To my way of thinking, ‘it still needs developing’ is a passive -ing form. The ‘being’ is not required, in fact ‘it still needs being developed’ is not normal English, at least in my lifetime experience of speaking English as a native speaker, and I have been around for quite a few years. I do not believe all grammar books give totally correct information for every situation.
If you really want to have part of the verb ‘to be’ in your sentence, you will need to use ‘it still needs to be developed’, which has virtually the same meaning as ‘it still needs developing’.
Doing a Google search for the phrase, ‘it still needs to be’, I came across the following (and your phrase here at LingQ):
While cognitive ability has its origin partly in genes, it still needs to be developed.
areas that still need to be developed.
Cell Phone Jamming Needs To Be Legalized
Rising oil subsidy needs to be addressed
More needs to be done for special needs children
and thousands more along these lines.
But in searching for ‘it still needs being’, I found:
I know it is long ago but it still needs being said. (this occurred several times, and I do admit to hearing this usage.)
It still needs being reviewed.
…no major damage but it still needs being fixed.
…but it still needs being thought over.
…nonetheless it still needs being accounted for
These, together with your phrase, were all the entries for this phrase that Google gave me. This fact means that this type of construction is rare in English. I am guessing that each of these examples implied that there was a particular reason why had not been said or done, but that it really should be done, despite this reason.
Other sources for information on this topic:
From BBC Learning English at: BBC World Service | Learning English | Grammar Challenge
‘Need + verb-ing’
Sometimes it’s useful to talk about fixing or improving things, but without saying who is going to do it. To do this, we can use need + verb-ing. Today we challenge Asae from Japan to form correct sentences using this grammar, and in return she gives William one or two pieces of advice!
You could look at this reference also: Need -Ing?
And Imy, did you really intend to type ‘it still needs developed’ or were you too tired to think properly?