Department of Human Settlements and Urban Development (DHSUD) Secretary Jose Rizalino Acuzar earlier submitted the feasibility study and costs involved in issuing sovereign guarantees for state housing projects. The rationale is that such guarantees from the government would encourage state and private banks to lend to the public housing program.
The Cabinet’s economic cluster took up the issue with President Bongbong Marcos. As in any meeting in Malacanang, there were voices of approval and rejection coming from Cabinet members, but in the end, they approved the proposal with the President clearly behind it.
Later, Acuzar said the President has given the green light to tap sovereign guarantees for housing loans.
Sovereign guarantee simply means that if the borrower of the loan defaults in payments, the state will come in to pay the obligation. In other words, funds of the government collected through taxation and other sources, such as investment incomes and even foreign loans, may be used to cover the obligation incurred within the sovereign guarantee arrangement.
Acuzar said the approved sovereign guarantees would be used for the developmental loans of the National Housing Authority (NHA) and Social Housing Financing Corporation (SHFC) to expedite the construction of housing projects under the 4PH and address backlogs in residential units.
About sovereign guarantees, former President Joseph Estrada—for whom I worked as personal secretary when he was mayor of San Juan, Rizal; scriptwriter and assistant director in his movie company; media consultant when he was senator and vice president; Assistant Secretary in his Office of the Press Secretary in the Palace, and City Information Chief in his Manila City Hall when he was mayor again—had always rejected any idea of issuing sovereign guarantees on loans.
On the advice of Secretary Jose T. Pardo, Erap wanted clean and lean financial management under his administration. Most especially, Erap did not want the Filipino people to carry the burden of paying for loans which were squandered through mismanagement by government corporate executives, the scourge of many administrations before and after him did.
Speaking of housing backlogs, the latest figure still stands at 6.5 million units, more or less the same numbers we had during the past Duterte administration. This means two years of the Marcos administration did not make a dent in improving the statistics on the housing backlog. It can also be interpreted thus: the country’s population growth rate is so high that the provision for residential housing necessarily would be left behind.
“This guarantee will be used to speed up the construction because in the past, what we used was private money, and the funds came in very slowly. Since it will be loaned, the only borrower will be the government—the National Housing Authority and the Social Housing Finance Corp. (SHFC). I am optimistic that this guarantee will make the difference in our quest to finally address homelessness in the country,” Acuzar added.
It remains to be seen if Acuzar’s projections are true.
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