Administrative Relationships And Lending Systems In Philippines Finance Essay
The cost of decent housing is high as the market tends to reallocate rights to most valuable use of land. Past housing programs enabled non-poor households to gain access to the formal market. Socialized housing remains inaccessible especially to the urban poor. And informal settlements persist. These were reported in the Medium Term Philippine Development Plan for 1999 to 2004. Good governance in the parlance of the Asian Development Bank involves four basic elements - accountability, participation, predictability and transparency. Good governance coupled with information and communication technology (ICT) results in e-governance. One scholar noted that the need for responsibility, expertise, and coordination tends to bring about centralization of decision-making functions and separation of decision from action. He posited that there is a tendency for decentralization because a very large part of the information relevant to decisions originates at the operating level and the separation of decision from action increases time and manpower costs of making and transmitting decisions. Does e-governance of housing and urban development exist in the Philippines? What is the role of ICT, if any, in the centralization and/or decentralization of the administrative relationships of the Housing and Urban Development Coordinating Council (HUDCC) with key shelter agencies and support agencies? Has ICT influenced the centralization and/or decentralization of decision making within HUDCC? Is there a relationship between ICT and centralization and/or decentralization of HUDCC lending systems? Is the demand for decent housing now being met? These are some questions that the paper attempts to address. This historical, case and descriptive study aims to determine: (i) if there is a correlation between ICT and centralization and/or decentralization of administrative relationships, (ii) if there is a correlation between ICT and centralization and/or decentralization of lending systems and (iii) whether the demand for decent housing is being met at the moment.
Keywords-Information and communication technology, good governance, administrative and lending systems, decent housing, centralization and decentralization.
EXECUTIVE Order No. 90 (December 17, 1986) created the Housing and Urban Development Coordinating Council (HUDCC). Under the immediate control and supervision of the President of the Philippines, HUDCC had the main function of coordinating the activities of the government housing agencies to ensure the accomplishment of the National Shelter Program, and was composed of a Chairman, the Heads of the key housing and support agencies, a representative each from the National Economic Development Authority (NEDA), the Departments of Finance, Budget and Management, Public Works and Highways, the Development Bank of the Philippines, and two representatives from the private sector.
The Chairman of the Council serves as ex officio Chairman of the governing boards of the key housing agencies, namely: the National Housing Authority (NHA, as the sole government agency engaged in direct shelter production to provide housing assistance to the lowest 30% of urban income earners through slum upgrading, squatter relocation, development of sites and services and construction of core-housing units), National Home Mortgage Finance Corporation (NHMFC, as the major government home mortgage institution with the initial main function of operating a viable home mortgage market utilizing funds from SSS, GSIS and HDMF and developing a system to attract private institutional funds into long-term housing mortgages), Housing and Land Use Regulatory Board (HLURB, as the sole regulatory body for housing and land development charged with encouraging private sector participation in low cost housing through liberalization of development standards, simplification of regulations and decentralization of approvals for permits and licenses) and Home Insurance and Guaranty Corporation (HIGC, now Home Guaranty Corporation or HGC, which assists private developers to undertake low and middle income mass housing production and encourage private institutional funds and commercial lenders).
Support (funding) agencies include the Home Development Mutual Fund (HDMF or Pag-Ibig Fund, to utilize funds not required for provident benefits for housing loans for members), Social Security System (SSS, as primary provider of funds for long-term housing mortgages for low and middle-income private sector employees) and Government Service Insurance System (GSIS, as the primary provider of funds for long-term housing mortgages for low and middle-income government employees).
Under E.O. 90 (s. 1986), the President of the Philippines is the department head of the coordinating, key and support (funding) agencies of the National Shelter Program, exercising direct control and supervision over them. HUDCC took over from the Ministry of Human Settlements. Under E.O. 90, it was granted powers and functions to:
Formulate national objectives for housing and urban development and to design broad strategies for accomplishment of these objectives;
Determine the participation and coordinate the activities of the key government housing agencies in the national housing program;
Monitor, review and evaluate the effective exercise by these agencies of their assigned functions;
Assist in the maximum participation of the private sector in all aspects of housing and urban development;
Recommend new legislation and amendments to existing laws as may be necessary for the attainment of government's objective in housing;
Formulate the basic policies, guidelines and implementing mechanisms for the disposal or development of acquired or existing assets of the key housing agencies;
Exercise or perform other powers and functions as may be deemed necessary, proper or incidental to the attainment of its purpose and objectives.
