Update on Housing Legislation

24 August 2012

Speech-Update-on-Housing-LegislationSpeech of Senator Ferdinand "Bongbong" R. Marcos Jr.
Chairman, Senate Committee on Urban Planning, Housing and Resettlement
OSHDP-HUDCC National Covention
Grand Ballroom, Acacia Hotel, 5400 East Asia Drive cor. Commerce Avenue, Filinvest Corporate City
Alabang, Muntinlupa City
24 August 2012

Hon. Rodolfo Valencia, Engr. Jefferson Bongat, National President of the OSHDP, Mr. Santiago Ducay and Mdme Marie Leonor Fatima Vital, Co-chairs of this 3rd Convention of the OSHDP, (mention other guests)
Friends, Ladies and Gentlemen: Good Afternoon.


Thank you once again for giving me the privilege to speak before your organization today as you had done so at the Holiday Inn at Clark Freeport in August last year for your 2nd National Convention of Socialized Housing Developers of the Philippines Inc. Thank you also for giving me the opportunity to update you on the various efforts being undertaken at the Senate in the area of housing and urban development.

I have to admit that speaking before you once more today on a very critical topic like socialized housing makes me alert but at the same time comfortable. Alert, because the recent weather disturbances here in Luzon that have caused major problems and issues affecting a majority of our countrymen, notably the informal settlers which have resulted in mammoth resettlement problems, have elevated the concerns of the Senate on the required and urgent legislative measures and solutions that have to be crafted.

And I feel comfortable discussing these issues with you, since the Senate Committee on Urban Planning, Housing and Resettlement of which I am the Chairman- has recently succeeded in passing a Housing Bill that shall address the problems, issues, solutions and assessments of the overall shelter program of the national government including the resettlement problems and related concerns brought about by the series of recent calamities.

Allow me then to report to this assembly that after months of the usual bureaucratic requirements of successive hearings and consultations, not to mention the six month impeachment process, the Senate Committee on Housing and Urban Development had finally presented to the Senate Plenary the final Senate version of the bill that was approved by the same body on July 24, 2012 on its third and final reading creating the Department of Housing and Urban Development. This Senate Bill No. 3199 is essentially a refined version of five draft bills earlier proposed by three Senators and by the HUDCC. The Bill has been crafted and finalized after discussions and consultations with concerned agencies of the executive departments and the private sector represented by real estate developers, housing associations and other concerned NGOs and Peoples’ Organizations.

I. Anthology of Housing Laws and Executive Issuances

But before we get lost in the euphoria of this a new Senate Bill, let me remind you that the TWG branches of the government have a long history of legal measures related to housing. Please be aware of the executive issuances and legislative history of national government efforts in finding the institutional structure and appropriate policies, programs and projects to promote housing and urban development. Let me indulge you in a brief narration of these legislative and executive milestones:

1. First we have P.D. 772 dated Aug. 20,1975 which declared squatting as “a criminal” undertaking under Section 1 which I quote “Any person who, with the use of force, intimidation or threat, or taking advantage of the absence or tolerance of the landowner, succeeds in occupying or possessing the property of the latter against his will for residential, commercial or any other purposes, shall be punished by an imprisonment ranging from six months to one year or a fine of not less than one thousand nor more than five thousand pesos at the discretion of the court, with subsidiary imprisonment in case of insolvency”.

2. Then came P.D. 1396, issued June 2, 1978. This is perhaps considered the most controversial legal issuance on housing. This decree created the Ministry of Human Settlements (MHS), abolishing at least 10 existing government agencies involved in housing and squatter issues, integrating some of them and establishing new agencies that dwelt on urban development and shelter finance. But in addition to housing concerns, the MHS focused on the development of a comprehensive physical framework plan for the country for the 25 years following the issuance of the decree through the improvement and revision of existing land use maps and zoning ordinances. The Ministry likewise reoriented traditional land and townships development through a holistic approach of identifying, offering and delivering 11 basic needs and services to the settlements or communities, namely, housing, water, clothing, livelihood, electricity, health, education, culture, technology, ecological balance and sports and recreation.

3. On December 17, 1986 Executive Order No. 90 was issued by President Cory Aquino. This E.O. effectively abolished the MHS and, in its stead, established the Housing and Urban Development Coordinating Council (HUDCC) under the Office of the President. The HUDCC became the highest policy making and coordinating body on shelter and urban development. It assumed most of the powers of the MHS as regards shelter and urban development. However, this evolution resulted in reducing its focus on the preparation of land use maps and completely ignored the holistic approach of delivering the 11 basic needs.

