The Commission on Audit (COA) has flagged the Department of Human Settlements and Urban Development (DHSUD) for miscalculating developers’ contributions to socialized housing, calling for reassessment and collection of underpayments.

COA said existing escrow funds were computed under DHSUD Department Order No. 2021-004, which the Department of Justice had previously flagged for legal infirmities.

The audit found the rules inconsistent with Republic Act 7279, as amended by RA 10884, effectively reducing the required share of developers’ participation in the Balanced Housing Development Program (BHDP). By law, developers of subdivision and condominium projects must allocate part of their project area or cost for socialized housing.

COA called for recomputation of all incentivized compliance with BHDP dating back to 2018 to correct underpayments.

“Reassessment or recomputation of compliance obligations applies to projects with provisional escrow deposits that are still under evaluation and awaiting final compliance clearance."

"Likewise, projects that have already been granted compliance clearance shall still be subject to reassessment, since subsequent findings show that the compliance rendered was insufficient or not in accordance with the law; hence, they shall be required to fulfill their obligations accordingly," COA added.

DHSUD said it would comply with both DOJ and COA findings and invited developer groups to discuss solutions. Secretary Jose Ramon Aliling assured developers would be given ample time to comply, considering the economic effects of the Middle East conflict.