Significantly, Executive Order No. 357 (May 24, 1989) was issued to strengthen the existing coordinating mechanism of the National Shelter Program by delegating overall administrative supervision over the key housing agencies, namely, the NHA, NHMFC, HLURB, and HGC, to the HUDCC acting as the Presidential arm on the National Shelter Program under the direct control and supervision of the President of the Philippines. Pursuant to the law, HUDCC was specifically directed to review the organization, programs and projects of key housing agencies as well as decentralize its operations and of the key housing agencies by integrating the regional activities of these agencies in order to attain an equitable regional distribution of housing benefits.
Executive Order No. 190 (July 19, 1994) created the National Information Technology Council (NITC). Pursuant to the law, all departments, major agencies and government-owned or-controlled corporations (GOCCs) shall each designate an Information Systems Planner, who is at least a Director or of equivalent rank, who shall serve as the Agency's action officer for the NITP2000 and IT-related matters, particularly for the preparation, development, and implementation of the Information Systems Plans of the department and its attached agencies, other major agencies of the government and the GOCCs. As a major government agency, HUDCC is covered by this Executive Order.
Executive Order No. 159 (October 12, 1999) reiterated the role of the HUDCC. Under E.O. 159 (s. 1999), it shall continue to focus on policy formulation and direction setting for the government's shelter program, while the Presidents/Chief Executive Officers of the key shelter agencies shall be responsible and accountable for the implementation of their respective housing programs and projects.
On May 28, 2001, Executive Order No. 20 (s. 2001) was promulgated to further strengthen the HUDCC as the sole lead agency in the implementation of the government shelter/housing programs. Among its primary powers and functions under the law are to:
Coordinate and monitor the activities of all government agencies undertaking housing projects, including those of Local Government Units (LGUs), to ensure the accomplishment of the goals of the government's housing program;
Encourage the maximum participation of the private sector in all aspects of housing and urban development;
Formulate the basic policies, guidelines and implementing mechanisms for the disposal or development of acquired or existing assets of the key housing agencies which are not required for the accomplishment of their basic mandate;
Identify, plan and secure local and foreign funding for housing programs and projects;
Provide directions to the HLURB to ensure rational land use for the equitable distribution and enjoyment of development benefits.
Recommend new legislation and amendments to existing laws as maybe necessary for the attainment of government's objectives in housing; and
Undertake other functions as provided by existing laws.
Under E.O. 20 (s. 2001), the HUDCC shall exercise administrative supervision over the NHA, NHMFC, HDMF, HLURB and HGC, which agencies shall remain attached to HUDCC for policy and program coordination. For this purpose, said agencies shall provide manpower, logistical support and other facilities to the HUDCC Chairman. The HUDCC Chairman was given the rank of Department Secretary and was designated a regular member of the Cabinet and the chief implementing official of all government shelter/housing programs and related functions and activities. The HUDCC Chairman shall also serve as ex officio Chairman of the governing boards of NHA, NHMFC, HDMF and HLURB and Vice Chairman of HGC.
Executive Order No. 272 (January 20, 2004) authorized the creation of the Social Housing Finance Corporation (SHFC) and directed the transfer of the Community Mortgage Program (CMP), Abot-Kaya Pabahay Fund (AKPF) Program, and other social housing powers and functions of the NHMFC to the SHFC. The law authorized the NHMFC to organize and establish the SHFC, as a wholly-owned subsidiary formed in accordance with the Corporation Code and pertinent rules and regulations issued by the Securities and Exchange Commission [SEC]. The law also provides that upon incorporation, the SHFC shall be under the administrative supervision of the HUDCC. The SHFC shall be the lead government agency to undertake social housing programs that will cater to the formal and informal sectors in the low-income bracket and shall take charge of developing and administering social housing program schemes, particularly the CMP and the AKPF Program (amortization support program and developmental financing program).
