Gloria Macapagal-Arroyo

President of the Republic of the Philippines 2001 - 2010

Housing and Resettlement


Because shelter is one of the basic survival necessities of human beings, the Government is crucially involved in providing the Filipino people with means for the building or acquisition of homes which they could call their own. This also involves the creation of areas for resettlement of people displaced by natural calamitires or man-made causes (like the decongestion of Metro Manila).

The problem of adequate housing for the people is one of the most serious that the Government has faced. It is a problem that has intensified in the last few years as the number of families needing adequate shelter has dramatically jumped.

The Government is responding in equal measure.

An NHA resettlement site

I. Resettling the Rail Ways Informal Settlers

Covering both the Northrail and Northrail-Southrail Linkage Projects, this is the most massive and by far the most successful relocation and resettlement program the national Government has ever undertaken. The affected individuals and families occupied lands slated for use by the north and south railways. In order to facilitate their relocation and resettlement, the government had to develop a total of 34 resettlement sites in various areas of Metro Manila, Bulacan, Pampanga, Cavite and Laguna.

As of May 2009, a total of 69,752 families had been relocated and resettled.

Displaced families who had opted to return to their respective provinces were given financial assistance instead of housing units in the resettlement sites.

II. Reforming the Pag-IBIG Fund

The Pag-IBIG Fund was created to address two basic concerns: generation of savings among workers and their families and provision of shelter for them. It implemented two broad measures to accomplish these objectives – building homes and encouraging and obliging public and private sector employees and their families to occupy them, and amortize total costs with regular payments with deductions from their salaries, in this way effectively carrying out saving for the long-term interest of their families.

Source: HDMF

In the last nine years, the Government has acted with full resolve in bringing hosing benefits to more and more workers and their families. It has lowered interest rates on housing loans, lengthened the period of amortization, and increased the loanable amount.

The impact of this liberalization of the terms of housing loans was extremely positive: a huge jump in the number of borrowers, in the number of housing units delivered to them, and a tremendous increase in the total amount borrowed.

A. The End-Users' Financing Program

In 2001, a Pag-IBIG member could borrow up to P500,000 at an interest rate of 16 percent per year, payable in 25 years. By 2009, a member could borrow up to P3.0 million at an interest rate of 6 percent per year, payable in 30 years..

The graph provides the necessary information. In 2001, the monthly payment for a P300,000 loan payable in installment over 25 years was P3,159.67; today, for the same borrowed amount, a member may pay only P1,798.65 a month for 30 years. In the circumstances, even minimum wage earners may now afford to buy their own house, instead of renting one. As a result of all these reforms, more and more Filipino workers have become homeowners in the last 9 ½ years

From the data: In 2001, lending totalled P3.8 billion for 16,194 housing units. Eight years later, the Pag-IBIG Fund in 2009 released a total of P45.7 billion for 74,972 housing units – a 12-fold increase in loans and a 4.5-fold jump in housing units delivered—a record difficult to dismiss.

B. The Institutional Financing Program

Aside from providing affordable loans to home buyers, the Pag-IBIG Fund since 2001 has also strongly supported the housing industry by providing an assured source of funding for new housing projects through its institutional loans program. Through this program, more housing developers in the private sector have been able to build new homes and communities in the last nine years. In 2008, the Pag-IBIG Fund released the highest total amount of loans to housing developers at P5.2 billion. This amount funded 97 housing projects located nationwide.

Since 2001, several new institutional loan programs have been introduced, such as the Direct Developmental Loan Program (DDLP), Credit Facility for developers, Pag-IBIG City, Medium/High Rise Building (MHRB), Housing Receivables Financing Facility (HRFF), and House Construction Financing Line (HCFL). All these new programs have given housing developers a wide range of choices for funding their housing projects, thus increasing the inventory of affordable housing units that are available to home buyers. Furthermore, the Pag-IBIG Fund fully decentralized the operations for its institutional loan programs, enabling more private developers in the provinces to access Pag-IBIG support financing.

III. Taking a Comprehensive View

From the facts, it seems clear that tremendous advances have been made in dealing with the country's critical housing problem. In the last 9 ½ years, nearly a million families have benefited from shelter and secure tenure programs; more than 350,000 borrowers have benefited from Pag-IBIG's End-User Financing/Housing Loans; and an additional almost 25,000 families have gained from the housing program delivered through Government Financial Institutes (GFIs) such as the Development Bank of the Philippines (DBP), Land Bank of the Philippines, Social Security System (SSS), and the Government Service and Insurance System (GSIS). And a number of established and emerging house construction companies have graduated to stronger financial viability because of the program.

In sum, the revitalized housing program of the last nine years, in building more homes for more Filipino workers and their families, creating more employment opportunities for our workers, and generating a stronger boost to the private sector home construction industry than in any preceding comparable period, has yielded results of considerable significance to our country.