IPP 2014-2016

Economic and Low-Cost Housing (horizontal and vertical) (based on a price ceiling of Php3.0 million and subject to geographical considerations) is among the preferred activities listed in the IPP. This covers the development of economic and low-cost housing and the manufacture of modular housing components.

a. Economic and Low-Cost Housing

The following are the qualifications for registration:

• The selling price of each housing unit shall be more than Php450,000.00 but not exceeding Php3.0 million;
• Minimum of 20 livable dwelling units in a single site or building;
• Must be new or expanding economic/low-cost housing project;
• For vertical housing projects, at least 51% of the total floor area, excluding common facilities and parking areas, must be devoted to housing units.

In cases of un-incorporated joint venture and similar arrangements between landowner and developer wherein the sharing scheme is in terms of the number of lots or units built, only the share of the developer may qualify for registration.

Projects that have already been completed and have incurred sales (booked sales) of housing packages shall not qualify for registration.

Any of the following may be considered as an expansion project:

• Construction of additional floors or annexes intended for housing units;
• If the project will locate adjacent or contiguous to an existing housing project owned by the same entity and shall share common facilities including access to the existing project.

All economic/low-cost housing projects must comply with the following:

• Socialized housing requirement (SHR) by building socialized housing units in an area equivalent to at least 20% of the total registered project area or total BOI registered project cost for horizontal housing and 20% of the total floor area of qualified saleable housing units for vertical housing projects.

This may be done through any of the following modes:

• Development of a new settlement directly undertaken by the registered entity;
• Development of a new settlement through joint venture arrangements with any of the following:
• 1. Local Government Unit,
  2. Affiliate or other related enterprise of the BOI-registered entity,
  3. Developer accredited by the HLURB.

In the case of joint venture projects, the BOI registered entity shall be required to provide proof of funds transferred to the implementing entity.

• Development of a new settlement through donation of land with basic infrastructure facilities (roads, water system, etc.) and/or construction materials intended for the calamity stricken areas as identified in the “Comprehensive Rehabilitation and Recovery Plan of the Areas Battered by Yolanda” in partnership either with any of the housing agencies, relevant LGUs, or with HLURB accredited NGOs.

In lieu of the above modes for compliance with the SHR, vertical housing projects may opt to donate provided: (1) the donation is made to BOI accredited NGO and (2) the amount to be donated shall be equivalent to 30% of (20% of the building construction cost based on the actual number or equivalent total floor area of qualified saleable low cost housing units) or not less than 40% of the estimated ITH. Equivalent total floor area refers to the sum total of the floor area of all the registered low-cost housing units.

• For purposes of ITH availment, compliance with the 20% socialized housing requirement shall be computed based on the actual units sold during the ITH availment period. Failure to submit proof of compliance shall result to forfeiture of ITH for that particular taxable period.

• Non-compliance with the 20% SHR on previous registrations using the ITH-based Compliance (IBC) shall result in denial of applications for registration for succeeding projects.

• Project shall conform with the design standards set forth in the Rules and Regulations to Implement B.P. No. 220/P.D. No. 957 and other related laws.

Eligible projects in NCR, Metro Cebu, and Metro Davao may only be granted three (3) years ITH unless the SHR compliance of the said projects would be undertaken in any of the identified calamity-stricken areas in the “Comprehensive Rehabilitation and Recovery Plan of the Areas Battered by Yolanda”. In such cases, said projects may be eligible to four years of ITH.

Interest income arising from in-house financing shall not be entitled to ITH.

Application for registration must be accompanied by a copy of the Development Permit issued by HLURB or concerned LGU.

Prior to registration, horizontal housing project applicant must submit copies of License to Sell (LTS) and Certificate of Registration (CoR) issued by HLURB. For vertical housing project, applicant may submit a copy of its temporary LTS provided that the copies of the final LTS and CoR shall be submitted prior to start of commercial operation.

b. Modular Housing Components

This covers the manufacture of modular housing components preferably using indigenous materials. These include roof/framing systems, wall/partition systems, flooring systems, door/window systems, and finishing/ceiling systems.

Application for registration must be accompanied by an endorsement from Accreditation of Innovative Technologies for Housing (AITECH).

