Bangko Sentral ng Pilipinas Governor Rafael B. Buenaventura today said that banking loans to socialized or low-cost housing may be considered as one form of alternative compliance to the Agri-Agra Law, as provided under the Development Loans Incentive in Sections 8 and 9 of R.A. No. 7721. However, he clarified that the BSP has not changed its definition of socialized and low-cost housing as defined by the Housing and Urban Development Coordinating Council (HUDCC).
Low-cost housing is defined by the HUDCC as housing loans not exceeding P180,000, while economic housing are housing loans in excess of P180,000 but not more that P375,000. This is based on the existing guidelines of the HUDCC for the implementation of various government housing programs. The amounts are subject to change as may be prescribed by HUDCC in the future.
Earlier, the Economic Mobilization Group (EMG) has requested the BSP to consider the possibility of re-defining housing loans of up to P1 million as alternative compliance under the Agri-Agra Law. This will allow banks to channel loanable funds intended for lending to Agri-Agra activities to the housing sector. These funds are currently unused due to lack of eligible borrowers. The EMG position is that shifting the otherwise unused funds to housing will help pump prime the economy because of its multiplier effects.
During the last EMG meeting on 31 August 1999, BSP Governor Buenaventura only reiterated the BSP position that there should be a redefinition of socialized and low-cost housing loans to facilitate the proposal that housing loans of up to P1 million be allowed as alternative compliance under the Agri-Agra Law. But the BSP stated that this redefinition of terms should originate from HUDCC, which is the authority in housing issues.