In consonance with the 1999-2004 Medium Term Philippine Development Plan (MTPDP), institutional strengthening for housing and urban development will be pursued through the creation of the Department of Housing and Urban Development (DHUD). The aim is to further strengthen the coordination and supervision of policy on shelter delivery, finance and regulation of housing and urban development services. The proposed law speaks of supervision and control. This goal or strategy is continued in the 2004-2010 MTPDP. The transformation of the HUDCC into the DHUD also aims to establish a lead agency for governance to address the pressing issues of a runaway population growth, rapid urbanization, urban poverty, growth disparities, and poor urban environment.
Good governance in the parlance of the Asian Development Bank (ADB, 2005) involves four basic elements - accountability, participation, predictability and transparency. Electronic governance (e-governance) refers to the use of information and communication technology (ICT) to promote good governance, according to ADB. Simon (1947; 1997) noted that the need for responsibility, expertise, and coordination tends to bring about centralization of decision-making functions and separation of decision from action. He posited that there is a tendency for decentralization because a very large part of the information relevant to decisions originates at the operating level and the separation of decision from action increases time and manpower costs of making and transmitting decisions.
Does e-governance of housing and urban development exist in the Philippines? What is the role of ICT, if any, in the centralization and/or decentralization of the administrative relationships of HUDCC with key shelter agencies and support agencies? Has ICT influenced the centralization and/or decentralization of decision making within HUDCC? Is there a relationship between ICT and centralization and/or decentralization of HUDCC lending systems? Is the demand for decent housing now being met? These are some questions that the paper attempts to address. This historical, case, descriptive, and analytical study aims to determine: (i) if there is a correlation between ICT and centralization and/or decentralization of administrative relationships, (ii) if there is a correlation between ICT and centralization and/or decentralization of lending systems and (iii) whether the demand for decent housing is being met at the moment.
Background and literature review
In his book Administrative Behavior (1947; 1997), Herbert Simon wrote that difficulties of transmission from sources of information to decision centers tend to draw the latter to the former, while difficulties of transmission from decision centers to points of action create a pull in the opposite direction.  Simon adds that the pulls that tend to bring about a centralization of decision-making functions and a consequent separation of decision from action are the need for responsibility, expertise, and coordination; the fact that a very large portion of information relevant to decisions originates at the operating level and that the separation of decision from action increases time and man-power costs of making and transmitting decisions are the principal pulls in the opposite direction - that of decentralization. 
He notes that the formal system of communications - channels of communication which have been consciously established, e.g., oral communications, memoranda and letters, paper-flow, record and reports, and manuals - is soon supplemented by an informal network of communications based on social relations within the organization, through which will flow information, advice and even orders. 
According to Simon, decision-centers (executive positions) must be staffed with persons who can assist the executive in communications functions, and the organization develops specialized repositories of official "memory" - files, records, libraries, follow-up systems.  Organization units may be established for specific information-gathering functions, e.g., accounting, inspection, administrative analysis, intelligence, and the like. 
From the information processing point of view, Simon argues that division of labor means factoring the total system of decisions into relatively independent subsystems.  The division is necessary because of the bounded rationality of both humans and computers.  The number of alternatives and consequences that can be considered is severely restricted by the limited capacities of the available processors.  Thus, a factorization that minimizes interdependencies and permits a maximum degree of decentralization of final decision to the subsystems and maximum use of relatively simple and cheap coordinating devices is needed.  The size of decision problems handled by organizations must be reduced to manageable proportions by factorization and the number of decisions to be processed must be limited by applying attention management.  Attention management for an organization is the same for an individual human being, that is, processing capacity must be allocated to specific decision tasks, and if total capacity is not adequate to total tasks, then priorities must be set.  The inherent capacity limits of information-processing systems impose requirements on organizational design: (i) the totality of decision problems be factored in a way that would minimize interdependence of components; and (ii) the entire system be so structured as to conserve attention which is scarce. 
