Crossroads (Toward Philippine economic and social progress)
Philippine Star 11 April 2018


The housing industry is a driving force for economic growth in many countries. This is most especially true in the case of construction for sheltering the bulk of the country’s workforce in affordable housing units.

Housing for low income earners. In the course of years of development, this sector of housing construction has not been fully exploited for the country. The government has not succeeded in creating a viable program of sustained housing construction for the common worker. Other developing countries, especially in our region of East Asia, have been undertaking such programs and these programs have become part of their stimulus for sustained economic growth.

The construction of affordable housing for many of our common workers has been left mainly to the private sector to fill up. Because housing for the well-to-do is much more profitable than building for the poor – both in terms of administration as well as in turning over the amortization of the unit once lived in – the private sector has mostly concentrated on building housing for those that can afford to pay for them.

In the meantime, the government has not succeeded in providing housing for workers who have steady employment. The cost of housing to low income but steadily employed workers as a result is prohibitive. Their housing need has been neglected.

Much of the government’s efforts in low cost housing have been in supplying housing for squatter resettlement projects or housing units for victims of natural calamities (such as damage from fire, flooding, and earthquake).

All this indicates that the government has been unable to take a major leadership role in building housing supply for occupancy and amortization by the relatively poor, but steadily working people.

The essentials for a sustained housing program are present but… In general, the government has already put in place many of the institutions that are essential in providing for a housing program that benefits the masses of working men.

For instance, the essentials of pension programs are in place – the Government Service Insurance System and the Social Security System, as well as the Pag-Ibig housing fund contributions for employed workers. These programs are the basic foundation for providing the savings for homebuilding in many societies.

These programs generate savings from the worker payroll, but they have not been fully directed to support the housing program for workers.

Early in its development program, Singapore was able to undertake a housing program mainly for income earners in the country. The basic tool for creating demand for housing was the provident fund of workers, which was essentially their version of the Social Security System. Because of the strong participation of the government in land estate consolidations and using these for constructing shelters for the working class, the program succeeded incrementally in building a large stock of housing supply for the working class.

Strong government participation in facilitating property estate developments for worker housing has been an ingredient of success in other countries. This has not been the case in our country, for much of land consolidation in urban areas has been ceded to the private sector’s efforts.

Essentially, the profit motive was the driving force for the private sector. Under this setup, and without any strong government presence in the market for land, success meant that lands would be developed mainly – and therefore controlled for land banking – by the private sector.

But years of development in the country has shown a worsening of the housing situation for the large bulk of the population. The housing for the working class and for middle income families has not kept pace with the progress of the economy. The general housing conditions of the common worker, among government officials and the general workforce, has become in general worse. Housing provides a clear-cut indication of the divide between rich and poor in the country.

New supply of housing units has risen as provided by the private sector. But most of the units constructed are for those with high income. In the meantime, housing areas among the working class has become more cramped.

Hence, in recent years, we see the rise of many condominium buildings and high rises in Metro Manila and some other growing cities in the country, but these units are being bought by those with high income (including many OFWs and foreign buyers who are seeking housing accommodations in the country, even as the country is enjoying a building boom lately, which includes the building of housing for those who can afford expensive units.

Of course, communities where a house and lot is the prevailing motif for housing provision have also grown. There is a wide gap in the housing supply that is built for those with high income and for those who can only afford the cheapest housing units. Inexpensive housing fit mainly for the low income earner are often in far-away locations, which also means high transport cost to work.

NHA’s failure. The National Housing Authority should have been the lead agency to help initiate a program to provide affordable housing for gainfully employed workers – both in the private sector and in the government. These are people with steady employment and with income to help pay for their housing amortization.

Instead NHA has been bogged down in projects that provide highly subsidized housing. It receives budget allotments to support the programs of housing construction which the recipients cannot fully help to pay because they are poor and intermittently unemployed.

The investigative report of Ted Failon (ABS-CBN) on NHA’s housing projects last Sunday tracked the projects designed to help the victims of recent natural disasters such as Yolanda and Sendong.

Also, the Commission on Audit (COA) Performance Audit Report (PAO 2017-02) entitled, In-City Housing Development Program is a report on the problems of the projects to build housing units to help transfer vulnerable residents located in waterways, esteros, and river banks.

Both reports reveal the many inadequacies and the failure of the NHA.