Lack of resources for initiating a low cost housing program confronted the municipal government of Victorias, Negros Occidental.
Vitorias is the first local government unit which floated the bonds for a housing project in the country. A bond is an instrument of indebtedness sold as IOUs to investors. Its interest rate was lower than the bank’s. It took 18 months for the municipality of Victoria to float the bonds in July 1994.
The floatation of the municipal bond was enthusiastically received by the private sector. Investors were encouraged to use idle funds and presented the LGU with alternatives in mobilizing resources to finance its projects. The ₱8 million target was raised as soon as the bonds were floated. Many investors were still looking for the availability of the bonds which were insured by the Home Insurance and Guaranty Corporation which also acted as the financial adviser of Victorias.
Other players included the provincial government which provided the project equity of ₱ 5 million; the Negros Economic Development Foundation which acted as developer; and the Philippine National Bank which acted as the trustee bank.
The first and second phase of the housing construction had been completed and occupied by the beneficiaries. Victorias is planning to float bonds for the construction of its public market.
This program is recognized as one of the Ten Outstanding Programs in the 1995 Galing Pook Awards.