Luncheon Membership Meeting of the Rotary Club of Manila

15 September 2011

Speech-Rotary-Club-ManilaAddress of Senator Ferdinand “Bongbong” Marcos, Jr.
Guest of Honor and Speaker of the Luncheon Membership Meeting of the Rotary Club of Manila
Manila Polo Club
15 September 2011

To the officers and members of the premier and first rotary club of the Philippines, the Rotary Club of Manila. Let me thank you for having invited me this afternoon as your guest of honor and speaker as I find this a very opportune time to update you on the status of social housing for the poor and on the salient features of our Senate Bill: An Act Creating the Department of Housing and Urban Development (DHUD).

As time is of the essence, let me go straight to the meat of the topic assigned to me this afternoon.

As you are all aware, there are three proposed versions in the Senate on the creation of the DHUD. 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 and as I have repeatedly presented in various fora on the subject of housing and settlements, 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; lessons that we believe that we have to directly confront if we are to effectively get the housing sector on the move.

First, 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, furthermore, Microfinance 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. Dutiful loan repayments promote beneficiaries’ self-worth because they are conscious of the fact that they have bought their houses on their own and are proud that they are recipients of not mere dole-outs;

Second, 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 again we all know that government subsidy is just not sufficient to make public housing affordable for most poor families.

It is therefore necessary to encourage the private sector as I am doing before you, 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.

Third, as you are all aware in your respective professions and pre-occupations, 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, and certainly, you are among these stakeholders. It demonstrates that people are willing to pay for services and pay back housing loans through well-managed community persuasions 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 and settlement.

Fourth, institutional reform and capacity building should be improved. This means clarifying and simplifying the institutional responsibilities and public accountabilities of concerned agencies, and building their capacities. This would promote effective assumption of assigned socialized housing functions at various levels of governance, most especially at the local government level, thereby improving housing delivery. It will also promote streamlining procedures such as land titling. Housing for the poor have been 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, until the passage of the local government code and UDHA, housing 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 most LGUs do not really have the technical capability up to this date, 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 such as yours, are better equipped for community organization and mobilization which is essential to housing the poor;

Fifth, government housing finance programs are biased toward homeownership and use formal banking procedures that have been observed as not suitable to 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 for those with low-income whose capabilities 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. Thus, a more effective housing finance system should be 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;

Sixth, 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, the role of local governments is to identify and acquire the land where low-income housing is to be built, and national government takes on the role of providing grants in aid 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.

Seventh, housing units are getting smaller and smaller! Since the passage of PD 957 and BP 220, the minimum lot sizes and floor areas of socialized and low-income housing units have diminished in size, with affordability being used as the excuse. Currently, the minimum lot area allowed by BP 220 for single-detached dwellings is 64 sq.mts.; 48 sq. mts. For duplex; and 32 sq. mts. For row housing. 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 naturally been congestion and unhealthy conditions, both within the house as well as in the community. Most housing units in the Philippines are single structures, which seem to be the predominant preference, comprising almost 90 percent of the total number of occupied housing units. This, combined with small lots, decreases privacy and increases potentials for unnecessary and petty social conflict between and among neighboring houses. It also results in loss of green space for trees and plants, as well as in congested streets since vehicles are parked on the streets or even sidewalks because the lots can no longer accommodate them. More innovative architectural design is required to combine the prerequisites of affordability, healthful living, privacy and a more pleasant community atmosphere. Related to this, the current standards for lot sizes and housing unit floor areas need to be reviewed and even rationalized.

Based on the lessons learned as I have just revisited, 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 establishment of said 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, most importantly, 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.”

Friends and government colleagues in the Rotary Club of Manila, let me now make the nexus between your organization and the proposed DHUD. The rotary movement has always been identified with the very noble vision of promoting human “dignity through decent affordable housing” among poor and marginalized Filipinos. As leaders of your respective professional and business organizations, you are looked upon to strive to assist in this nationwide effort to provide more decent affordable housing that will allow you to fulfill your social responsibility to serve the poor and give them human security.

It is indeed fortunate that i have been given the chance this afternoon to present before you the housing needs of the poor and the marginalized. The members of my senate committee not only hopes but also encourages you to expand the mental horizons of your membership in the country’s need for socialized housing and to assist comprehensive efforts to solve the greater demand for housing among our poor and marginalized citizens.

Let’s face it, 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 needless to say, more development funds will have to be mobilized to expand the social housing programs.

Please make sure that in your role and social responsibility to help the poor and the needy improve their lot in life, you are expected to be in synch with government’s approach that follows the track of a holistic human settlements paradigm. As professionals, business leaders and government officials, let us be guided by the overriding 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 housing 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. In short, such projects did not serve the basic human needs of the families therein.

I believe that the rotary movement is an active advocate of social change and i also believe that you all will take the lead in assisting government and other sectors of our community and country in the formidable challenge of housing the poor. I do not want to sound repetitious. But I believe it is also my role as chairman of the Senate Committee on Urban Planning, Housing and Resettlement to urgently encourage you all to continue and intensify your active participation in the dynamic efforts toward the establishment of the HUDCC now and in the urgent initiatives of the DHUD when it will have been established and already in operation.

As the examples of Gawad Kalinga and Habitat for Humanity and freedom to build have demonstrated, 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.

And again 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 and now also chairman of the Committee on local government, let me assure you that I completely recognize the vast challenges and opportunities before all of us. Indeed, you can certainly always count on my continued partnership with your organization to attain the country’s noble objective of promoting human dignity through decent affordable housing among our underprivileged and marginalized poor!

Together, let us all move on in this advocacy for housing! And as the saying goes, together we cannot fail!

Maraming Salamat at Mabuhay!