Unfortunately, though the head of the HUDCC was given a cabinet rank, he was never made a member of NEDA. Consequently this set up eventually led to the subjugation of most of its policies to other national priority programs with NEDA representation.

4. Then Republic Act 6846 dated Jan 24, 1990 was issued, creating the Abot-Kaya Pabahay Fund (AKPF) otherwise known as the Social Housing Support Fund Act. The Fund was aimed to provide amortization support, expedite the development of land into suitable sites for social housing by providing developmental financing to developers of low-cost housing projects, and by establishing a strong guarantee system to ensure viable cash flow for the funding agencies involved in housing.

5. Two years after came Republic Act 7279 (of 29 March 1992), otherwise known as the Urban Development and Housing Act of 1992 (UDHA) or popularly identified as the “LINA LAW” which sought to provide social housing to the marginalized sector by addressing their access to land and housing, relocation, demolitions, and promoting private sector participation in housing. The law also mandated local government units to provide shelter to qualified beneficiaries and to undertake measures to curtail the activities of professional squatters and squatting syndicates. In addition, the Act also prescribed the formulation of a National Urban Development and Housing Framework to guide policymakers in the determination of areas for urbanization and development of concomitant programs to address problems of urbanization.

The law likewise provided for the institution of a Community Mortgage Program (CMP)-- a mortgage financing program of the National Home Mortgage Finance Corporation aimed at assisting legally organized associations of underprivileged and homeless citizens to purchase and develop a tract of land under the concept of community ownership. The primary objective of the program has been to assist residents of blighted or depressed areas to own the lots they occupy, or where they choose to relocate to, and eventually improve their neighborhood and homes to the extent of their affordability and capability.

6. Subsequently, Executive Order No. 71 (of 23 March 1993) was issued, devolving the powers of the Housing and Land use Regulatory Board to approve subdivision plans to cities and municipalities pursuant to Republic Act 7160, otherwise known as the Local Government Code of 1991;

7. Shortly thereafter, Executive Order No. 129 (of 15 October 1993) followed, which established an institutional mechanism to curtail the activities of professional squatters and squatting syndicates and intensifying the drive against them;

8. Next came Republic Act 7835 (dated Dec 16, 1994) which provided a Comprehensive and Integrated Shelter and Urban Development Financing Program that included (i) land acquisition and site development by the National Housing Authority to generate serviced home lots for families displaced from sites earmarked for government infrastructure projects, those occupying danger areas such as waterways, esteros, railroad tracks and those qualified for relocation and resettlement assistance under Republic Act No. 7279; (ii) implementation of cost-recoverable socialized housing projects in selected urban and urbanizable areas in all congressional districts pursuant to Republic Act No. 7279; and (iii) organization of community associations under the Community Mortgage Program to acquire tenure and ownership of the land they are currently occupying as against the interests of landowners where financing at very low interest rate is granted to beneficiaries to purchase the land as a whole and with the responsibility to improve the sites;

9. Thereafter, Republic Act 8368 dated Oct. 27, 1997 was enacted under the Ramos Administration otherwise known as the Anti-Squatting Law Repeal Act of 1997, which repealed PD 772. This law authorized the dismissal of all pending cases that drew upon the provisions of the repealed PD 772. It also directed criminal cases against squatters to defer to the provisions of an earlier act-- RA 727 or the UDHA-- law which stipulated sanctions applicable to “professional squatters” defined as “individuals or groups who occupy lands without the express concern of the landowner and who have sufficient income for legitimate housing. The term shall also apply to persons who have previously been awarded home lots or housing units by the Government but who sold, leased or transferred the same to settle illegally in the same place or in another urban area, and non-bonafide occupants and intruders of lands reserved for socialized housing; and

10. Under the GMA Presidency Executive Order No 272 dated Jan 20, 2004 was signed creating the Social Housing Finance Corporation as a subsidiary of NHMFC. It became the lead government agency to undertake social housing programs that would cater to the formal and informal sectors in the low-income bracket and made to take charge of developing and administering social housing program schemes, particularly the CMP and the AKPF Program (amortization support program and developmental financing program).

In brief, my friends, you will appreciate that over the past 30 years, the executive and legislative undertakings covering shelter and urban development can be thought of as aggressive, comprehensive and yet noticeably wanting in matters concerning the poor and the informal settlers.

