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5 Floor Kalayaan Bldg., corner Dela Rosa and Salcedo Streets Legaspi Village, 1229 Makati City Philippines Telephone Nos.: (632) 893-4328 / 893-4132 Telefax No.: (632) 856-1554 Email Address: shda.secretariat@gmail.com

Chairman of the Board MANUEL C. CRISOSTOMO Firm Builders Realty Devt. Corp. National President PAUL H. TANCHI Basic Housing Solutions, Inc. First Vice-President CHRISTOPHER G. NARCISO Robinsons Homes, Inc. Second Vice-President GEORGE T. SIY Convergence Realty Devt. Corp. Corporate Secretary .ARMENIA C. BALLESTEROS SM Development Corp. National Treasurer EPIFANIO N. SANTILLAN, JR. P.A. Metro Res. Builders, Inc. Auditor ROSIE T. WANG Citihomes Builder & Devt., Inc Public Relations Officer RENE A. LEDESMA, JR. LEDESCO Development Corp

February 23, 2012

UNDERSECRETARY ADRIAN S. CRISTOBAL, JR. Vice-Chairman and Managing Head Board of Investments 385 Gil Puyat Avenue, Makati City Dear Usec. Cristobal,

The Subdivision and Housing Developers Association, Inc. (SHDA) would like to thank the Board of Investments (BOI) for continuing to include low cost mass housing as part of the BOI Investment Priorities Plan (IPP) for 2012.

Addressing the Growing Housing Backlog

We strongly believe that this is in full cognizance of countrys persistent need to address the still growing housing backlog which stood at 3.6 million as of 2010 and estimated by the Housing and Urban Development Coordinating Council (HUDCC) to reach 5.7 million by 2016 unless the current trend in housing production is significantly enlarged to match demand.

BENIRANDO D. CLAUDIO Sarangani Land & Property Corp. JOHN PAUL T. DY Prominence Property Devt. Corp. ARLENE C. KEH Cypress Grove Estates Corp. AUGUSTO G. LEONARDO JR. Property Co. of Friends, Inc. JEFFREY T. NG Cathay Land, Inc. RODEL B. RACADIO Camella Homes, Inc. RENATO S. TAN R.J. Lhinet Development Corp. WILFREDO M. TAN Hausland Development Corp. Governor - LUZON DENNIS R. LEVERIZA Welmanville Devt. Corp. Governor VISAYAS BERNADETTE TIU EON Realty and Devt. Corp. Governor - MINDANAO LEMUEL R. PODADOR RJP Realty and Devt. Corp.

Contribution to the Economy

We also believe that the BOI has taken into account the positive contribution of the housing and real estate industry to the economy in terms of the high multiplier effect of real estate (and its allied activity, construction) where, according to the NSCB 2000 Input-Output Matrix, every one peso (P1.00) spent in the sector leads to P1.84 increase in overall economic activity; and also the significant level of employment that the sector creates.

Raising the Ceiling for Qualified Projects

Our Association wishes to reiterate our request to increase the price ceiling of housing units qualified for BOI incentives from P2.5M to P3M. This is in keeping with the national policy under the Tax Code of 1997 which led to the recent regulation adopted by the Bureau of Internal Revenue that now exempts from VAT coverage the sale of residential units priced up to P3.199 million.

Need for an Enabling Environment

Consistency in policies is an imperative on the part of the government to provide an enabling environment, which is especially very crucial in the housing sector where most of the resources mobilized, come from the private sector including those of Pag-IBIG and SSS (workers savings) and the investments by developers. According to economist Dr. Cielito Habito, the

Robinsons Land, Inc.

JESUS B. ATENCIO 8990 Housing Devt. Corp.

ROY D. CALLEJA GPUO Realty Devt. Inc.

BANSAN C. CHOA NOEL S. GONZALES JOSE S. DE GUZMAN Surewell Equities, Inc. EHPI Dept. Corp. (CHMI) Forte Realty Corp.


Alunan Realty Company, Inc.

annual public expenditure for housing in the Philippines is approximately less than 1 percent of the total government expenditures and accounts for less than 0.1 percent of GDP - one of the lowest in Asia.

Towards a Housing Industry Road Map

Hence, the industrys own focus as we formulate the housing industry road map is to develop close partnership with the government towards significantly reducing and eventually eliminating the housing backlog. We hope to see greater efficiency orientation in the regulatory systems, simplification of procedures, enhanced speed and quality of public service, greater transparency, and policy stability which are key factors to fast- tracking the production of decent affordable housing in the country. Harmonizing the BOI and HLURB Requirements In line with this, we strongly recommend harmonization of the BOI and HLURB requirements and guidelines to improve the socialized housing compliance and minimize confusion on the part of the developers. The HLURB has adopted a policy on alternative modes of compliance, which now include the provision of educational facilities and investment in refurbishing the non-performing assets of housing finance agencies.

Encouragement and Dynamism

Indeed, the IPP has been an effective encouragement to the housing industry. The incentive has spurred further dynamism and growth in the real estate and housing developments and has provided the impetus for stronger investor interest in the sector. For instance, between 2009 and 2010, the growth of housing production in terms of new residential floor areas constructed was roughly 21%, with 86,185 new housing units in 2010, based on NSO data. The SHDA as an organization is one with the national government in its resolve to address the housing backlog in the country. We hope that our request will be given further due and favourable consideration. Thank you very much. Very truly yours,

PAUL H. TANCHI National President

cc: Lucita P. Reyes Executive Director, Industry Development Group Corazon Halili-Dichosa Director, Industrial Policy Department