Report.
Medium Rise Housing Projects. The As tabulated in the report, 1,705 of these
implementation of the Medium Rise units remained unawarded which may be
Housing Program by the NHA was due among others, to affordability level
mandated under Republic Act 7835 or of intended beneficiaries.
the Comprehensive and Integrated
Shelter Financing Act and is funded
mainly out of (cost recoverable) Trust
Funds provided by the national
government. This is intended to be a
demonstration program to introduce
the market to density housing in
highly urbanized areas which
maximizes the use of scarce and
relatively high-cost urban land. It is
also intended to address the need for
additional housing stock in high
density areas such as Metro Manila
and other key areas in other regions.
47
AFFORDABLE HOUSING UNITS
The audit report observed that projects The team was not provided with the
developed by NHA are not within the source data on average income
affordability level of the within Metro Manila. With the given
intended beneficiaries based on the income and considering the results of
2000 Family Income and Expenditures NSO’s survey that only about 14% of the
Survey of the National Statistics total income is allocated for housing,
Office. It is observed however that the these beneficiaries could only afford an
income distribution for the entire amortization payment of only P181 to
Philippines was used where the P1,454. The prices then of the medium
resulting affordability level ranges rise buildings which is available in Metro
from P95 to P650. Applying the Manila at P750 to P2,130 are still not
income distribution for the National within the reach of the marginalized and
Capital Region, where the projects underprivileged members of our society.
cited in the audit report are mostly
located (or where the beneficiaries
originate) shows that the average
monthly income of families belonging
to the lowest 30% range from P1,298
to P10,387 with corresponding
affordability level ranging from P290
to P2,327 per month. This matches
the lease rates or monthly
amortizations for the socialized
housing units in NHA’s projects.
Considering the eroded financial The team considers this move beneficial
capabilities of its target clientele, NHA to the clients of NHA, and would surely
has pursued certain policy reforms to ease contribute in easing the housing problem.
the financial burden on its beneficiaries
such as the lowering of interest rates and
extension of repayment period. These
apply not only to new awardees but also
to existing awardees. NHA is also
proposing to apply the lease with option
to purchase or escalating payment
schemes used as alternative schemes for
beneficiaries of other programs.
Given the social bias of its mandate and It maybe true that the issue on
programs, NHA should continuously affordability may not be the only reason
48
AFFORDABLE HOUSING UNITS
strive to pursue new schemes and for high arrearages, low collection
approaches to provide more affordable efficiency and unawarded units, but it
housing and make its programs more definitely contributed in the presence of
responsive to the needs of its clients. these conditions.
The issue of affordability however, may
not, by itself, lead to or explain high
arrearages, low collection efficiency or
unawarded units as observed in the report.
49
Chapter 3
50
EFFICIENT COLLECTION OF LOAN AMORTIZATION
INTRODUCTION
In view of limited funds, the government could not set aside adequate budget to
address, at the same time, all housing needs of underprivileged sector of our
society. For this reason, apart from government appropriations, loan recovery
provides liquidity to the housing finance sector.
As a matter of policy, the amount being set aside and actually spent for our
housing needs are required to be repaid by the beneficiaries. This is intended
to address the needs of another beneficiary. Thus, for the housing program to
be successful, it should not only ensure shelter provision for the homeless but
efficient cost recovery as well.
OBSERVATION
Records show that both NHA and NHMFC have not defined or established the
collection efficiency standard that would ensure uninterrupted and satisfactory
51
EFFICIENT COLLECTION OF LOAN AMORTIZATION
performance. On the other hand, the HDMF set collection target of 80% to
100% for individual housing loans and 85% to 90% for institutional loans.
Collection Profile
1,600.000
1,400.000
1,502.385
1,200.000
1,165.941
1,000.000
77.61%
A mo unt
(in millio n) 800.000
600.000
400.000 611.825
CY 2003
52
EFFICIENT COLLECTION OF LOAN AMORTIZATION
CY 2003
On the other hand, the HDMF targeted for CY 2003, a collection efficiency of
80% to 100% for individual housing loans and 85% to 90% for institutional
loans broken down as follows:
Institutional Loan:
• For existing project – 85%
• For projects approved in 2002-2003 – 90%
While targets were set for each category, these targets were apparently not
being monitored. The team could not be provided reports on whether or not
these targets are being achieved.