Social Housing Finance Corporation

Created by virtue of Executive Order No. 272, series of 2004, the Social Housing Finance Corporation (SHFC) is a wholly-owned subsidiary of the National Home Mortgage Finance Corporation (NHMFC) mandated: (a) to undertake social housing programs that will cater to the formal and informal sectors in the low-income bracket; and  (b) to take charge of developing and administering social housing programs, particularly the Community Mortgage Program (CMP) and the Abot-Kaya Pabahay Fund (AKPF) Program (amortization support program and development and financing program).

Pag-IBIG Affordable Housing Program

The Home Mutual Development Fund (HMDF, or Pag-IBIG) offers the Affordable Housing Program (AHP), which is designed for minimum wage earners or whose gross monthly income does not exceed P17,500. Up to P750,000 may be borrowed under this program, with interest rates of 4.5% or 6.5% in the first ten years of the loan, depending on the gross monthly income of the borrower.

The Pag-IBIG AHP housing loan may be used to finance the following:

• Purchase of a fully developed residential lot or adjoining lots not exceeding 1,000 square meters;

• Purchase of a residential house and lot, townhouse, or condominium unit;

• Construction or completion of a residential unit on a lot owned by the member.

Based on computation, a qualified Pag-IBIG member can borrow up to P394,722.32 loan amount under the AHP, with a monthly amortization of P2,000 for the first ten (10) years of the loan. This illustration is under a 4.5% interest rate and 30-year repayment period. The gross monthly income required for this loan amount and interest rate shall not exceed P15,000 for those working in the NCR and for OFWs, and P12,000 for other regions.

Community Mortgage Program (CMP)

The Community Mortgage Program (CMP) aims to improve the living conditions of homeless and underprivileged Filipinos by providing them affordable financing with which they can secure tenure on the land they occupy.

The CMP is a mortgage financing program which assists legally organized associations of residents of blighted or depressed areas to own the lots they occupy, providing them security of tenure and eventually improve their neighborhood and homes to the extent of their affordability.

Abot-Kaya Pabahay Fund Developmental Loan Program (AKPF - DLP)

The Abot-Kaya Pabahay Fund Developmental Loan Program (AKPF – DLP) aims to provide low-income families with affordable housing packages in key Philippines urban areas and other localities with pronounced housing demand. The purpose of the DLP loan assistance is to serve as seed money for the development of property and construction of housing units thereon.

Industry Development Program

The housing industry technical working group (TWG) conducts meetings to discuss and address industry concerns and issues. Among its activities are:

• New Requirements for High-Rise Buildings (Old and New). The requirement of an accelerograph for all high-rise buildings and an Automatic Fire Suppression System (AFSS) to vertical projects is deemed to be in conflict with BP 220, the National Building Code, and Fire Code IRR. The proposed amendment to the IRR of the  Fire Code  and the rationalization of  the installation of accelerograph for buildings have been worked closely with the DILG and DPWH, respectively, in 2014 and these are among the industry’s continuing effort/initiatives in 2015.
• New Category for Socialized Housing. The proposal is to include medium-rise buildings (MRBs) of P550,000 (excluding land) and P840,000 for urban areas. It is under NEDA/HUDCC’s evaluation. Likewise, the proposal to amend R.A. 7279 Section 18 to include the definition of socialized MRB, and the provision for government to make in-city development affordable, is being discussed by the TWG in Congress.
• Reverse Trade Arrangement (RTA). The intention is to have preferential supply arrangements between the housing developers and construction materials manufacturers/associations (e.g. paints, iron & steel, PVC pipes). A Memorandum of Understanding (MOU) was entered into by the SHDA and Pacific Paint (BOYSEN) Philippines, Inc.’s during the HUDCC-SHDA National Developers Convention in September 2014 in Cebu City. DTI-BOI and SHDA is looking into pursuing RTAs or similar partnerships with other paint manufacturers, Cambridge Paints, Inc. and Davies Paints Philippines, Inc.; with ceramic tile producers, Mariwasa and Ten Zen Tiles; and with electrical wires producers who are members of the Philippines Electrical Wire Manufacturers Association.
• Assistance to Yolanda-affected Areas. The guidelines to encourage housing developers to construct their socialized housing compliance projects in the Yolanda Stricken-areas have been finalized and approved by the BOI Board.

Subdivision and Housing Developers Association, Inc. (SHDA)

Board of Investments (BOI)