Thus this forgoing anthology which I have just presented confirms the conclusion that housing has indeed come out as the most regulated sector of the country.

I. Senate Bill No. 3199
Now, allow me to talk on Senate Bill No. 3199. Most recently, a popular clamor for institutional reform in the housing sector had intensified especially among concerned private sector groups, the academe and government policy makers. Specifically, the focus of their concerns revolved on the need to reorganize, strengthen and reintegrate the different government shelter agencies and their corresponding functions that would result in the formulation of a more cohesive, responsive, coordinated and focused approach in promoting and developing sustainable communities with affordable and accessible shelter plus minimum human security services, utilities and livelihood opportunities.
This pro-active concern then had evolved into one basic advocacy – the creation of a Department of Housing and Urban Development (DHUD)—“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.”

Pardon my bias, but ever since this alternative proposition had been presented to my Committee, I took on the firm belief that this effort is simply a positive attempt to revisit and reconsider what the MHS programs all along had been espousing. Needless to say, I do appreciate and I am personally happy about this policy development. I have to declare that with this move to intensify the measures to create the DHUD, we have indeed gone full circle.
As I reported to you in your second convention, there were three Senate versions of bills proposing to create this Department. As early as February last year, the Senate Committee on Urban Planning, Housing and Resettlement under my chairmanship has been holding hearings to discuss these proposals. The HUDCC had also presented its own version and the Senate Committee on Rules likewise presented its interpretation of the submitted provisions.


III. SENATE BILL No. 3199 in relations to Socialized Housing
We are now awaiting the version of the House of Representatives so we can discuss the two bills in a bicameral meeting. Hopefully, there will be no serious obstacles and both Houses will come with up with a solid agreement on the final bill for the President’s signature.

At this juncture you might ask:

What provisions in this bill are so significant to affect the socialized housing industry which merits our attention and concern?

The answer lies in the three major provisions of the Bill as follows:

Firstly, the stated declaration of policies provides the socio-economic philosophy of the Bill. I know I have relayed this declaration to you even before, but allow me to restate the policies once again and I quote:

“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.”

As members of the OSHDP, the last foregoing sentence will surely catch your attention.
Having reread the underlying philosophy of the bill before this assembly, I believe that the stated declaration completely and satisfactorily describes the intent of the Senate in passing this bill on housing and urban development.

Secondly, in order to give substance and implementing mechanism to the above stated philosophy, the Senate Bill proposes to create a Department of Housing and Urban Development, thereby abolishing the Housing and Urban Development Coordinating Council created under Executive Order No. 90 series of 1986, and effectively transferring its functions and powers to the proposed Department.

Thirdly, the powers of the Housing and Land Use Regulatory Board (HULRB) are likewise transferred to the Department except its “Adjudicatory” functions. Effectively, the Bill mandates that the HULRB shall be reconstituted as the Human Settlements Adjudicatory Commission, making it an independent commission attached to the Department exclusively responsible for its “adjudication” functions. Its nine (9) full time Commissioners shall have the rank equivalent to that of the Associate Justice of the Court of Appeals and shall hold office for six (6) years. The remaining Key Shelter Agencies (KSA) shall be attached to the department and shall maintain and continue implementing their respective charters through their Board of Directors, except that the Secretary of the Department shall automatically sit as the ex-officio Chairman of each Board.

Essentially, by merging the Housing and Urban Development Coordinating Council (HUDCC) and the Housing and Land Use Regulatory Board (HLURB), the proposed Department of the Housing and Urban Development shall act as the primary national government entity responsible for the management of housing and urban development in the country. It shall be the sole and main planning and policy-making, regulatory, program coordination, and performance monitoring body for all housing and urban development concerns.

IV. Future Legislative Agenda as I see It.
Now that the main single legislative agenda for housing and urban development has passed the Senate Plenary, may I interest you on the other shelter concerns that your organization, the Organization of Socialized Housing Developers of the Philippines, Inc. (OSHDP) may perhaps consider in your planning activities.
These concerns are actually what I sincerely feel as the list of policies and issues that may require legislative intervention, if not cured or remedied by executive orders and issuances. In fact I consider them to be a very important part of our legislative agenda under the Committee on Urban Planning, Housing and Resettlement for the remaining years of my term in the Senate.