53
EFFICIENT COLLECTION OF LOAN AMORTIZATION
Analysis of the 255,110 outstanding accounts showed that around 61% can be
considered current while a significant percentage is between 1 to 3 years in
arrears as tabulated below:
The team further noted that of the 255,110 outstanding accounts, 6,500
accounts have no single amortization payment since take-out:
54
EFFICIENT COLLECTION OF LOAN AMORTIZATION
55
EFFICIENT COLLECTION OF LOAN AMORTIZATION
NHMFC ¾ Beneficiary does not know whom to pay since there are two
sets of officers.
¾ Beneficiaries stopped paying since the lot is being claimed by
another.
¾ Beneficiary suspended payment since the lot size is not
commensurate with the monthly amortization payment.
¾ The units were occupied by persons other than the NHMFC’s
registered beneficiaries and sometimes being
paid by another person.
¾ Beneficiaries sold their rights to third party. This is particularly
true in the cases noted during inspection at Libis Bulelak
HOA.
• Inadequate information/awareness of the CAs on the CMP
collection system
• Hazard/risk in the project location/area to conduct collection
campaign.
• Unlocated beneficiaries in off-site projects.
• Non-cooperation of Originators and Officers.
NHMFC’s lapses in • Low occupancy rate as in the case of North Triangle HOA:
implementation
¾ Only 158 or 44% of the 360 member-beneficiaries have
occupied the site as of September 2004 which is below the
required 70% occupancy prescribed under Corporate Circular
No. CMP-023. Collection Efficiency Rate of the CA is only
51.06% in June 2004 and 54.24% in October 2004.
¾ Of the 158, only 148 were paying and only 10 have updated
records while 105 beneficiaries were in arrears from about 4
to 13 months.
¾ Of the 202 beneficiaries who are not yet occupying the site,
only 163 are paying, of which only 37 beneficiaries have
updated accounts while 82 beneficiaries are in arrears from
about 4 to 12 months, respectively.
¾ The failure of beneficiaries to immediately occupy the site was
claimed to be due to lack of permanent source of income and
absence of employment opportunity in the area.
• Absence of individual ledgers of beneficiaries.
• Delayed submission by the authorized collecting banks of Mortgage
Bank Receipts/Remittance Reports/Abstract of Collection.
HDMF Problem on awardees • Unemployment – most of the delinquent borrowers are unemployed
and have no other means to pay their housing loan amortizations;
• Financial predicament – the borrowers are the sole breadwinner of
the family and part of their income is use to defray expenses for a
sick family member, education of their children/siblings and other
family needs;
• Death of the principal borrower – beneficiaries have no other means
to continue paying the monthly amortization;
• Some borrowers refused to update their accounts or have stopped
paying their amortization due to their pending case with their
respective developers.
• Unreconciled accounts/delayed remittance of payments made thru
banks/branches;
• Others – abandoned and unoccupied housing units. Borrowers
refused to occupy the units due to defects.
56
EFFICIENT COLLECTION OF LOAN AMORTIZATION
NHA Policy Reforms and Strategies • issued guidelines for revision of pricing policy
for Revenue Generation supported by cost control measures (Memo. Cir.
issued in CY 2003 No. 1805 dated Apr. 29, 2003);
• shift to end-users financing for formal sector
(Memo Cir. No. 1807 dated May 9, 2003); and
• conversion of lease contracts to sale for MRH
formal sector beneficiaries (Memo. Cir. No.
1809 dated May 9, 2003).
Options offered in June 2003 • Extension of Repayment Period;
to Community Associations • Revised Interest Rate;
(CAs) • Resale of Lots; and
• Loan Individualization.
Extends period of availment • Of the total potential availees nationwide of
of penalty condonation under 39,056, only 14,122 or 36.16% actually availed
Board Resolution No. 4665 of this program.
dated 2/27/03.
