STRATEGIES FOR PROVIDING A HOME FOR THE LOW INCOME SEGMENT Resource Speaker: MR. EDUARDO T. MANICIO Executive Vice President Social Housing Finance Corporation
WHO ARE THE LOW-INCOME GROUPS Usually identified as the those belonging to the bottom 30% of the Philippine population INCOME DECILE ANNUAL AVE INCOME (P,000) ANNUAL AVE EXP (P,000) ANNUAL AVE SAVINGS (P,000) Philippines 235 193 42 First Decile 69 73 (4) Second Decile 92 91 (1) Third Decile 108 102 6 Fourth Decile 130 121 9 Fifth Decile 153 139 14 Sixth Decile 182 161 21 Seventh Decile 229 196 33 Eight Decile 286 237 49 Ninth Decile 381 302 79 Tenth Decile 715 503 212 Source: PSA 2012 (Average Income, Average Expenditure), Savings own computation 2012 Annual 2014 Poverty Poverty Threshold: Threshold P93,852.00 Poor P105,336.00 1 st, 2 nd Deciles 2014 Annual Poverty Threshold P105,336.00 Poor 1 st, 2 nd, 3 rd Deciles
FIRST SEMESTER PER CAPITA THRESHOLDS AND INCIDENCE: 2013 AND 2014 STATISTICS ESTIMATE 1 st sem 1 st sem Increase/ 2013 a/ 2014 b/ Decrease (%) Per Capita Food Threshold (PhP) 6,712 7,350 9.5 Subsistence Incidence (%) COEFFICIENT OF VARIATION 1 st sem 1 st sem 2013 a/ 2014 b/ Families 7.5 7.6 6.5 6.8 Population 10.5 10.5 6.2 6.3 Per Capita Poverty Threshold (PhP) 9,630 10,534 9.4 Poverty Incidence (%) Families 18.8 20.0 4.3 4.2 Population 24.6 25.8 4.0 3.9 Source: Philippines Statistics Authority Notes: a/ 2013 Poverty estimates were revised from those released on 29 April 2014 for consistency with the 2014 poverty estimates which were generated from the 2014 Annual Poverty Indicator Survey which does not include sample households from Batanes and Leyte. b/ 2014 poverty estimates were generated from the 2014 APIS, which does not include sample households from Batanes and Leyte.
INCOME DECILE TOTAL FAMILY EXP (P) TOTAL HOUSING EXP (P) % SHARE Philippines 4,125,312 520,349 12.61 Source: FIES 2012 PERCENTAGE OF HOUSING EXPENDITURE First Decile 156,081 11,206 7.17 Second Decile 194,477 15,609 8.03 Third Decile 219,078 19,597 8.95 Fourth Decile 258,078 26,238 10.16 Fifth Decile 296,986 31,049 10.45 Sixth Decile 344,582 39,887 11.58 Seventh Decile 420,732 49,933 11.87 Eight Decile 508,442 66,082 13 Ninth Decile 647,624 87,336 13.49 Tenth Decile 1,077,357 173,331 16.09
BASED ON ANNUAL POVERTY INDICATORS SURVEY (2008) POOR FAMILIES HAVE THE FOLLOWING CHARACTERISTICS SELECTED INDICATORS Two in three heads of poor families have at most an elementary education Two in every five poor Filipino families do not have electricity in their homes Seven in ten poor families have access to safe water One in four poor families has no sanitary toilet Almost half of poor families are living in housing units with a floor area of 10 to 29 square meters Source: Philippine Statistical Authority
NATIONAL POLICY ON URBAN LAND REFORM AND HOUSING Section 9 of Article XIII of the Constitution provides that The State shall by law and for the common good undertake in cooperation with the private sector, a continuing program of urban land reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas. P.D. 1396 declared policy of the government to foster the growth, the renewal of communities both rural and urban in an integrative manner, that promotes optimum land use, adequate shelter E.O. No. 90 Rationalized the funding sources and roles of the key shelter agencies and created the HUDCC to coordinate their activities. R.A. No. 7279 An act to provide for a comprehensive and continuing Urban Development and housing program, establish mechanism for its implementation, xxx
MATRIX OF STRATEGIES AND PROGRAMS Strategies/Period Focus/Emphasis Major Programs 1.) Creation of MHS and PD 1396 s. 1978 HSDC 2.) Creation of NHMFC- PD 1267 s. 1977 Balance/integrated approach to urban development and housing - Development of secondary mortgage market - Loan take-outs thru banks - Development of new communities that are economically viable and environmentally sound - Renewal of urban communities thru housing and other urban improvement projects - Accreditation of banks, issuance of PCLs and take-outs of mortgage from the participating banks. - Creation of savings mechanism to support secondary activities (the Pag-Ibig fund)
MATRIX OF STRATEGIES AND PROGRAMS Strategies/Period Focus/Emphasis Major Programs 3.) E.O. No. 90 (s. 1986) - Designation of key shelter agencies and their respective roles in the national government housing program - Establishment of a system that will generate long-term funds for housing - Provision of houisng assistance to the lowest 30% of urban income earners thru NHA program - Unified Home Lending Program of NHMFC; slum upgrading, relocation sites and services by NHA - After UHLP, EHLP of HDMF
MATRIX OF STRATEGIES AND PROGRAMS Strategies/Period Focus/Emphasis Major Programs 4.) R.A. 7279 (1992) - By far the most comprehensive piece of legislation on housing - Development/undertaking a comprehensive and continuing urban development and housing program - Upliftment of the conditions of the homeless citizens in urban areas - Rational use and development of urban land Community Mortgage program (CMP), Abot-Kaya Development Fund, Balanced Housing Development; APDs, slum improvement and resettlement programs
PERFORMANCE OF THE DIFFERENT HOUSING AGENCIES AND PROGRAMS: 1978-2014 1. MHS: 1978-1986 Established the foundation for secondary mortgage market thru NHMFC. Two mortgage backed-securities were issued by the Corporation BMPC and BC Created the savings mechanism for housing under NHMFC, which was later spinned-off as Pag-Ibig Fund Introduced the MRB and HOA concepts in housing thru the BLISS projects.
