16 August 2016
Keynote Address at the Housing Solutions Congress, SMX Mall of Asia, Convention Center, Pasay City
I am very pleased that all of you have come here today, to address a problem that is critical at both the individual and the public level. The value of a home is felt most deeply by the father who cannot protect his family from storms and floods, by the mother whose kitchen hangs over the estero, and by the child who walks home from school in the rain.
However, to all of us who are living in a city imploding with a growing population such as Manila and other cities around the country, sustainable housing solutions are also critical to finding answers to the issues of security, traffic, environmental sustainability, and fiscal constraints, among other things. We have to build houses for the poor with sacred taxpayers’ money and our taxpayers are mostly the poor themselves. Housing is a very personal and very public crisis.
In 2011, a survey by the National Housing Authority showed that there were 1.5 million informal settler families in the country, 52% of whom were living in danger areas mostly outside Metro Manila.
Preliminary figures gathered by the Housing and Urban Development Coordinating Council in 2015 from Local Shelter Plans of local government units show that the ISFs have since increased to 2.2 million. This, despite the one million housing units subsidized by the government since 2010.
From 2011 to 2016, the total housing backlog could reach 5.7 million, a result of accumulated need and future or recurrent need. If you divide the projected backlog of 5.7 million by the number of days in six years, you will find that we need to build 2,602 homes per day in the next six years. And the clock is already ticking.
Let me state the obvious. The problem we are faced with is urgent, huge, and difficult. The housing crisis is a ticking time bomb. The only way we can solve it is together. That is why your presence here gives me much hope.
We must work with haste, but the worst thing that we can do is to move fast in the wrong direction.
That is why a comprehensive road map that is based on accurate baseline data, global best practices, public and private financing solutions, and stakeholder consultations is critical to our success.
When I say consultations, ladies and gentlemen, I don’t just mean getting inputs from key shelter agencies and developers. I mean giving the people themselves who are going to occupy the homes a seat at the table.
Let’s tackle the need for information first. Without the right data to guide us, we will be running blind and wasting money.
We need an inventory of all government properties available for housing. We will need the cooperation of all local government units for this.
We will need to revisit the calculation of 5.7 million families. How many are in Metro Manila and other cities. How many are in the countryside?
Number two is finding the right model that can address our unique needs. We are looking at the approaches used by Singapore, Hong Kong and Thailand. There are also innovations already in place in Quezon City and Valenzuela that resulted from partnerships between the private sector and the local government.
In Quezon City, for instance, informal settler families (ISFs) used to pay anywhere from 1,500 – 3500 pesos a month to dwell in a 10 sqm space with no proper sewerage and drainage system. Through Phinma’s partnership with the Quezon City government, Pag-ibig Fund and several partner NGOs, ISFs today shell out only a little bit more than P2,000 as monthly amortization through Pag-Ibig for decent 26 sqm homes with loft provisions that have proper sewerage and drainage and security of tenure.
In Valenzuela City, they used the concept of public rentals. You may know of other local models we can use. Our office is open to all suggestions and we are looking forward to creating a comprehensive road map that takes into account even indigenous building concepts that work.
No one has monopoly of great ideas and our role here is to listen and to bring all stakeholders together for solutions that will truly wipe out our housing crisis within six years.
Budget, of course, will be a problem. Over the years, only 1% of the government’s total budget has been used for public housing. That is, except in 2011 to 2016 when the government set aside P50 billion for housing projects.
Lack of funding is a hard reality, but it should never be a reason for us to turn away from this work.
It is also imperative that we streamline the processes, both in the demand and the supply side. First, we will make it a lot easier for beneficiaries of public housing to process their papers. At the moment, they have to get so many papers signed in so many different offices.
We are looking at a one-stop-shop concept where they only go to one place and much of the paperwork will be done by the shelter agencies themselves. Government works for the people, and not the other way around.
Second, we also aim to shorten and sweeten the process for our private sector partners. Very few developers find socialized housing attractive because the process is long and tedious. There are many things that can be simplified without reducing proper controls and setting aside prudent guidelines.
We understand that two years is too long for many of you! That’s going to change. We also understand that some tax breaks are in order to make it worthwhile for the private sector to go into socialized housing.
However, take note that our metrics for measuring success will also be tougher. The time to count houses is over. Look at all the housing projects that are empty of happy families!
From now on, the success of each project will be determined by how many families are happily living in their own homes and how many communities have been provided with a better way of life.
To all of you here who can hear my voice, remember to build communities, not just houses. We want communities with access to water and electricity, as well as public libraries and clinics. We want communities where fathers and mothers can find jobs, and children have spaces for play.
Where schools and places of worship are nearby. So we are prioritizing on-site, in-city developments. If that’s not possible, it must be off-site, but in-city. The third priority is off-city.
Ladies and gentlemen, we will stop looking at the housing crisis as simply a matter of building houses. The words “Urban Development” have been included in HUDCC for a reason. All of our housing projects must blend seamlessly with the development in the area. It must be a total-package-solution. Otherwise, we might as well not do it.
We will not relocate families if the homes waiting for them are not total solutions to shelter needs. That means there will be no demolitions. You may also be interested in our plan to aim for stiffer penalties to squatting syndicates.
A few weeks ago, I went to a huge relocation site in Calauan, Laguna. There is no potable water and no jobs. Fathers spend P280 per day to go to their place of work. If they are earning P480 per day, how much money remains for them to buy food? Where is the rhyme or reason for this? Where is the right to property and liberty of abode, listed under our Bill of Rights?
Failure to do our jobs will also mean huge social ramifications. Those who were relocated from the Pasig River Bank could not find work where they now live, so they go back to Pasig and leave their families behind. They go home once a week.
Some of them don’t go home anymore. Families are broken. Teenagers get pregnant early. Our social fabric is being torn apart as I speak. We don’t want this on our conscience.
All these may require disruption and innovation, both in the key shelter agencies and our private sector partners. For us in government, the mandate to serve our people is clear. Government must work for the people and not the other way around. For the private sector, now is the time to create business models that address social needs.
Understand that this is not charitable work. Disrupt and innovate so that you create business models that make you rich, no longer at the expense of the poor, but to help the poor.
In other countries, companies bring the assembly line to the people in relocation sites. Mothers can make penholders and cuddly teddy bears where they live. That is disruption and innovation that works.
Here’s why changing the way we do things is important. Research has shown that building nations where everyone can live and thrive and enjoy the benefits of economic growth is the best way to create even more growth. Inclusive growth is not just critical for those in the fringes of society that we have vowed to serve, but also for your businesses to grow sustainably.
Profit should no longer be your sole driver for growth. Shared value should be. When there is shared value, progress happens at the top and at the bottom of society at the same time.
Our country is at the cusp of something huge, as we are currently going through a demographic sweet spot. This sweet spot, where majority of the population is expected to reach their most productive stage, is the same demographic trend that caused economic growth spurts in the economies of South Korea, Singapore and other Asian economic tigers.
We are poised to harvest the same growth from our demographic story, but only if we create growth that benefits the bottom and the poor.
Companies that build homes have a unique role in this development story. Homes have a direct impact in the way families feel safe, children feel secure and study for school, and parents get enough rest for a productive day at work, and experience the benefits of progress.
Your work matters a lot to our nation. So let’s do our jobs and do our jobs well.
Together, we will build a strong nation through happier homes.
Thank you all for listening to me today.