2nd National Convention of the OSHDP - HUDCC

26 August 2011

Speech-OSHDPAddress of Sen. Ferdinand “Bongbong” Marcos, Jr.
The 2nd National Convention of the Organization of Socialized Housing Developers of the Philippines-Housing and Urban Development Coordinating Council (OSHDP-HUDCC)
Holiday Inn Hotel, Mimosa Leisure Estate
Clark Freeport Philippines, Pampanga
August 26, 2011

Good afternoon, colleagues from Organization of Socialized Housing Developers of the Philippines (OSHDP) and thank you for having invited me this afternoon as your guest of honor and speaker on the occasion of your 2nd National Convention, in partnership with the Housing and Urban Development Council (HUDCC).

Let me take this opportunity to update you, private developers of social housing for the poor, on the salient features of our Senate Bill: An Act Creating the Department of Housing and Urban Development.

As you are all aware, there are three proposed versions in the Senate. One was authored by our recently resigned colleague, Sen. Migz Zubiri and the other two by Sen. Frank Drilon, and Senate President Pro-Tempore Jinggoy Estrada. All these mentioned three bills seek “to address the absence of an adequate and coherent institutional framework that will enable a holistic management of the housing and urban development sector, address the weakness of the present set-up and define the horizontal and vertical relationship of the department with the other government agencies and local government units.”

As a point of reference, let me summarize to you the lessons we have learned from previous efforts to provide housing to all, especially to the more needy and poorer segments of our society:

1. Cost recovery efforts must be well formulated and implemented. Historically, housing projects were carried out by national government agencies which had encountered numerous problems. Other than having high overhead costs and major reblocking issues, NHA, for example, had poor collection performance. Despite low cost recovery efforts, however, Micro Finance Institutions (MFIS) have shown from their experience that the poor can save and, given appropriate social intermediation and properly tailored collection schemes, they can likewise repay their loans. Loan repayments promotes beneficiaries’ self-worth because they have bought their houses on their own and are proud that they are recipients of not mere dole-outs;

2. Private sector participation can contribute significantly to the urban poor housing. Despite the increasing demand for housing for the poor, there is little or no participation of the private sector in this activity. This is partly due to the fact the private sector cannot compete with the subsidized interest rates that the government charges through its programs. But government subsidy is just not sufficient to make public housing affordable for most poor families.

It is therefore necessary to encourage the private sector to actively participate in the pro-poor housing projects, not only in providing the basic utilities, but also either as developers of complete sites in fulfillment of the UDHA requirement to develop 20% of the total number of housing units for socialized housing, or to develop low-cost housing at market prices under a local government’s city-wide urban redevelopment/ affordable housing program that provides the proper incentives and can generate sources for subsidy.


3. Community participation is crucial in urban housing and redevelopment projects. A major repeatable lesson in urban housing projects is the involvement of the community. Previous studies, notable the step-up project of the Philippine Business for Social Progress (PBSP), have shown that involving community stakeholders not only develops in them a strong sense of ownership but also strengthens partnership between and among the different stakeholders. It demonstrates that people are willing to pay for services and pay back housing loans through well-managed community coaching and advocacy. To promote active community participation, housing issues and concerns as well as problems have to be identified and holistically addressed within the broader context of urban development;

4. Institutional reform and capacity building should be improved. Clarifying and simplifying the institutional responsibilities and public accountabilities of concerned agencies, and building their capacities, would promote effective assumption of assigned socialized housing functions at various levels of governance, most especially at the local government level, thereby improve housing delivery. It will also promote streamlining procedures such as land titling. Housing for the poor have constrained by lengthy and complex processes of land titling which result in excessive and burdensome transaction costs. Moreover, local governments have not had much experience in systematically addressing housing problems because housing, until the passage of the local government code and UDHA, had mainly been the responsibility of national government. While many local governments have initiated the formation of their local housing boards and the formulation of shelter strategies, the predominant view is that of the traditional role of “provider” rather than “facilitator” plus we have to face the stark reality that LGUs do not have the technical capability as there are really no honest-to-goodness housing experts in their respective localities this mindset needs to be changed, especially in the light of the keen competition for limited local resources and the fact that the private sector, including people’s organizations, are better equipped for community organization and mobilization which is essential to housing the poor;

5. Government housing finance programs are biased toward homeownership and use formal banking procedures that do not suit the conditions of the urban poor. Government housing loans are designed for homeownership and this usually involves large amounts with long-term mortgages. This works well for middle-income households, but not those with low-income whose conditions limit the amount that they can borrow as well as the length of time given to them for repayment. As the experience of the step-up has shown, poor families prefer smaller loans with shorter repayment periods. A more effective housing finance system is one that is able to provide appropriate forms of mortgages and shorter term credit for incremental housing, as well as housing on less-than-totally secure title;

6. Efforts at the national level often do not meet the needs and preferences of the targeted poor.

This is because effective programs can only be implemented at the local level, under a decentralized framework, where national agencies and private sector groups (including NGOs) work to support local government’s housing projects for the poor. Support from national government, aside from housing loans, can be in the form of matching grants for land acquisition and site development. Under this scheme, local governments identify and acquire the land where low-income housing is to be built, and national government provides grant funds or subsidized funds for the development of the site. Construction of the houses can either be through ngos (such as Gawad Kalinga or Habitat for Humanity) or by private developers.