NHMFC Intensify Collection • Send out demand letters or notices to delinquent
Campaign and Awareness CA’s/MB’s quarterly. There were, however, no
further action taken after the demand letters
were served;
• Apply, if possible, Time Deposit proceeds/Cash
Deposit to CA’s account with CER below 80%.
To a certain extent, the application of CTDs are
not that easy and needs concurrence by the CA
officials;
• Conduct orientation sessions at the NHMFC’s
office with prior notice to the CAs to discuss all
issues;
• Furnish Regional/Zonal Offices with Quarterly
CER report and seek their assistance in
conducting collection campaign in CA’s with
poor CER;
• Request officers/beneficiaries of all taken-out
projects to attend the collection/ledgering
seminar;
• Provide Project Unitization Department with
listing of CA’s with low CER to promote
individualization of TCT. Based on interview,
the Project Unitization Department sent notices
to CAs due for individualization. This, however,
did not improve the status of individualization.
• Refer to the Legal Department/Group CA’s
under Litigation with arrearages of above 24
months amortizations.
57
EFFICIENT COLLECTION OF LOAN AMORTIZATION
Response by HDMF
The primary objective of adopting this As discussed earlier, while HDMF has set
scheme of setting the housing loan collection targets both for individual and
collection target based on the status of institutional housing loans, the attainment
Aging Report as of Dec. 2003 was to of these targets were not at all monitored.
come up with a planning parameter that There were no reports forwarded to the
can be uniformly implemented by all team that would reflect the attainment or
operating units, and at the same time, will non-attainment of the set target. Not even
facilitate validation of their proposed the aging report would reflect the status
targets. The assumption of collection of collection efficiency.
efficiency rate was exclusively to
estimate the projected housing loan
collection based on collectibles from
various account categories. To monitor
collection by category, considering that
movement of accounts across various
ages of accounts over time is erratic,
posed greater difficulties without the aid
of information technology. What is being
monitored, however, is the actual loan
amortizations collected vis-à-vis
collection target that is estimated based
on collection efficiency rate adopted per
category. To monitor the status of
accounts based on age classification is
already captured by the aging report
submitted regularly to Finance Group.
58
EFFICIENT COLLECTION OF LOAN AMORTIZATION
Response by NHMFC
The 80% overall CER for CMP has been As discussed in the report, a number of
the target of NHMFC for the past four factors affected NHMFC’s collection
years but remains unattained. NHMFC performance. Nonetheless, the team
is in the process of reassessing this target acknowledges the efforts being exerted
and realistically, may scale it down to by the NHMFC in its quest to further
78%. improve its performance.
59
EFFICIENT COLLECTION OF LOAN AMORTIZATION
Response by NHA
60
EFFICIENT COLLECTION OF LOAN AMORTIZATION
61
EFFICIENT COLLECTION OF LOAN AMORTIZATION
62
Chapter 4
63
EFFICIENT COLLECTION OF LOAN AMORTIZATION
INTRODUCTION
Housing is considered a basic necessity, the absence of which affects not only
the physical condition of those in need but their emotional and sociological
behavior as well. Thus, further delaying the disposal of already available units
to intended beneficiaries is tantamount to disservice. In line with this principle,
the housing agencies should award available units to qualified beneficiaries on
time or as scheduled.
The audit disclosed that the implementing agencies do not have timeline for the
disposition of generated lots/housing units. In some cases, available units were
distributed only after 55 to 459 days. As of June 2004, there were 66,694
lots/units readily available but were not awarded to the beneficiaries and
another undisposed 19,172 acquired units defeating the very purpose for which
these units were generated.
OBSERVATION
The team noted that while accomplishment was already below the targeted
units, not all units were even disposed of/distributed to the intended
beneficiaries. As of December 2004, it was reported that 85,873 units remained
undisposed of/undistributed while another 19,179 acquired by the implementing
64
EFFICIENT COLLECTION OF LOAN AMORTIZATION
agency for failure of the beneficiary to amortize their loans remained on hand
as tabulated below:
Unawarded/
Implementing
Particulars Undisposed/
Agency
Reacquired
NHA Of the 337,081 total number of units available for distribution as of 66,380
December 2004, 306,701 units were awarded leaving 66,380 units
unawarded.