Cuaresma (1997) notes that under a policy of decentralization and local autonomy, local government units take on an increasingly important role in socioeconomic development.  She speaks of decentralization from the center to local government units and observes that as the economy reaches higher levels of growth, and as the quality of life of the people improves, local governments tend to play a more significant role in ensuring the delivery of public goods and services.  Pressures for change, modernization and globalization will require local governments to improve and redefine their scope and quality of service delivery, and for the national government to facilitate the strengthening of local governments. 
In Corona v. Court of Appeals,  the Philippine Supreme Court ruled that "An attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship" between the Department and the attached agency. The attachment is merely for "policy and program coordination." With respect to administrative matters, the independence of an attached agency from Departmental control and supervision is further reinforced by the fact that even an agency under a Department's administrative supervision is free from Departmental interference with respect to appointments and other personnel actions "in accordance with the decentralization of personnel functions" under the Administrative Code of 1987. Moreover, the Administrative Code explicitly provides that Chapter 8 of book IV on supervision and control shall not apply to chartered institutions attached to a Department."
This means that attachment is a decentralized type of administrative relationship while supervision and control is centralized. In between the two lies administrative supervision.
According to Peters, citing Simon:
"As Simon (1947) pointed out almost a half century ago, the solutions for organizational problems tend to come opposing pairs, and almost inevitably reformers will argue that organizations have gone too far in the direction of one end of the continuum and will propose the other end of that dimension as the solution (see also Peters and Wright 1998). When organizations become overly centralized, the obvious solution is to decentralize until the lack of control produced by that arrangement produces demands for a return to centralization, and then the circle starts again." 
Findings and Analysis
Programs and Directions
From 2001 to 2004, it was reported that HUDCC accomplished 56% of its target for socialized housing (below PhP225,000) and 122% for low cost housing (PhP225,000 - PhP2M), as may be gleaned from the following table:
Table 1 
The data reflect an overall accomplishment rate of 73.6%.
In terms of shelter security units for household beneficiaries, the following were also reported:
Table 2 
Notably, government introduced in 1999 the Multi-Window Lending System (MWLS) to replace the Unified Home Lending Program (UHLP) which was under the NHMFC.  UHLP had been saddled with a low loan repayment rate and huge arrears.  The MWLS utilized government financial institutions as separate lending windows for housing loans to specified target clientele. The GFIs committed and lent at government-directed subsidized rates for socialized and economic housing, and at market rates for open housing (Table 2).  As of December 2000, of the PhPP37 billion committed by five GFIs for housing, total utilization was only PhP5.6 billion (15%) for 26,011 shelter security units (i.e., a lot, house or house and lot package).  There was a felt need to review the MWLS and identify a sustainable housing finance system that would provide low-income households access to affordable shelter. 
Table 3 
MULTI-WINDOW LENDING SYSTEM
Up to P180,000
Private Employees, Trade Union, OFW's
LGU employees, Cooperative
a/ Fixed rate for entire loan term; loan period not more than 30 years
b/ SSS, GSIS, HDMF: repricing every 5 years; LBP, PNB: annual repricing
c/ Price ranges per housing package were as follows: P180,000 and below for socialized housing; over P180,000-P500,000 for low-cost or economic housing; over P500,000-P2.0 million for medium-cost housing; over P2.0-P5.0 million for open housing.
Source: Housing and Urban Development Coordinating Council; Medium Term Philippine Development Plan (1999-2004)
Likewise, in 1999, Republic Act (RA) 8763 was passed to increase the capitalization of the HGC from P2.5 billion to P50 billion and to extend its corporate life for another 50 years.  The same law provided for the prioritization of socialized and low-cost housing packages. The increased capitalization strengthened the credit guaranty capacity of HGC. 
Housing Finance 
At present, HUDCC undertakes housing finance via the HDMF, CMP, DPUCSP, AKPF, and HGC.
The HDMF or Pag-IBIG Fund has programs to address the housing requirements of its members and private developers:
a.Â Credit Facility for Individual Members
This is a financing program for active Pag-IBIG members here and abroad who have completed the necessary monthly contributions.Â The housing loan may be used to purchase a fully developed lot or house and lot, purchase of lot and construction of a residential unit thereon, construction or completion of a house on a lot owned by the member, home improvement, and refinancing of an existing mortgage with an institution acceptable to Pag-IBIG. Under this program, Pag-ibig members may borrow up to PhP2.0 million, which shall be paid at a maximum of thirty (30) years. Â The prevailing interest rates under the Abot-Kamay Pabahay Program approved in November 2006 are -
Interest Rate (p.a.)