7. Housing units are getting smaller and smaller. Since the passage of PD957 and BP220, the minimum lot sizes and floor areas of socialized and low-income housing units have gotten smaller and smaller, with affordability being used as the excuse. Currently, the minimum lot area allowed by BP220 for single-detached dwellings is 64 sq. mts.; 48 sq. mts. For duples; and 32 sq. mts. For row house. For the house itself, the current minimum floor areas are 22 sq. mts. For economic housing and 18 sq. mts. For socialized housing. While affordability is indeed a major consideration, the result has been congestion and unhealthy conditions both within the house as well as the community. Most housing units in the Philippines are single structures, which seem to be the preference, comprising almost 90 percent of the total number of occupied housing units. This, combined with small lots, decreases privacy and increases potentials for social conflict between adjoining houses. It also results in loss of green space for trees and plants, as well as congested streets since vehicles are on the streets or even sidewalks because the lots cannot accommodate them anymore. More innovative architectural design is required to combine the prerequisites of affordability, healthful living, privacy and a more pleasant community environment. Related to this, the current standards for lot sizes and housing unit floor areas need to be reviewed and rationalized.

Based on the lessons learned as first presented, we can conclude that current housing programs have fallen way short of effectively responding to existing housing demand, especially of the urban poor. We just have to admit the fact that accomplishments, as claimed by government, are far from satisfactory.

And this brings me to the urgent need to fast track the finalization of the senate bill that would give birth to the Department of Housing and Urban Development (DHUD). The creation of the DHUD will provide the core capacity required to improve sector governance and to address sector issues and challenges stemming from rapid urbanization, uncontrolled urban growth, increasing urban poverty, and a deteriorating urban environment. The department will enable the government to address these problems through the formulation and implementation of the necessary reforms, sector policies and program interventions that will mobilize public and private resources and ensure their synchronization.

It is because of the social bias of government that the philosophy of DHUD as emerged is best summarized in the proposed bill’s declaration of policies:

“the state shall, by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban development and housing which will make available at affordable cost, decent housing and basic services to under-privileged and homeless citizens in urban centers and resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the implementation of such program the state shall respect the rights of small property owners.

The state shall pursue the realization of a modern, humane, economically viable and environmentally sustainable society where the urbanization process is manifest in towns and cities being centers of productive economic activity, led by market forces; where urban areas have affordable housing, sustainable physical and social infrastructure and services facilitated under a democratic and decentralized system of governance; and where urban areas provide the opportunities for an improved quality of life and the eradication of poverty.

Urban or rural poor dwellers shall not be evicted nor their dwelling demolished, except in accordance with law.”

Ladies and gentlemen of the OSHDP, let me now make the nexus between your organization, OSHDP and the proposed DHUD. The OSHDP has a very noble vision of promoting human “dignity through decent affordable housing” among poor and marginalized Filipinos. You strive to provide more decent affordable housing that will allow you to earn while serving the poor and giving them human security, being the private sector representative and partner of HUDCC. It is heartwarming that your organization has been around to assist government in specifically addressing the housing needs of the poor and the marginalized. We not only hope but also encourage you to continue to expand your membership and influence, for the greater demand in housing is among the poor and marginalized citizens.

When the DHUD finally gets legally enacted and activated, the role of OSHDP as a private sector player and stakeholder shall be further enhanced. The urban centers throughout the nation are the continuing magnets for people from the rural areas, all wanting to try out their fortune in the modern urban centers. Therefore, the demands for affordable and decent housing will surely increase and more development funds will have to be mobilized to expand the social housing programs.

Please make sure that in your shelter programs for the poor, your approach will follow the track of a holistic human settlements paradigm. Let us be guided by the principle that housing communities must be provided with the needed basic services and utilities, including access to transportation, jobs and educational and health centers. I have seen many projects which were purely structural, i.e., the core shelters, and they were bereft of the basic utilities and services needed to live decently and humanely.

I believe that OSHDP is an active advocate of social change and I commend you for taking the lead in the formidable challenge of housing the poor. I do not want to sound repetitious and I believe it is also my role as chairman of the Senate committee on urban planning, housing and resettlement to urgently encourage you to continue and intensify your active participation in HUDCC now and in the DHUD when it is established and in operation.

As the examples of Gawad Kalinga and Habitat for Humanity and freedom to build show, when the poor possess their own decent housing and enjoy the very basic services and utilities, they start getting motivated to strive and earn better so that they can further expand and beautify their homes.

With the HUDCC as your partner, I am confident that the OSHDP will continue to be an effective agent of social change, especially in the housing and settlements sector.

And as chair of the committee on urban planning, housing and resettlement in the Senate, and having been an LGU executive myself in my capacity as former governor of Ilocos Norte, let me assure you that I completely understand the vast challenges and opportunities before all of us. And you can certainly always count on my continued assistance and support for your organization to attain its noble objectives of promoting human dignity through decent affordable housing among our underprivileged and marginalized poor!

Let us all move on! And as the saying goes, together we cannot fail!

Maraming Salamat at Mabuhay Kayong Lahat!