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Insights and Analysis

New Rules Right a Wrong in the Philippines

March 18, 2020

By Hygeia Chi

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Throughout Asia, unprecedented urban migration is putting pressure on housing. Like the megacities of Mumbai or Jakarta, the Philippine capital of Manila is now experiencing explosive growth as Filipinos flock there for new opportunities. The lack of decent, affordable housing has unfortunately forced many poorer migrants to crowd into makeshift dwellings in informal settlements. These urban shantytowns, typically of poor and unsafe construction and lacking even basic services, are also vulnerable to natural and man-made disasters that can lead to sudden, widespread displacement and homelessness.

The densely populated Quirino area of downtown Manila. (Photo: Conor Ashleigh / The Asia Foundation)


A right that has gone wrong

Shelter is a fundamental human right, but it is a right that has gone wrong in the Philippines. The Philippine government has projected a shortfall of 6.8 million homes for impoverished Filipinos from 2017 to 2022, including two million existing units deemed unfit for occupancy, and these numbers don’t include families who will be displaced by infrastructure development or calamities such as typhoons, earthquakes, or the recent Taal volcanic eruption.

Thousands of homes would need to be built every day to meet this demand. But this is not happening, as the Philippine government wrestles with budget constraints and the funding needs of competing sectors.

Much of the blame for this worsening crisis falls on ineffective government housing programs, which have not responded to people’s real needs. The Philippine government has typically promoted home ownership, but clearly not everyone who needs housing is a candidate to buy. Rental housing is an essential part of any well-functioning housing market for people who aren’t ready or able to buy or build. Renting gives workers the mobility to follow job opportunities; renting may better suit young people and others in transitional periods of their lives; and renting gives families greater flexibility to manage their housing budget. Yet, a recent review of the Philippines’ housing and urban development laws turned up just a single mention of rental housing

The rental housing sector, then, has a vital function in the Philippines that it is failing to perform: a significant portion of the population can only afford to rent, but while there is an ample supply of rentals in the formal market, growing numbers of Filipino families can only afford the informal settlements.

Reviewing this constellation of factors, The Asia Foundation, under the Coalitions for Change program, began looking for policy solutions. In the course of these research and advocacy efforts, the team worked with a coalition of civil society organizations, academics, and private-sector representatives, called Pantawid Upa (Interim Rental Housing Assistance), whose aim was to broaden the nation’s housing options, with special emphasis on subsidized rental housing for poor families. The coalition’s first proposal to the national government was a subsidy program for rental housing that targets affected families in times of disaster or displacement due to infrastructure development.


A window of opportunity

In February 2019, in a bid to streamline the government’s housing and land-use planning, expedite the approval process for new housing projects, and introduce new solutions to meet the housing needs of Filipino families, President Rodrigo Duterte signed a law creating a new Department on Human Settlements and Urban Development. The new department, which merged six different government agencies, will now serve as the national government’s principal agency for the management of housing, human settlement, and urban development. It will also oversee post-disaster shelter and recovery, climate-change adaptation, and risk mitigation.

But there was still a persistent need for cost-effective, short-term solutions for families with immediate housing needs.

The adoption of the new law opened a window of opportunity to write new rules on rental subsidies into its implementing rules and regulations (IRRs). After five months of development involving the government, Pantawid Upa, and other interested nongovernment parties, IRRs were adopted in July 2019. They include provisions under which the Housing and Real Estate Bureau will explore new and alternative solutions to the country’s housing needs, including a new provision for rental subsidies in Section 20.3.


Moving forward

Where, in the past, public housing programs in the Philippines focused on homeownership, the new rules have unlocked other options for immediate support to poor families with pressing housing needs. The provisions for rent subsidies in the new law have also provided a legal basis for a separate government program of rental housing subsidies for families displaced by disasters or development.

The new Department on Human Settlements and Human Development now has a welcome opportunity to differentiate itself from the failed policies of the past and provide better housing options and services to the Filipino people. Rental housing subsidies for vulnerable families are an idea whose time has come.

Hygeia Chi is a program officer for The Asia Foundation in the Philippines. She can be reached at [email protected]. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

Related locations: Philippines
Related topics: Coalitions for Change, Urbanization

1 Comment

  1. I love the fact that you were active in this partial solution. I’m surprised that neither a competitive US corporation or other competitive country hasn’t swept to build or export modest housing. The manufacture on site would create many jobs and provide rental possibilities for the workers and other needy citizens.

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