Up to PhP 300,000
Over PhP 300,000 - PhP 750,000
Over PhP 750,000 - PhP 2,000,000
b.Â Facilities for Private Developers
Ã¯â€šÂ§Â The Pag-ibig Credit Facility for Developers aims to provide a liquidity mechanism for private developers to enable them to continue developing housing projects pending the take-out of delivered and complete housing loan applications.Â Under this facility are several schemes which the developer may avail of:
-Â Pag-IBIG Developmental Loan Program, which seeks to create additional housing inventories through the provision of developmental financing at easier terms and lower rates to developers or proponents of housing projects.
-Â Pag-IBIG City Program, which provides a ready inventory of completed housing units in a project to be known as Pag-IBIG City, which shall be available for sale at more affordable prices to Pag-IBIG members.
This program also aims to lower the project financing costs for housing development since HDMF shall provide a faster turnaround of the developer's investment, thereby increasing his capacity for housing production. This shall redound to the benefit of Pag-IBIG members in terms of lower priced housing packages.
-Â Takeout Mechanism under the Developers' CTS/REM Scheme
In order to fast track the government's housing program, Pag-IBIG opened the takeout mechanism under the developers Contract To Sell/Real Estate Mortgage (CTS/REM) mechanism by providing an express take-out window for accredited developers who meet the standards set by Pag-IBIG Fund for project development and house construction.
The program aims to enhance the asset quality of the Pag-IBIG mortgage loan portfolio by instituting a credit risk-sharing mechanism with housing developers.Â It also defines the parameters in the allocation and disbursement of funds allocated for housing, specifically for developer-assisted member-loans.
- Â Program for the Development of Medium/High-Rise Condominium Building (MHRB) Projects in Metro Manila and Highly Urbanized Cities
This program aims to provide a ready inventory of condominium units for sale at more affordable prices to eligible Pag-IBIG members in the Metro Manila area and highly urbanized cities.Â Through this program, Pag-IBIG members who are working in the Metro Manila area and highly urbanized cities will have an opportunity to acquire condominium units in the area, thereby reducing transportation costs to and from their places of habitat.
Through a faster turnaround of their investments in the construction and development of medium/high-rise condominium buildings in the Metro Manila area and highly urbanized cities, this program will provide developers with a liquidity mechanism that will increase their capacity for housing production and reduce project financing costs.
c.Â Â Developmental Housing Loan Program for Local Government Units (LGUs)
This program is geared towards sustaining the capabilities of LGUs to fast track the development and implementation of housing projects in their respective localities, and to make housing accessible and affordable for its employees and constituents.
d.Â Â Group Land Acquisition and Development (Glad) Program
The GLAD Program aims to provide financial assistance to organized groups of formally employed Fund members for the acquisition and development of raw land or partially developed land, which shall serve as the site of their housing units.
The Community Mortgage Program (CMP) utilizes an innovative system of mortgage financing whereby beneficiaries, through the concept of community ownership, may acquire a privately-ownedÂ undivided tract of land.Â Financing through the CMP is intended primarily to assist residents of blighted or depressed areas or the urban poor. The CMP, implemented by the SHFC, is a three-stage loan program - land purchase, site development, and house construction/improvement.Â Depending on its present capacity and needs, the borrowing community association may avail itself of the CMP loan either on three stages, or on a one-time basis.Â Maximum loanable amount per family-beneficiary is PhP120,000 for those located in Metro Manila and other highly urbanized areas, or up to PhP100,000 per family in other areas, payable up to 25 years at 6% interest per annum. Since the start of its implementation in 1989, CMP has granted a total of PhP6.4 billion loans to secure the tenure of 182,800 informal settler families nationwide.