A. A National Resettlement Policy
Foremost in the agenda of my committee is the issue of a comprehensive national resettlement policy that shall include among others, a common framework for strategies on resettlement, the physical and operational implementation of involuntary settlements and the financial considerations demanded by such policy.

A. Let us for the moment pause to consider the massive involuntary settlements brought about by typhoon Gener and Helen and their predecessors with their accompanying refugee accommodations, locational spaces required to transfer residences of informal settlers, welfare requirements to buttress the immediate food and clothing needs and the infrastructural considerations for the relocation site and repair of existing utilities, roads and bridges, dams, school buildings and similar government projects.

Imagine the extent of flood damage from the Ilocos Region including Baguio down to Pangasinan and travelling along MacArthur Highway by-passing the entire Central Luzon and culminating in Metro Manila and finally Manila Bay. The overflowing floods along the Western part of Luzon was further aggravated by on rushing waters from the CALABARZON provinces with Laguna de Bay as the main catch basin. Although flood waters in many provinces and barangays have dried up, there are still a number of areas submerged in murky waters.

You may ask: what could be my intention in restating the consequences of these calamities when in fact we all have become fully aware of what we have seen on television and announced in radio stations and the print media.
My colleagues in the housing sector, The answer is fairly simple and obvious. We should realize by now the hundreds of thousands of urban and rural dwellers displaced by the floods that will need resettlement. Think for a moment of the enormous amount of funds the government has to raise to build relocation sites, repair badly damaged infrastructures and the huge manpower component to implement them. This is the main reason why in the beginning of my speech I declared that the enormity of the challenges before us has sounded an alert alarm in the halls of the Senate more particularly the Committee on Urban Planning Housing and Resettlement.

Against this backdrop, consider the preference of majority of these refugees to go back and stay-put in their old sites of residence despite the imminent and proven danger of similar floods to reoccur. The government has to force their evacuation and impose involuntary resettlement, if only to emphasize the greater problem of rescue operations.

It is the realization of the above considerations that I intend to direct my technical staff in full coordination with the new Department of Housing and Urban Development to study the legal and financial implications of such a huge problem, in particular, and the approach, framework, and strategy of the resettlement in general. This might entail the creation of a Resettlement Fund to cover expenses of the national government and the local government units.

B. Another issue that arises from these recent calamities situations outside of the financial requirements is the beneficiary coverage of the existing resettlement laws.

Under UDHA Act or the LINA Law, the underprivileged, homeless and informal settlers cannot be evicted from public or private lands without a valid court order and without proper consultation. The Act further requires the NHA and the LGUs as implementing institutions, to provide resettlement sites equipped with livelihood and basic services. A recent World Bank study however contends that the Act is just simply a “shelter or housing law.” The law does not give protection to the commercial properties of the affected. In most cases, their structures are illegal; hence they need NOT be compensated when dismantled. “Strictly speaking, informal settlers in public lands who simultaneously use their residences as places of commerce are excluded from becoming beneficiaries of the socialized housing program. The assumption is that owning a business, they have the means to meet their own housing. This rule is meant also to discourage professional squatting.”

Additionally, the study observes that the LINA Law is “SILENT on other vulnerable groups like those in rental housing, employees who have to quit their jobs or incur higher cost of transport and other expenses because their enterprises have to relocate elsewhere, and the daily wage employees who have lost income in the days when the enterprise has to close and transfer to another site.”

In the rural areas especially, outside of Metro Manila, which are affected by the involuntary resettlement alternative, the situation has taken on a worse proportion . Existing laws cover only agrarian reform beneficiaries, indigenous peoples, or bona fide tenants or agricultural lessees. The entitlements of the rural poor not so classified are limited only to compensation at replacement cost of the affected structures and improvement without security of tenure.

The beneficiary coverage of existing laws regarding resettlement needs to be re-evaluated and redefined. The compensation packages for urban and rural dwellers ought to be specified. These steps might require a separate Act to integrate the different preferences.

C. The presence of professional squatters in sites occupied by informal settlers has become a major problem and a hindrance to the delivery of socialized housing both by the government and the private sector. The proliferation of professional squatters can be traced to the disagreements between authorities (LGU and PNP) and the communities on eviction policies. Added to this is the tendency of the courts to issue restraining orders against the eviction notices. The court’s participation however is sanctioned by the LINA Law.