NHMFC The occupancy status of CMP projects was not monitored. The team
conducted inspection and verification of two CMP projects namely Libis
Bulelak HOA and North Triangle HOA with 675 and 360 beneficiaries,
respectively. Based on the Report of Actual Occupancy prepared by
Marikina Settlement Office as of November 5, 2004, 98 units at Libis
Bulelak were vacant. On the other hand, report of North Triangle HOA 218
showed that 158 units were occupied by beneficiaries as of September
2004. Constructions of housing units by 78 beneficiaries were reportedly
on-going as of that date. Thus, 120 units remained unoccupied by the
beneficiaries.
While the NHMFC deals with the respective associations and not on
individual borrowers, the presence of unoccupied units affects the
collection efficiency of the concerned association.
HDMF There were 26,818 units acquired as of Sept. 2004, of which 19,179 units 19,179
were not yet disposed.
NHA/Home There were three buildings consisting of 96 units intended to address the 96
Guaranty housing problem at the railroad track of which estate management function
Corporation was assumed by HGC in view of call of guarantee in 2002. These
buildings were constructed by New San Jose Builders, Inc. at NHA
properties. Negotiation for the purchase of NHA lot occupied by these 3
buildings is still on-going.
Total 85,873
This condition may have been adversely affected by inadequate policies for
disposing these projects. The guidelines should define, among others, the
following:
In the case of HDMF, the policies for disposal of acquired assets are too strict
for compliance by the intended buyers.
65
EFFICIENT COLLECTION OF LOAN AMORTIZATION
The undisposed units consisting of lots or housing units readily available for
occupancy are located nationwide.
Sample of unawarded projects is presented below:
NHA Projects
Lots/Units
Project Name Generated Unawarded Remarks
Resettlement
Cabuyao 7,000 6,939 Intended for residents of South Rail.
Local officials resist transfer of
beneficiaries.
Sites and Services
Calauan 5,112 3,964 Intended for formal sector particularly
Housing LGU employees of the Municipalities of
Los Baños, Bay, Calauan, Victoria &
Pila.
965 Intended for informal settlers residing
along creeks/esteros and waterways.
Paliparan 4,288 4,251 No data
Medium-Rise Buildings
Camarin MRH 180 180 Completed on September 10, 2003 but
remained unawarded due to the absence
of a policy on disposition.
66
EFFICIENT COLLECTION OF LOAN AMORTIZATION
Lots/Units
Project Name Generated Unawarded Remarks
Malaria 1,2, & 3 480 56 Units are either used as laundry area or
MRH storage of neighbors.
unawarded units
Malaria MRH
Libis Bulelak HOA – vacant lot 1 Libis Bulelak HOA – vacant lot 2
67
EFFICIENT COLLECTION OF LOAN AMORTIZATION
The failure of these agencies to dispose available units defeats the very purpose
for which these units were generated and wasted limited government resources.
In addition, delay in disposition deprived the government an opportunity to
recover its cost thru rental payments while incurring additional cost to secure
these properties from illegal occupants.
Response by HDMF
The non-payment of housing loan The team recognized the HDMF’s role in
amortizations of Pag-IBIG borrowers, providing affordable home financing
despite the Fund’s efforts to collect, left program and its mandate to foreclose
HDMF with no option but to proceed properties of accounts in default. We are
with the foreclosure of accounts in default also aware of the actions taken by the
as a last resort. It is directed for the HDMF in order to dispose foreclosed
immediate recovery of its housing properties. Hence, considering the
investments. To do otherwise, will increasing number of acquired properties
further erode the value of its investments that remained undisposed, the HDMF
and will be facing greater problems in the should revisit its policies and introduce
future. alternative marketing strategies to make
these properties attractive to the buyers.
As a government financial institution, it is
HDMF’s duty to fulfill its social mandate
of providing affordable home financing
program to its members and to sustain
that responsibility through the
conservation and recovery of our
investment.
