Report on the
Providing for the housing needs of the people especially those belonging to the poor sector of the society is a big and challenging task the government has to embrace. Significant effort and resources have been devoted to addressing the housing problems in the country, yet much still remains to be done.
Provision of affordable housing requires government intervention, and the degree of such intervention needs to be defined. This is to ensure a balance in the roles/participation among agencies/sectors involved in the housing program of the government. In the process of meeting the housing needs of the people, the government must also focus on its ultimate objective of eventually empowering the people to enable them to address their own housing needs.
The Medium-Term Philippine Development Plan or the MTPDP for the plan period 2001-2004 reported that the supply of houses has not been increasing and the costs of available housing are unaffordable, especially to low-income families who have no access to credit markets for housing. This matter is exacerbated by a land market that limits reallocation of rights to the most valuable use of land. As a result, informal settlements continue to persist. Past housing programs have enabled non-poor households to have access to the formal housing markets. However, socialized housing is inaccessible to the poor, especially those in the urban areas. The bottom 40 percent of urban households had to resort to informal housing or informal settlements characterized by congestion and very poor living conditions.
Under the MTPDP for the above stated plan period, the housing sector targets the provision of shelter security to 1,200,000 households that translates to a funding requirement of P215.16 billion. The target adopts a 73 percent to 27 percent ratio in favor of socialized housing, principally for the bottom 40 percent of households because of their inability to access the formal housing markets. This will mean providing these households with affordable socialized housing through efficient production of housing units for ownership and sustainable housing finance.
Executive Order (E.O.) No. 90, s.1986 identified the four key agencies for housing as follows: the National Housing Authority (NHA), the National Home Mortgage Finance Corporation (NHMFC), the Human Settlements Regulatory Commission (now called the Housing and Land Use Regulatory Board or HLURB) and the Home Financing Corporation (renamed as the Home Insurance and Guaranty Corporation then as the Home Guarantee Corporation or HGC under Republic Act No. 8763 dated 29 March 2000).
The NHA is mandated as the sole government agency engaged in direct shelter production focused on providing housing assistance to the lowest 30 percent of urban income-earners through slum upgrading, squatter relocation, and development of sites and services and construction of core-housing units.
The NHMFC is the major government home mortgage institution and is tasked to operate a viable home mortgage market, utilizing long-term funds principally provided by the Social Security System, the Government Service Insurance System, and the Home Development Mutual Fund to purchase mortgages originated by both private and public institutions.
The HLURB is the sole regulatory body for housing and land development. It ensures rational land use for the equitable distribution and enjoyment of development benefits.
The HGC mobilizes all necessary resources to broaden the capital base for the effective delivery of housing and other related services, primarily for the low-income earners through a viable system of credit insurance, mortgage guarantee and securitization.
Charged with the main function of coordinating the activities of the government housing agencies to ensure the accomplishment of the National Shelter Program (NSP) of the government is the Housing and Urban Development Coordinating Council or HUDCC.
The NSP is the government's comprehensive strategy to address the country's housing problem. It rests on three basic principles, namely: (1) reliance on the initiative and capability of beneficiaries to solve their housing problem with minimum assistance from the government; (2) the private sector as the principal player in providing decent and affordable housing; and (3) the government as enabler, facilitator and catalyst in the housing market, while focusing assistance to families within the poverty line. (The State of Philippine Housing Programs: A Critical Look at How Philippine Housing Subsidies Work by Llanto and Orbeta, Jr., 2001)
The President of the Philippines, in her State of the Nation Address (SONA) in 2001 promised to give shelter security units to 150,000 urban poor families every year. This figure was reported in the SONA for the year 2002 to have been achieved.
The NHA is a government-owned and controlled corporation created on 31 July 1975 under Presidential Decree (P.D.) No. 757. It is under the Office of the President and shall exist for a period of 50 years but may be extended.
The NHA has the following purposes and objectives:
Its powers and functions are exercised by the Board of Directors in accordance with the established national human settlements plan prepared by the Human Settlements Commission. Among such powers and functions are the following:
As provided under Republic Act (R.A.) No. 7835 otherwise known as the Comprehensive and Integrated Shelter Financing Act of 1994 or simply the CISFA, the NSP has five vital components as follows:
The CMP is a mortgage financing program of the NHMFC which assists legally organized associations of underprivileged and homeless citizens to purchase and develop a tract of land under the concept of community ownership. There are basically four parties involved in the CMP. The NHMFC is the primary implementer, in coordination with all other concerned agencies/entities. The landowner is the person who is willing to sell his property to the beneficiaries at an agreed price and term of payment. The CA, which is composed of the beneficiaries of the loan is the borrower and the mortgagor. The originator is the person to whom the loan and the mortgage shall pass. The originator shall organize, orient, and assist CAs or beneficiaries in securing the loan/financing and enhance their management capabilities. Said originator may either be a government agency, a private person, or a people's organization.
On the other hand, the Resettlement Program involves land acquisition and site development by the NHA to generate serviced homelots for families displaced from sites earmarked for government infrastructure projects, those occupying danger areas such as water ways, esteros, railroad tracks and those qualified for relocation and resettlement assistance under R.A. No. 7279 or the Urban Development and Housing Act of 1992 or the UDHA, in short. The development of resettlement sites shall be undertaken by the NHA, on its own or jointly with LGUs, other governmental agencies and with the private sector.
OVERALL AUDIT OBJECTIVE AND SCOPE
The objective of the audit was to determine whether the management systems and procedures for the:
are adequate and effective and whether these contributed effectively to the attainment of the objective of the government in providing shelter security units to the low-income group.
The audit covered the following:
It was undertaken in six agencies: HUDCC, NHA, NHMFC, HLURB, City of Pasig, and Municipality of Rodriguez, Province of Rizal. Surveys and interviews were also conducted in the Department of Budget and Management, the Bureau of the Treasury, and the National Economic Development Authority to confirm data/information gathered during the audit of the six agencies.
The audit was conducted from 22 July – 30 October 2002 in accordance with Assignment Order No. 2002-020 issued by the Commission on Audit on 18 July 2002. It covered the period 01 January 2001 to 30 June 30 2002.
SPECIFIC AUDIT OBJECTIVE AND SCOPE
Insofar as the NHA is concerned, the audit was aimed at determining whether the agency’s systems and procedures effectively contributed to the government’s objective of providing shelter security units to the targeted low-income group taking into consideration the factors enumerated in the overall audit objective.
JUSTIFICATIONS FOR CHOICE OF AREA
Priority program of the government per MTPDP
AUDIT APPROACH AND METHODOLOGY
The performance of the agency was assessed using the following criteria:
The following approaches/methodologies were employed during the audit:
The audit concluded that the NHA could have contributed to the government’s objective of providing shelter security units to the targeted low-income group more effectively had it adequately managed the existence of risks and weaknesses in the areas of monitoring and coordination, the disposition/distribution of the shelter security units, and the actual occupancy of the units by the intended beneficiaries, as discussed in detail in the pertinent portions of the report.