Solon says socialized housing price not for poor; DHSUD says it’s due to in-city relocation

MANILA, Philippines — A lawmaker maintained that the government’s socialized housing program is not catered for the poor due to high amortization rates, but the Department of Human Settlements and Urban Development (DHSUD) said this is a result of in-city relocation.

At the House Committee on Appropriations’ deliberations of DHSUD’s proposed budget for 2024, ACT Teachers party-list Rep. France Castro asked Secretary Jerry Acuzar how the P1.5 billion subsidy for poor families trying to buy houses would suffice if the government targets one million homes per year, pegged at around P1.4 million per unit.

“Mr. Chair, we have 6.5 million people who need housing units, and our target is one million per year, right?  For the computation of DHSUD regarding the assistance, I think with the price of housing units, this is not meant for poor people,” Castro said in Filipino.

“If we will divide this by your target of one million housing units per year, you can only give out a P1,500 subsidy for the interest.  So isn’t this so small, and that if you will reach your target, this will only be wishful thinking and a mere dream,” she added.

In response, Acuzar urged the lawmaker not to look at the price of the assistance but the efforts done to keep informal settlers within the city they work in, instead of adopting old practices where people are transferred to areas far from their workplaces and community.

“With the past administration, what they did was off-city housing projects, that’s why the urban poor families were complaining — we held urban poor meetings, and we asked them what they wanted, they said in-city relocation,” the DHSUD chief explained in Filipino.

“But how can we do it in-city when it is expensive?  So we created a compromise as to how they can buy in-city, so subsidy grant with amortization; that’s why I suggest you don’t look at the price; look at the government’s support for the monthly amortization.  If you look at the price, you will really find the costing difficult,” he added.

Acuzar further explained that currently, amortization is rated at around P3,500 to P4,500, noting that it can go further down to P2,000.  This rate would then increase after a period of five years, with the belief that the salaries of workers who availed of socialized housing would increase over time.

“For the first five years, if they graduated, then we will make the amortization rate at P3,000.  After five years, it will increase to P3,500, after five years it would reach P4,000 […] escalation, we escalate it so that funding and financing would match,” he said.

“Banks only want someone to shoulder the prices and how it would be paid.  Because of the formula here, over time, the value of property increases.  Over time, the salaries of people also increase, so that goes hand-in-hand.  The best scenario here is people would have their own possessions,” he added.

But Castro maintained that the current state of minimum wages, P610 for Metro Manila and even lower for rural areas, would not suffice for a P2,000 monthly amortization rate.

“Imagine the salaries of people getting P610 per day, especially in other regions where it’s only P400 and P300,” she said.  “Just the same Mr. Chair, the poor cannot cope with your proposal.”

Affordable socialized housing is an ambition of President Ferdinand Marcos Jr.’s administration, who said he would try to build one million units per year until the end of his term in a bid to address the country’s six million housing shortfall.

READ: Gov’t pledges 1 million homes every year

Marcos’ allies believe such a program is attainable, but it is unclear how low-earning workers would be able to pay off amortization rates, with the latest increase in minimum wages for Metro Manila workers being at P40 per day only.

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