Reacquired housing units through The team understands the legal process
foreclosure and/or cancellation of the HDMF had to go through to acquire
contract-to-sell (CTS) undergo legal foreclosed properties. However, the
processes before it can be disposed. undisposed units were already acquired
68
EFFICIENT COLLECTION OF LOAN AMORTIZATION
Response by NHA
The general policies for the disposition of The team’s observations were based on
residential units in NHA’s housing the documents provided to the team by
projects are embodied in Memorandum the NHA. It was reflected in the records
Circular No. 1807 dated 9 May 2003 that these units were not awarded.
which defines the intended beneficiaries Likewise, while the team does not
under the various housing programs, the discount the possibility of undocumented
modes of disposition for formal and occupants, NHA’s comments were
informal sector beneficiaries, terms and not supported with schedules or reports
conditions for disposition and sanctions on the housing projects affected by these
for failure to comply with provisions of cases and those with technical and legal
the contract. issues. During the team’s inspection in
some medium rise buildings, the presence
Analysis of the reported 66,380 of unoccupied units were evident.
‘unawarded’ units as of December 2004
based on indicative field data reveal the Nonetheless, the team recognized the
following: efforts being exerted by the NHA and the
innovations introduced to address this
- Almost half (31,500 or 47%) of concern.
‘unawarded’ units are occupied
69
EFFICIENT COLLECTION OF LOAN AMORTIZATION
70
EFFICIENT COLLECTION OF LOAN AMORTIZATION
71
EFFICIENT COLLECTION OF LOAN AMORTIZATION
72
Chapter 5
73
RELIABLE PERFORMANCE INDICATOR
INTRODUCTION
The team noted that the HUDCC could not effectively monitor achievement of
its targets as there were no established criteria to measure performance.
Performance indicators used to report accomplishments vary from year to year
affecting the accuracy of the reported figures and hindering a comparative
analysis of its performance
OBSERVATION
Under Executive Order No. 2 dated May 26, 1993 establishing the National
Shelter Programs/Projects Monitoring System (NSPMS), HUDCC shall
develop and identify the National Shelter Programs performance indicators that
can be used as yardsticks in evaluating individual agency accomplishments.
The monitoring system aims to provide a systematic feedback mechanism on
housing provided by the Shelter Agencies to their clients through a
comprehensive set of performance indicators.
Further evaluation revealed that the guidelines do not include the following:
74
RELIABLE PERFORMANCE INDICATOR
In view of these deficiencies, the shelter and financing agencies and housing
developers were reporting accomplishments using different performance
measures and at time, indicators without any concrete accomplishment. This
then resulted in bloated accomplishments on account of double reporting on
single transaction.
350,000
300,000
311,445
250,000
259,904 251,442
200,000
150,000
100,000
50,000
0
1 2 3
SONA
The key shelter agencies report their accomplishments using the following
indicators:
No. of Beneficiaries
• July – Dec. 2003 7,411
• Jan. – Apr. 2004 4,042
11,453
75
RELIABLE PERFORMANCE INDICATOR
HUDCC NGC West Project 1,461 NGC Housing Project The land titles prepared
Accomplishment Report - would eventually be reported
West as awarded in the next
• No. of Individual Land reporting period and will
Titles Awarded 1,042 again be counted as another
• No. of Individual Land accomplishment when they
Titles Prepared 419 pertain to the same award.
1,461
NHA North and South 4,836 Project Status of 3rd SONA Even units not yet completed
Rail Relocation Commitments were already considered as
accomplishments.
Actual Housing/Lot Units:
- Northrail • Starts 3,536
Dev’t. • Completion 873
- Cooperative 59 • Starts 59
Housing
76
RELIABLE PERFORMANCE INDICATOR
Approved FCL
• No. of Housing units 12,960
(socialized) _____
14,278
HUDCC Mt. Pinatubo 35,370 Accomplishment Report The report already included
Resettlement (April to June 2004) the number of qualified
housing applicants when there
• Not indicated(July ’03 to were no housing units
March ’04) 33,651 awarded yet.
