The Social Housing Finance Corporation (SHFC) was created by virtue of Executive order no. 272 (20 January 2004). The 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).
SHFC Major Programs
As mandated by Executive Order no. 272, SHFC is administering the following programs:
Community Mortgage Program - The CMP is a government-funded program that assists organized informal settlers secure land tenureship. Qualified informal settlers are provided with a loan to finance the acquisition of an undivided tract of land which they are currently occupying or where they are resettled. The maximum amount of loan that qualified informal settlers can apply from the SHFC, depends on the location of the land. For highly urbanized areas, the loan ceiling is Php120, 000.00 per beneficiary/family. Other areas, have a loan ceiling of Php100, 000.00 per beneficiary/family. CMP loan has a maximum of repayment period of 25 years at an interest rate of 6 percent per annum.
Abot-Kaya Pabahay Fund - The AKPF was created by the Republic Act 6846 under trusteeship of the National Home Mortgage Finance Corporation and was amended by Republic Act 7835 to implement a continuing program of social housing and enhance government's efforts to make low-cost housing affordable to low income families. The AKPF has two components: (a) amortization support whereby funds are made available for low income families to assist them in paying their housing loans; and (b) development financing where fund are utilized to support private developers, non-government organizations and landowners in providing affordable housing packages to low-income families.
Aside from the CMP and AKPF, the SHFC is also implementing the Localized Community Mortgage Program (LCMP). The LCMP was approved by the SHFC Board of Directors on 27 July 2007 as a derivative of the CMP that would assist and empower the local government unit (LGU) in achieving their housing programs for the informal sector in their respective areas. Under the LCMP, a qualified partner-LGU may apply for an omnibus commitment line (maximum of P50 million) made available by SHFC to accommodate priority social housing projects identified by the partner-LGU. The partner LGU shall be required to put up 25% (minimum) of the total project cost as counterpart contribution for the project. The counterpart maybe in the form of real estate property owned by the LGU, site development or cash financing.
SHFC Program Performance
CMP Operations - For the period 2005-2007, the CMP was able to assist 39, 804 landless families receive land tenureship. This represented 85% of the target of beneficiaries (families) assisted by the CMP for the said period. (See Table 1). Among the major reasons for the CMP inability to meet its targets, as stated in the 2004-2010 Medium Term Philippine Development Plan (MTPDP), are the inability of community association (CAs) to submit requirements, disputes among members of the CAs, insufficient SHFC human resource complement for the program and the limited amount of financial assistance provided by the National Government.
Table 1. Community Mortgage Performance, 2005-2008
It should be noted that if the CMP'S accomplishments are analyzed based on the actual allocated funding appropriation given by the National Government, the program then has, in fact, surpassed its targets. The total CMP budget for the period 2005-2010 is P5.202 billion and was based on an average cost per beneficiary of P53, 068.09 (as stated in the 2004-2010 MTPDP). Using this average cost as the factor to determine the actual number of beneficiaries per funding appropriation from the National Government, the target number of beneficiaries expected from the program from 2005 to 2007 are 9,422, 18,844 and 9,422 respectively. Given the above mentioned actual number of beneficiaries assisted in the said report, the CMP has surpassed its targets for 2005-2007. (See Table 2).
Source: Social Housing Finance Corporation
For the year 2008, the CMP has already assisted a total of 5,158 beneficiaries (as of May 2008). Given that the Department of Budget and Management has already given the corporation a budgetary allocation of P500 million for 2008, an annual target of 9,422 beneficiaries is therefore adopted by the corporation. Thus, the aforementioned number of beneficiaries assisted by the CMP this year already represents 55% of the annual target.
AKPF Operations. It should be noted that SHFC Board of Directors (BOD) temporarily suspended the utilization of the AKPF for development loan undertakings in 2007. Such action by the Board of Directors was meant to explore the strategy of aligning AKPF to CMP operations, in particular the site development phase. Prior to this suspension, the 2006 (258 units) with loan amount of P40 million and P10 million respectively. As of 31 August 2007, the AKPF has a total of P64.61 million available for development loan and contribution support utilization.
LCMP Implementation. The LCMP was approved for implementation in Jul 2007. To date, the SHFC has conducted briefings on the LCMP to 15 LGUs that have expressed interest in the program. Among the 15 LGUs, the Island Garden City of Samal (IGACOS) and Naga City have completed submission of documentary requirements. In fact, the LGU-IGACOS application has already been endorsed by the SHFC-Credit Committee for approval by the SHFC-BOD in its June 2008 meeting.
Target for 2008-2011 and Expected New Programs:
Given that the SHFC is still awaiting the decision of its Board of Directors on the AKPF utilization, the corporation has committed to achieve an annual target of assisting 9,422 beneficiaries (families) under its CMP for the period 2008-2011. These targets have been submitted and approved by the Housing and Urban Development Coordinating Council for the Updated MTPDP 2008-2010 (See Table 3). It should also be noted that these CMP targets are based on P500 million annual allocation of the government for the CMP program. Moreover, these CMP targets also include the beneficiaries which the LCMP will be assisting for the said period.
Aside from the CMP and the LCMP, the SHFC is also expected to be involved in new housing-related programs of the government in the said period. Among these programs is the Asian Development Bank (ADB) assisted Metro Manila Urban Services Program (MMUSP). The MMUSP intends to utilize the SHFC as the government entity that would administer and manage the funds intended for Metro Manila LGUs to finance urban services concerns of the informal settlers their from respective localities. In fact, a Memorandum of Understanding (MOU) has already been signed by the ADB, SHFC and HUDCC this year finalizing the working arrangements for this project.
Need for More Funds to support Present and Future CMP Operations and Other SHFC Programs
Given the above CMP targets and SHFC corporate developments, the P500 million annual allocation of the government may not be enough to cover their current and future operations. For CMP alone, a total of 264 project application worth 1.9 billion have been received by SHFC as of May 2008. In fact, an analysis of CMP pipeline data (See Table 4) would reveal that a total of P1.7 billion is needed this year to service CMP project funding requirements: P660 million for 138 projects approved to be taken out; P319 million for 121 projects awaiting for final payments; and P978 million for 145 projects which are already in the advance stage of processing.
Table 4. Projects in the Pipeline (As of May 2008)
Source: Social Housing Finance Corporation
Regarding the LCMP, it should be noted that its funding requirements would also be taken from the yearly P500 million allocation of the government to the CMP. There is no separate budget-subsidy for the LCMP.