AFP Mutual Benefit Association Inc.
Prepared by: Faisah Jevah G. Dela Rosa
As part of the AFP Mutual Benefit Association Inc (AFPMBAI) social mission, The Real Estate Housing Loan (REHL) Department launches a program that allocates a housing fund for the purpose of lending to eligible borrowers particularly the AFPMBAI members and its associate an easiest way of reaching to their dream home. The Association believes that every AFPMBAI members and their family deserve not only a decent home but also a quality life through its affordable and responsive insurance protection. It is also extended to their immediate associate members and non-members where they can be part of the said program.
The main goal of this study is to conduct a thorough analytical and qualitative research about the Housing Loan and Mortgage Loan of the Real Estate Department in which this will examine the housing demand in relation to the income and demographic changes. This also tackles the issues behind the current situation of housing program in the Philippines in which it affects the behavior and buying capacity of the clients.
1. To establish a comprehensive basis for providing home financing to the AFPMBAI member, associate members and non-members.
2. To develop and enhance the Real Estate Housing Loan Department’s products through innovative and highly competitive marketing strategies.
3. To evaluate and assess the existing procedures of the AFPMBAI Housing and Mortgage Loan Program.
4. To ensure efficient collection system in the Real Estate Housing Loan through standardizes procedures.
II. Review of Related Literature
In the Philippines, less than 1/3 can afford proper shelter. In Metro Manila alone, there are 3.1 informal settlers; 23% stay in government land, 22% in private properties, 15% in danger zones (which include the streets, bridges, riversides, and along train tracks), and 40% on infrastructure sites. (GMA News Info, 2011)
There still exists a huge problem on housing in the Philippines. Various factors affect this such as financing, government policies and interventions, institutional subsidies, and the values and culture the Filipino people
The Philippine housing market reveals a tremendous gap between the demand and supply of housing. Average annual housing price appreciation in the Philippines like Metro Manila is 32% per year the highest among other major cities in Asia (Habitat and World Bank, 1993)
The high rate of increase in land prices is a major in house price appreciation (Strassman and Blant, 1993; Ballesteros, 2000). The high cost of urban land in the country is due to constraints in the supply side of the markets. (Ballesteros, 2000)
First, there is a situation of poor planning and infrastructure development that limits the supply of housing land. Second, administrative bottlenecks in land and housing developments due to contradicting land laws, unclear standards and overlapping turfs cause delays in obtaining development permission. Third, problems on property rights further increase transaction costs in land development. And lastly, the land ownership is highly concentrated and low land and property tax in the country encourages land idle. Another feature of the housing market in the country is the lack of long-term financing for housing which could provide a way to offset the high unit cost of housing relative to income. Like most of the developing countries, the secondary financial market in the country is undeveloped. Long-term funds for housing are constrained and highly dependent on funds from government social security systems. Moreover, the housing finance program has been unsustainable. One reason is graft and corruption in the approval and release of loans in the low-income sector. It has been reported that payments are released to participating housing developers with no existing...
References: Ballesteros, M. (2003), Philippine Institute for Development Studies: Policy Notes, “A Second Look at Institutional Reforms in the Housing Sector, Philippine Institute of Development Studies, Makati City
Ballesteros, M. (2000), The Dynamics of Housing Demand in the Philippines: Income and Lifestyle Effects, PIDS Research Paper Series No. 2002-01. Makati City
_______________Land Use Planning in Metro Manila and the Urban Fringe: Implications on the Land and Real Estate Market. PIDS Discussion Paper No. 2000-02. Makati City
Geron, P. and G. Llanto (2001) Estimating Effective Demand in the Housing Sector, An Overview of the Philippine Housing Sector, Asian Development Bank. Draft Report.
Strazheim, M. (1975), “An Econometric Analysis of the Urban Housing Market.” National Bureau of Economic Research, Urban and Regional Studies No. 2, Columbia University Press, New York.
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