• No. of Qualified Housing
Applicants
1,719
35, 370
Sub-total 64,853
C. 80,000 low-cost housing
HDMF End-user 29,962 Approved Housing Loan The applications in the
Financing Applications, Retail/ pipeline will eventually be
Individual Loans (walk-in reported as approved and
only) again reported under
• No. of Housing units 5,061 approved Institutional Loans
(economic & middle- in the next reporting period.
income)
Approved FCL
• No. of Housing units 24,901
(low-cost)
29,962
• Not indicated (July ’03 to 117 These units may have been
March ’04) part of the reported
• Approved housing loan 62 accomplishments of the
applications developers but financed by
• Release payments on 63 the SSS.
approved applications
• Acquired assets 51 Both approved loan
- public bidding __49 applications and payments
- negotiated sale 342 released on approved loan
were considered in the report
when they both refer to the
same unit.
The units acquired were the
same units reported as
approved units.
77
RELIABLE PERFORMANCE INDICATOR
Developmental Financing:
• Approved projects: These projects will be offered
July – Dec. ‘03 6,000 to individual beneficiaries and
Jan. – Apr. ‘04 - would again be reported
Individual Housing Loans: under the individual housing
• Approved units: loans.
July – Dec. ‘03 30,000
Jan. – Apr. ‘04 27
36,027
NHA NHA Medium- 1,085 Project Status of Third
Rise Housing SONA Commitments
Projects
Actual Housing Units The project reported started
• Starts 905 will again be reported
• Completion 180 completed in the next
1,085 reporting period.
SHDA Housing Units 30,936 Housing Starts for SHDA These projects reported as
Pledge started will again be reported
completed in the next
• Actual housing starts 30,936 reporting period. Moreover,
as of March 31, 2004 the units reported by
developers will be offered to
Individual beneficiaries who
will avail of SSS, GSIS, or
DBP loans and will again be
reported by the lending
institutions under individual
loans approved.
CREBA Housing Units 2,619 Updates on the Housing
Production and
Accomplishment
78
RELIABLE PERFORMANCE INDICATOR
• The reality that a client could be dealing with two or more housing agencies and may
therefore be included twice or thrice in the reports. This is evident on the housing units
reported by the developers who are availing institutional loans from HDMF and
offering such units to SSS, GSIS or HDMF members. Some of these units are also
financed by DBP and other funding institutions which are also submitting
accomplishment reports to HUDCC.
• Both developers and HDMF are reporting these projects as shown below:
Credit Facility
1 1
NCR Drydock Sta. Rosa Brgy. Labas, 492 400
2
South Corp. Garden Sta. Rosa, 360
Villas Laguna
1
NCR RJ Lhinet Lhinet Tanza, Cavite 200 1,001 2
2
South Dev’t. Corp. Homes 700
Tanza
Medium/High-Rise Building
2 2 2
NCR E. Ganzon EGI Taft 2339 Taft Ave., 509 248 100
North Inc. Tower/EGI Malate, Mla.
Taft Buendia
Direct Developmental Loan
1 1
Minda- Makar Prop. Susan/ Gen. Santos 300 416
2 2 *
nao Dev’t. Inc. Susana City 47 49
Homes II
Pag-ibig City
Luzon Ceres Homes Deca Homes Marilao, 76 1 1,518 2
5,390 2
Group Bulacan
• Developers may be members of both CREBA and SHDA and therefore submit reports
to both associations as illustrated below:
No. of Units
Pledge Accomplishment
Name of SHDA CREBA
Sector Developer Project Location SHDA CREBA Completed Completed Under Const.
79
RELIABLE PERFORMANCE INDICATOR
No. of Units
Pledge Accomplishment
Name of SHDA CREBA
Sector Developer Project Location SHDA CREBA Completed Completed Under Const.
-do- -do- Sunnycrest Brgy. Burol 171 171 (2nd) 35 (1st) 72 (2nd)
Royal Dasmariñas, (1st)
Cavite
-do- -do- Chester Brgy. Burol 495 495 (2nd) 8 (1st) 8 (2nd)
Place Dasmariñas, (1st)
Cavite
• The validity of the indicators used by the implementing agencies. As discussed above,
projects just started, approved institutional loans and those in the pipeline were already
reported and considered as accomplishment.
