The Philippine Housing Plan Is an Epic Failure

In a CNN report written by Paolo Taruc on September 21, 2015, the Philippines emerged as one of Southeast Asia’s fastest growing economies with an average gross domestic product (GDP) growth rate of 6.2% per year from 2010 to 2014. The figure represents the highest growth in nearly four decades, according to the National Economic and Development Authority (NEDA).

Former NEDA chief Arsenio Balisacan believes that the country’s economic gains have been a boon to the property sector. “The shape of real estate industry in the Philippines has changed dramatically over the years. In particular, the property market has grown robustly over the last 20 years as increasing demand for residential and commercial properties in the country became ever more evident against the backdrop of our changing economic landscape,” he said in a speech last July 28, 2015 during the summit organized by the Land Registration Authority (LRA) and The Organization of Property Stakeholders, Inc.

“While the property industry has already been doing very well in the past few years… the sector is seen to grow even more robustly, driven by the continued positive outlook on the economy and the projected expansion of outsourcing industry within the next five years,” he added.

Metro Manila has more than 3 Million Informal Settlers

However, behind a robust property canvass, it is time to paint a different picture. In a 2010 report, Metro Manila was already home to 2.8 million informal settlers…that’s 556,526 families living in improvised housing communities commonly referred to as shanty towns and often lacks property sanitation, safe water supply, electricity and other basic human necessities.

With very limited opportunity for livelihood, heightened military conflict and unabated poverty continue to wreak havoc in the countryside, it is estimated that around 200,000 annually troop to the National Capital Region hoping for a better life and preferring to be tag as informal settlers rather than risked being impoverished in their hometowns.

 

The National Urban Development and Housing Framework (NUDHF) 2009- 2016 finds the housing problem to be serious and is a largely urban phenomenon. The magnitude of housing need, defined as the housing backlog plus new households, is enormous and is estimated to reach about 5.8 million housing units. That is the official figure.

My unofficial estimate having been actively monitoring the sector for close to 29 years is roughly hovering between 7 to 8 Million backlog.

And the gap is widening. Annually it is estimated that close to 500,000 new homes are needed to address the current housing need. Homebuilders can only supply anywhere from 20% to 22% of the unmet need.

CREBA, in its recent National Convention in Baguio City where I moderated the proceedings cites very disturbing figures and I quote its President Charlie Gorayeb:

“The 5.5 million housing backlog is too huge to be ignored. It threatens to balloon to even bigger proportions if supply and access continue to fail to cope with the consistent rise in demand as a result of population increase, rapid urban migration, and affordability gaps, and other factors. The nagging housing problem transcends many other facets of the nation’s over-all economic and social development. 

Overcoming this condition will require the application of innovative government approaches coupled with creative strategies by the private sector. “

Housing and Urban Development Council’s Housing Sector: Accomplishment Report?

 HUDC’s Report for the period July 2010 to December 2015 showed that the housing agencies provided housing assistance to 894,569 families valued at P313.607 billion.  The assistance includes the provision or funding of house and lot packages, developed lots, houses, or home materials for home improvement/repair.

In addition to the direct housing assistance provided by the key shelter agencies (National Housing Authority, Social Housing Finance Corp. and Home Development Mutual Fund) the Home Guaranty Corporation (HGC) guaranteed P222.026 billion worth of housing loans extended by private commercial and rural banks as well as other financing companies equivalent to about 127,500 housing units.

But are these numbers enough? Does HUDCC have the power to effect real change?

CREBA’s 30 Year Old Housing Advocacy: Is the Government Listening?

A Roof Over Every Filipino employing its five-point agenda, CREBA believes, is the most effective, doable and strong package of reforms that works to the benefit of government, the home buying public and the private sector.

It is so designed to bring about permanent and far-reaching solutions to our current and future housing problems as opposed to palliative roadmaps which address only the peripheries of the housing situation but not its core.

Yet, the housing sector continues to suffer heavily from administrative, structural and regulatory delays under various levels of government, from the national agencies down to the barangays. Five Presidents and this advocacy still remains a pipe dream.

HLURB LICENSE TO SELL ISSUED FOR RESIDENTIAL PROJECTS IN UNITS (2001-2014): A Glaring Imbalance 

HOUSING PACKAGES TOTAL UNITS %
Socialized 616,123 32%
Economic 687,377 36%
Mid-Cost & Open Market 619,347 32%
TOTAL 1,922,847 100%

Source: Housing and Land Use Regulatory Board (HLURB) 

From 2001 to 2014, the HLURB issued Licenses to Sell to less than 2 million housing units, covering all housing segments, from socialized up to the open market group. This performance rate, averaging about 130,000 housing units per year, is hardly enough to bridge the widening housing demand and supply gap.

Despite all these, however, homelessness, unauthorized housing and lack of decent housing remain to be a major headache.

Why?  What has been the problem?   Where, how and why did the programs fail?

The Philippine Housing problem has become a social malaise, a clear injustice to those who have less in life. Without a roof over one’s head, it strips a person naked and robs him of his dignity to a decent life.

If we continue to ignore this boiling point, Metro Manila will have “shadow” cities comprising millions of informal settlers soon. It is now a race against time. (esoriano@wongadvisory.com)

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Prof. Soriano is a National Agora Awardee for Marketing Excellence, an ASEAN Family Business Advisor, Book Author and Executive Director of ASEAN-based Consulting group, W+B Strategic Advisory. He has close to three decades of real estate experience and is currently the Program Director for Real Estate at the ATENEO Graduate School of Business 

 

Professor Enrique Soriano

Professor Enrique M. Soriano is the Chair and Professor of Global Marketing at the Ateneo Graduate School of Business. He has held key positions in a number of Asia – based corporations such as Group CEO of the Belo Medical Group, CEO of Intelligent Skin Care, Inc., Chairman of publicly listed Empire East Suntrust Developers, and Country President and CEO of Singapore based Electronic Realty Associates, Inc.

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