In Focus Archived (January 2015)

Decent living spaces are a critical issue among the poor especially in urban areas. Many of them resort to informal or illegal housing, living in shanties, occupying other peoples land, or squatting in the most unsanitary places unimaginable such as riverbanks, streets, and bridges.

Inequalities in shelter deprivation and access to basic services are most evident particularly in cities where wealth and poverty exist in close proximity. Metro Manila alone is home to more than 4 million slum dwellers threatened by adverse congestion, substandard housing, and deteriorating environment. They suffer from various sickness due to their location and the limited infrastructure available. Effective town and shelter planning and urban infrastructure for people in underserved areas and informal settlements are thus critical first steps to their development.

Relocating informal settlers and victims of natural and human-induced disasters to safer areas is a critical challenge in the housing sector. The adverse impacts of climate change has made the relocation of families living in danger zones more urgent. Natural disasters also induce further relocation to cities, which can increase informal settlements.

The government through the National Housing Authority (NHA) has implemented resettlement projects since the 1970s as a major housing program for the low-income sector. An evaluation of the NHA resettlement programs between 2003 and 2011 conducted by PIDS senior research fellow Marife Ballesteros and senior research specialist Jasmine Egana showed that in-city projects, despite their higher costs compared to off-city projects, are more cost effective. In-city housing has higher long-term benefits given better chances of finding employment and more income-generating opportunities. The availability of land for relocation projects, however, is a crucial problem. For resettlement programs to be effective, land for socialized housing has to be made available by local governments or the national government especially in urban areas like Metro Manila. The authors also emphasized the need to study the feasibility of vertical development in in-city housing and for the NHA to improve the production process for incremental housing.

In 2011, the government released PHP 50 billion to the newly formed National Informal Settlement Upgrading System Program for informal settlers living in perilous areas in Metro Manila. Two years later, two major policy reforms were adopted due to the slow pace of its implementation. First is the NHA Enhanced Resettlement Package that increases the maximum cost of socialized housing units for off-city and in-city resettlements in order to build bigger and more disaster-resilient houses.

Second is the expansion of the financing program of the Socialized Housing Finance Corporation to include high-density housing (HDH). The HDH addresses the problem of limited land for socialized housing in urban areas by accommodating more families per unit of land which also promotes building of better houses and improved access to basic facilities and infrastructure.

Despite these policy changes, the overall policy intervention remains wanting. Ballesteros sums us an important shortcoming that needs to be addressed: The Philippines lacks a national policy on shelter development that integrates infrastructure, housing, and environmental concerns. The current approach to shelter is primarily on a per project basis instead of a city-wide shelter development. The absence of a city-wide approach creates difficulties for the national government and LGUs to address the housing problem on scale.

To know more about PIDS research on housing and inclusive growth, visit the SocioEconomic Research Portal for the Philippines. Simply type housing, inclusive growth, housing policies, poverty, rent control, housing and urban development land administration and related terms in the Search box.

  1. Economic Policy Monitor 2013: Addressing the Jobs Challenge toward Inclusive Growth

  2. The State of Philippine Housing Programs - A Critical Look at How Philippine Housing Subsidies Work

  3. Land Issues in Poverty Reduction Strategies and the Development Agenda: Philippines

  4. Housing policy for the poor: revisiting UDHA and CISFA

  5. Fiscal costs of subsidies for socialized housing programs: an update

  6. Benefits (and Losses) from Rent Control in the Philippines: An Empirical Study of Metro Manila

  7. Community-based approaches toward upgrading of informal settlements: Alternative strategies and recommendations for policymaking

  8. The Dynamics of Housing Demand in the Philippines: Income and Lifecycle Effects

  9. Rent control in Metro Manila

  10. Housing Subsidies: A Closer Look at the Issues