On the other hand, housing loans granted by private banks and other financing
institutions were not monitored by HUDCC and thus were not included in the
overall SONA Report.
The possibility however, that these loan grantees availed units from developers
reporting accomplishments to HUDCC could not be discounted.
Response by HUDCC
The HUDCC in the development of the The team is not questioning the source
80
RELIABLE PERFORMANCE INDICATOR
housing sector accomplishments every of the HUDCC reports but the manner
month has regularly requested by which these reports were
submission of accomplishment reports consolidated. Considering that not all
from GFIs, private developers and to performance indicators used by the
some extent some NGOs like Gawad housing agencies can be considered
Kalinga (when government funds were valid and that single accomplishment is
infused in the projects of GK in 2003- being reported by two or more agencies,
2004). The LGUs housing the sector’s consolidated report then is
accomplishment will be reflected in the bloated.
report of the Pag-IBIG or any housing
agency providing housing support when
they avail of funding from provision of
housing.
Response by HDMF
Internally, HDMF’s established key The team did not question the change of
performance indicators in housing had indicators to conform to existing
been in place since its inception. These conditions. Rather, the use of indicators
indicators are controls that provide without concrete accomplishments yet
information of the organization’s or that would result to double reporting
business concerns and social relevance. such as reporting both individual and
As far as HDMF is concerned, these institutional loans, and approved loans
same indicators are still being used as the and loans in the pipeline when these
basis of evaluating the performance of its may refer to the same subject.
operating units and individual employees
from year to year. However,
performance indicators that measure
HDMF’s fulfillment of its social
mandate, as a government institution, are
determined by HUDCC.
During the briefings conducted earlier to The team did not question the use of
develop a new monitoring system for the different indicators for different reports
President’s SONA initiated by the depending on the purpose for which the
HUDCC and the PMS, it was made clear report will be used. However, using in
that agency accomplishments will be the same report as indicator of
redefined with focus on housing starts. accomplishment both housing units
81
RELIABLE PERFORMANCE INDICATOR
This was necessary as housing starts started and housing units completed
already spur increase in economic would definitely bloat the reported
activities through housing development. accomplishment as these refer to the
This resulted to the adoption by the Fund same subject
of two separate reports to monitor
housing accomplishments to satisfy
different users depending on the purpose
the report was to be used.
The institutional loans and approved While there maybe different fund
FCLs belong to two different financing sourcing for these two types of loans,
facilities of Pag-IBIG – Institutional the fact remains that the reported
Financing for Institutional loans and accomplishment under institutional
End-User Financing for approved FCLs. loans are the same units reported under
As such, financial assistance extended to end-user financing for individual loans.
these programs are being recorded This again resulted in bloated
separately. Funding for institutional accomplishment.
loans pertains to the housing production
involvement of Pag-IBIG under the
Institutional Financing that may be used
primarily to produce housing units, such
as development and construction of
housing units. The FCLs, on the other
hand, refer to commitment of Pag-
IBIG’s End-user Financing for
82
RELIABLE PERFORMANCE INDICATOR
83
RELIABLE PERFORMANCE INDICATOR
84
Chapter 6
85
REASONABLE LAND ACQUISITION AND BANKING
INTRODUCTION
Land is a vital resource in the pursuit of the housing production mandate of the
NHA. To ensure the availability of land resource to meet its production target
and its future requirements, the NHA adopts the policy of a sustained Land
Acquisition and Banking (LAB) Program.
Land Acquisition refers to the act of taking possession of land whether public or
private, under various mode of arrangement. For NHA, this shall mean
acquiring the land needed for the current year’s and the next four years’
production targets. Land Banking, on the other hand, refers to the acquisition
of land in advance of actual need to promote planned development and
socialized housing programs at present value. For purposes of NHA, this shall
mean acquiring land inventory for development after five (5) years and
thereafter.
The audit, however, disclosed that the LAB program was not properly managed
resulting in accumulation of 614 hectares of land as of June 2004.