As provided in the Senate Bill, the new DHUD shall be vigorous in coordinating with the LGUs and the PNP in enforcing the eviction and resettlement laws to prevent the activities of squatter syndicates. The strict enforcement of property rights ought to be pursued in conformance with Civil and the Building Codes. The Courts should impose stiffer penalties on professional squatting. Likewise, the LGU and PNP must be better equipped to so as to be effective in sustained prevention and stoppage of squatting syndicates.

All these measures may not need legislative action. Perhaps, an executive order or redefined and strengthened IRR may suffice.

D. Some land management issues have surfaced in the turnover of lands proclaimed as socialized housing sites. These issues include among others, overlapping claims over one parcel of land, public lands titled in the name of an individual or occupied by settlers paying real property taxes to the LGU to justify ownership, lack of updated cadastral maps, land still titled to a deceased person and not yet extra judicially partitioned among the heirs and of course, the observed poor record keeping at the Register of Deeds.

The rationalization and integration of land agencies, including Land Management Board, Land Registration Authority and NAMRIA among others shall be authorized under a new Law to standardize the valuation and appraisal system and ultimately reduce transaction cost associated with land titling. The policy framework for all these efforts is the efficient and strict implementation of property rights.

E. A planning activity involving the NEDA and its adjunct agency – the Investment Coordinating Committee (ICC)—presents a procedural problem. As procedurally required by these two agencies, all major projects of the national government should submit feasibility studies to justify their inclusion into the funding pipeline of the government. Yet nowhere in these studies is included a Resettlement Action Plan just in case project implementation requires certain relocation/eviction/expropriation issues. Only Right-of-Way issues with their corresponding cost are usually incorporated. Understandably, no Resettlement Action Plan maybe included because in more ways than one, their added cost may adversely affect the benefit-cost ratio or the internal rate of return of the projects. The ultimate responsibility lies on the NHA which happens to be the main government agency implementing resettlement projects for national government. Since these resettlement costs are not anticipated and hence not included in the budgetary appropriations of NHA, the result is that project implementation is delayed. The case of the North and South Rail projects brilliantly exposed this situation.

The inclusion of Resettlement Action Plan in every major national government project shall be studied. DHUD as a new member of NEDA may present the case before the NEDA board and ultimately the ICC. An executive order may instruct the NEDA and ICC to incorporate the Resettlement Action Plan. Or perhaps a revision of the rule and procedure of the ICC may suffice.

Rental Law
F. The power to regulate housing rentals started in 1979 under the Batas Pambansa 25. It was amended by RA 9341 which extended the effectivity of the regulation until December 2005. In July 2009, RA 9653 was enacted extending the rental regulation until Dec 2013.

The current law authorizes the HUDCC (eventually the new DHUD) to compute and issue the applicable rent for the period. However, the law is silent on the proper agency that will enforce compliance.

Amendment of the Rental Law is necessary before the Dec 2013 deadline. In addition to the usual rate regulation, the proposed amendment should be specific on the agency that shall enforce compliance.
Criticism has been made that the current rental policy of the government actually discourages rental housing development because of the perceived government policy’s preference towards home ownership. This issue has to be taken into account in the drafting of the proposed amendment.

Financial Policies and Reforms
G. The Community Mortgage Program (CMP) created under RA 7835 is a mortgage financing program which enables urban poor squatters to be organized into a Community Association to purchase land where they choose to resettle. The National Home Mortgage Finance Corporation (NHMFC) through its subsidiary—Social Housing Finance Corporation (SHFC)—implements the program.

The performance records of the SHFC is very encouraging specifically its collection efforts. However, SHFC is just a subsidiary and it need a strengthened charter and increased capitalization to address the demand of informal settlers.

A legislative enactment is preferred to amend and strengthen the charter of the SHFC as well as increase its capitalization.

Friends in the Housing Sector, that so far is my initial list of shelter concerns that may require extensive research and possible legislative intervention. If you think that I am trying to impress you with this list, maybe you are not entirely wrong!

Ladies and Gentlemen, It is really my intention to lay before you the road map and direction of my thrusts in the shelter sector in the next three years. Just like last year, I wish to enjoin all of you to continue your advocacy for social change and your intensive quest for affordable and decent housing for the poor and the marginalized. The creation of the DHUD, I believe, shall be the start of our more dynamic partnership. Let me declare that I am always with you in your consistent, dedicated and committed involvement as a private sector player and stakeholder in the shelter programs of this country.

Let us all wish each other goodluck!

Maraming salamat po sa inyong lahat.

Mabuhay ang Sambayanang Pilipinas!!