The Board of Investments (BoI) is bent on removing incentives on housing projects particularly vertical construction in the 2010 Investment Priorities Plan (IPP) after granting perks even to high-end condominium projects located in Metro Manila including the central business district of Makati.

Trade and Industry Undersecretary and BoI managing head Elmer C. Hernandez said they are currently reviewing the housing incentives, which the BoI extended last year in light of the global financial crisis.

According to Hernandez, the BoI is particularly keen on scrapping incentives for vertical housing projects located in Metro Manila.

The construction sector has a strong industry linkage and the industry was able to justify last year to BoI that continued listing of this industry under the IPP for incentive purposes would lessen the impact of the economic crisis on the domestic economy.

Indeed, the BoI was flooded last year with low mass housing projects and high-end condominium buildings located in Metro Manila including the central business district of Makati by major developers that have been passed up as low cost mass housing projects.

In fact, majority of the projects approved by the BoI in 2009 fell under the housing category as proponents rushed up their registration in anticipation of the delisting of this activity in the 2010 IPP.

Those projects were able to register with the BoI because the current BoI policy grants four year income tax holiday to such projects as long as 20 percent of their total area of development is dedicated to socialized mass housing.

This policy is consistent with the policy of the Housing and Urban Development Coordinating Council, which is is spearheading the government’s mass housing program.

According to Hernandez, the BoI has decided to review the vertical construction projects because there have been several high-rise buildings located in Metro Manila that have applied for incentives. He, however, said that the agency would continue to support mass housing project in support of the government’s mass housing program.

“We continue to support mass housing because the government wants to address housing backlog, but we have to balance that,” he said.

Of the projected 3.756 million housing units required by the country until 2010, the government could only provide a third or 1.145 million units while the remaining 2.6 million units of shortfall should be left to the private sector for the development of socialized and low-cost housing.