OBSERVATION
The lots acquired by NHA under its Land Acquisition and Banking
Program were not properly managed and monitored resulting in the
accumulation of land inventory through the years. Of the total 10,882
hectares of land acquired as of June 2004, 614 remained idle and
undeveloped of which 287 were acquired during the period 1995 to
2002. There are also 48 hectares with existing tenancy problems and
could not be developed and used for the intended purpose. This
condition defeats the purpose of land acquisition.
One of the strategies adopted by NHA to ensure the timely delivery of the
needed housing units is to resort to land acquisition and banking program. This
strategy was institutionalized on July 15, 1996 through the issuance of
Memorandum Circular No. 1175 providing the guidelines for land acquisition
and banking.
86
REASONABLE LAND ACQUISITION AND BANKING
As provided therein, land shall be acquired on the basis of the housing needs.
Acquisition of land for future use shall also be allowed based on a sound
projection of the housing needs taking into consideration the following:
It is then clear from the above provisions that the land acquisition and banking
should be based on the Land Inventory for Socialized Housing, the List of
Qualified Beneficiaries prepared by LGUs and Housing Need Projections.
Records, however, showed that apparently, the NHA acquired lots for land
banking without considering the above requirements. Even in the absence of
land inventory for socialized housing generated by the LGUs and the List of
Qualified Beneficiaries, land banking was undertaken. There were likewise no
Master and action plans for LAB program prepared before undertaking land
acquisition activities.
CISFA
55,054,858.68
Main Office
1,184,360,223.09
87
REASONABLE LAND ACQUISITION AND BANKING
The team could not be provided with the breakdown on the area and status
of the lands covered by this amount. The report of the Estate Management
Department showed that the Landholdings for Future Development is
equivalent to 6,144,725 square meters.
No. of
Pro- years Intended
Project Posed Date Area Status since Bene-
Location Acquisition Cost Proj. Acq’d. (sq.m.) as of 06/04 acq. ficiaries
88
REASONABLE LAND ACQUISITION AND BANKING
No. of
Pro- years Intended
Project Posed Date Area Status since Bene-
Location Acquisition Cost Proj. Acq’d. (sq.m.) as of 06/04 acq. ficiaries
89
REASONABLE LAND ACQUISITION AND BANKING
As shown in the tabulation, most of these lands remained idle for 3 to 9 years
without any defined purpose and intended beneficiaries as of June 2004. Even
lands already programmed for development have no defined beneficiaries yet.
There were also 48 hectares acquired with existing tenancy problems and
therefore could not be used until the tenancy issues are resolved.
It may be noted that among the hindrances identified by the NHA for the
development of these land is availability of funds. In view of this reality, the
NHA should not have accumulated substantial quantity of lands and instead
used available funds to develop lands previously acquired. Moreover, these
properties have to be secured entailing additional costs to prevent movement of
illegal occupants.
Inadequate monitoring was also apparent in the case of land located at Dolor
Estate Capitol Hills in Quezon City, where both NHA Main Office and Area
Management Office have no data on its status.
The team also noted that 70% payments for land acquired in Naic, Cavite and
Tuy, Batangas did not comply with the following legal requirements:
The acquisition of land that could not be developed defeats the very purpose of
land acquisition and banking.
NHA as the government’s sole arm for The team appreciates the actions being
housing production, undertakes land taken by NHA to address this concern.
banking in consonance with its multi-year
plan to accomplish its mandate. However,
components of the multi-year plan are
weighed down by a broad mosaic of
problems from legal (a sudden surge of
adverse claims on properties), tenancy
and funding. It will be recalled that the
1997 Asian financial crisis put a stop to a
booming real estate industry,
unfortunately NHA was also affected.
90
REASONABLE LAND ACQUISITION AND BANKING
91
REASONABLE LAND ACQUISITION AND BANKING
92
Part V
Recommendations
93
RECOMMENDATIONS
94
RECOMMENDATIONS
95
Submitted in compliance with MS & TS Office Order No. 2004-023
dated June 10, 2004.