PERFORMANCE OF THE DIFFERENT HOUSING AGENCIES AND PROGRAMS: 1978-2014 2. E.O. No. 90 Consolidated the government s housing finance program in NHMFC thru the UHLP. A total of P42 Billion in mortgage loans were underwritten under this Program. Defined (or redefined) the mandates of the housing agencies Established HDMF as the biggest funding agency for lowmiddle to economic housing projects with total loan extended of P318 Billion as of 2013 3. R.A. 7279 Established CMP as a principal program for housing the poor and underprivileged. Total beneficiaries served reached 277,000 families by 2014 4. R.A. 7835 (December 16, 1994) Provided funding support for low-cost and socialized housing program of the government.
TOTAL FUNDS P75.43 B TOTAL BENEFICIARIES 279,124
SOME COMMENTS ON THE NATIONAL GOVERNMENT PROGRAM FOR LOW INCOME AND INFORMAL SETTLER GROUPS 1. NISUS (National Settlements Upgrading Strategy) The current programs for informal settlers whether undertaken by government, civil society, communities or private sector are small in relation to need and all interventions, especially those of the government need to be scaled-up xxx The housing finance system has encouraged some private developers to build more affordable houisng but not informal settlers. Many socialized housing programs involving LGUs have so far not prospered and city planning and housing policy remain uncoordinated. At the National front, more urban development sector leadership, coordination and focus is required.
SOME COMMENTS ON THE NATIONAL GOVERNMENT PROGRAM FOR LOW INCOME AND INFORMAL SETTLER GROUPS 2. HOUSING SUMMIT 3. PIDS (01 SEPT. 2015) The Housing gap has largely been attributed to an affordability problem and the government s strategy of choice has been to maximize the output of new housing for sale at below market prices. This approach while well intentioned has been costly and ineffective. Not all informal settlers are poor, poverty incidence among ISFs in NCR is only about 5% and 20% in the entire country based on the 2012 poverty threshold. Between 1994 and 2014, the growth in the number of projects and beneficiaries of CMP showed no significant change. An examination of the individual accounts of CMP show that only about 25% of member-benficiary accounts are current.
RECOMMENDATIONS CULLED FROM STUDIES Review/recast the roles of government sponsored housing finance institutions, expand the mortgage sector and reform the incentives/subsidy systems. Consider an income based subsidy strategy that will ensure that the poor households are not put at a disadvantage. Ensure that community development is undertaken prior to loan take-out. Select mobilizers with capacity in community development and in strengthening social capital in communities. Adopt more market-based approaches to housing finance and production Adopt rights-based alternatives for ISFs living in government property Rationalize and target capital subsidies more effectively Return to informal settlements upgrading within an urban renewal framework Government not to build houses but only demonstrate model schemes
CONVERGENCE OF FINDINGS AND RECOMMENDATIONS On subsidies the system of subsidies in the form of interest rate subsidy, guarantees and long tenure are inefficient and have to be reformed. On government housing institutions review of the roles and structures is in order. In particular, the NISUS recommends HUDCC should be more allembracing urban policy and coordinating agency. The need to scale up intervention and volume NISUS finds the current programs and their impact as small relative to the need especially of the informal settlers. PIDs cited that CMP accomplishments between 1994 to 2014 showed a significant improvement on year to year basis.
CONVERGENCE OF FINDINGS AND RECOMMENDATIONS On tenurial arrangements NISUS recommends rights-based alternatives in securing tenure. PIDS cites studies which show limited impact of titles ownership to subsequent investments in having improvements and credit flows. On the Role of Market to expand housing supply to the middle and low income sectors, program should strengthen links with the capital markets and the private sector should be encouraged to provide house construction and rental housing. There are findings that under current arrangements where government provides housing at subsidized terms, the private sector/market participation is being constrained or limited.