The Development of Poor Urban Communities Sector Project (DPUCSP) was envisioned to contribute to the Government's overarching goal of poverty alleviation. It addresses the underlying deficiencies in the shelter sector that contribute to the prevalence of urban poverty, and to the vulnerability of the poor, causing their exclusion from mainstream society. The Project was designed under a technical assistance grant funded by the Asian Development Bank (ADB). With the Development Bank of the Philippines (DBP) as implementing agency and HUDCC as oversight agency, the DPUCSP shall provide different stakeholders with financing facilities to:
Improve access of the poor urban households to secure land tenure, affordable shelter, basic municipal infrastructure services, and community facilities;
Avail of financial services for microenterprise development, home improvements, and housing; and
Assist in the decentralization of shelter sector activities and strengthen the role and capacity of local governments to meet their shelter sector responsibilities, as provided for in the Local Government Code.
To attain the objectives of DPUCSP, the Project has been designed to consist of three parts: Site Development and Tenure Distribution; Shelter Finance Provision; and Capacity Building and Implementation Support.
The Abot-Kaya Pabahay Fund (AKPF) was created pursuant to RA 6846 or the Social Housing Support Fund Act, with the objectives of enhancing the affordability of low-cost housing by low-income families and providing developmental financing for low-cost housing projects thus eliminating risks for the funding agencies involved in housing. The program is intended to give amortization support, expedite the development of land into suitable sites for social housing (by providing developmental financing to developers of low-cost housing projects), and establish a strong guarantee system to ensure viable cash flow for the funding agencies involved in housing. The program is divided into three components namely:
Amortization Support - A qualified borrower shall be eligible to apply for administration support.Â Eligible borrowers with the appropriate family income shall be entitled to a monthly amortization support for the first five years of the loan amortization period.
Developmental Financing - Under this component, proponents of low-cost housing projects shall be entitled to a developmental financing loan not exceeding 80% of the entire project cost. Both the Amortization support and Developmental financing components of the AKPF are administered by the SHFC.
Cash Flow Guarantee - This program, with HGC as trustee and administrator, seeks to eliminate credit risk for funders of socialized housing loans.
The HGC provides guaranty cover to investments and credits for housing through its guaranty facilities to encourage banks and other financial institutions to channel their resources into home building and ownership. HGC provides risk cover on the outstanding principal and interest yield up to 11%. HGC guaranteed loans and investments are exempt from all taxes up to 11%. There are several types of guarantees HGC offers such as:
Retail Loan Guaranty - guaranty coverage on loans/credit facility extended for the purchase/acquisition of a single-family residence.
Developmental Loan Guaranty - a guaranty facility covering loans extended for the development of subdivisions, townhouses, dormitories, apartments and other residential dwellings.
Guaranty for Securitization Scheme - guaranty cover on securities or financial instruments or on the receivables backing-up the securities.Â The issuance is backed-up by a pool of assets, such as receivables and/or real estate properties.
ICT in HUDCC
HUDCC has microcomputers. Its network system consists of servers, workstations and printers. There are portable/handheld PCs, port hub, UPS, flatbed scanners, modems, data video projection system, CAD plotter, digital cameras, and back-up tapes. Its networking software includes Mail Server, System Management Server and Internet Information Server. Tools and utilities include Server Protect for Windows NT, Scan Mail, Office Scan for Workstations and Anti Virus. It has internet access facilities, websites, fax machines, handy cams, radio and cellular technologies and desktop publishing. HUDCC also has geographic information system (GIS). HUDCC's decision support system includes a digital library.
As far as records management is concerned, HUDCC's digital library enables an employee to research electronically for relevant documents and materials by using his PC at his own workstation. In terms of "netware," HUDCC has a local area network (LAN), intranet and internet systems. There is a database for fixed assets and equipment. HUDCC also has a functioning document tracking system. Through a PC at the Receiving Section of HUDCC, documents received are traced by keying in relevant information such as the name of the document sender and date. These systems are especially useful for policy and decision-making, coordination, monitoring and evaluation.
There are also forms and manuals downloadable from the websites. These systems also help reduce the processing time of transactions at HUDCC.
But the demand for housing continues to rise. Housing need from 2005 to 2010 has reached 3.75 million, with 56% of the need coming from Southern Tagalog, Metro Manila and Central Luzon: 
Table 5 
The banking system and private sector participate minimally in socialized housing, partly because they cannot compete with the subsidized (i.e., below market) housing loan interest rates of government housing programs.  The thrust of government is to shift towards a market-oriented housing finance system.  Outsourcing, upgrading of operating systems and procedures, and enhancement of financial system management are seen as strategies to enhance collection efficiency and servicing of housing loans. 
In HUDCC, ICT is seemingly improving access to, and the analysis and dissemination of, information. Personal computers together with the standard applications software, "netware" (LAN, intranet and internet systems) and ICT systems (digital library, database of fixed assets and document tracking system) are in place for the analysis of data collected and measurement of success. Internal coordination is therefore enhanced.
ICT also played a role in the coordination, monitoring and evaluation of the agencies attached to HUDCC. This was shown in the shift from the Unified Home Lending Program (UHLP) then handled by NHMFC to the Multi-Window Lending System (MWLS). The shift in 1999 from UHLP to MWLS also represented a movement from centralization (rigidity) to decentralization (flexibility) in housing finance (lending system) and service delivery. This was so because the information, decision and action centers involved were merging. Invariably, ICTs of the entities that participated in MWLS were also tapped in service delivery. This also created a spiral of "labor flexibilization" - a term that denotes the ability of employers to reduce the cost of labor, increase labor productivity and strengthen management control over the work process and workers, as exemplified by the spin-off of non-core businesses through subcontracting and outsourcing.  This was especially true of banks that participated in the MWLS since only inherent banking functions (i.e., those related to deposits and deposit taking) may not be outsourced under the General Banking Law of 2000 (RA 8791). Thus, pursuant to the said law, information technology services may be outsourced subject to prior approval of the Monetary Board of the Bangko Sentral ng Pilipinas, aside from credit investigation and property appraisal services which are related to lending.
Decentralization can also be gleaned from the fact that HUDCC presently undertakes housing finance via the HDMF, CMP, DPUCSP, AKPF, and HGC.
Temporal and spatial considerations, that is, time and man-power costs of making and transmitting decisions, also lead to the union of sources of information, decision centers and points of action (decentralization) of lending systems. This is fostered by the requirement among housing agencies to reduce transaction processing time. Service delivery to stakeholders is enhanced through downloadable forms and manuals at websites. However, access to websites is a problem especially for the urban poor.
The decentralization in housing finance (lending system) and service delivery has likewise given impetus for more centralized forms of administrative relationships. Laws have been passed to strengthen HUDCC, that is, from mere coordination to administrative supervision of the key housing agencies. The Medium Term Philippine Development Plan evinces a movement in the direction of supervision and control, as may be gleaned from the proposed creation of the Department of Housing and Urban Development (DHUD).
In terms of administrative relationships, decision centers are not merged with information and action centers in light of the need to strengthen responsibility, expertise and coordination, especially for policy making, at HUDCC. The separation of decision centers from sources of information and points of action is made possible by ICT through the LAN, intranet and internet facilities, digital library and document tracking system of HUDCC.
However, one point needs to be factored into the proposal to create DHUD. The Administrative Code (1987) provides that the Secretary's supervision and control shall not apply to chartered institutions or government-owned or controlled corporations attached to the department.  This was emphasized by the Philippine Supreme Court in Corona v. Court of Appeals, supra.
Be that as it may, it can be seen that in HUDCC, ICT is influencing the movement towards decentralization of lending systems and centralization of administrative relationships. The movement in opposite directions seems to be imposed by the inherent capacity limits of information-processing systems, a situation described by Simon (1997) as the bounded rationality of both humans and computers. Decentralization of lending systems or operations tends to minimize the interdependence of the agencies involved while centralization of administrative relationships tends to conserve the scarce resource - attention - especially in policy making which is a main function of HUDCC.
ICT, centralization of administrative relationships and decentralization of lending systems in HUDCC appear to be correlated. Meanwhile, demand for decent housing continues to rise in tandem with population growth despite the accomplishment rate of HUDCC.
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