RP needs P456B to solve housing problem

The Philippine government will have to invest an estimated $8.6 billion (roughly P456 billion) in the next 15 years – over $570 million on an annual basis to effectively address the housing problem in Metro Manila alone, according to a study commissioned by the Asian Development Bank (ADB).

The same study indicates that there are over 3.4 million people living in slum areas in Metro Manila, and half a million of these are living in danger areas such as along rivers and railway rights-of-way.

ADB senior housing finance specialist Michael Lindfield referred to the study during a presentation on ADB’s Strategic Private Sector Partnerships for Urban Poverty Reduction (STEP-UP) project which the bank launched in cooperation with the Philippine Business for Social Progress (PBSP). It was part of the Fourth Corporate Social Responsibility Week of the League of Corporation Foundations.

STEP-UP is a pilot public-private sector partnership to upgrade slums in Metro Manila. It is being supported with a $3.6-million grant from ADB’s Japan Fund for Poverty Reduction (JFPR) and financed by the Japanese government.

"STEP-UP aims to change the way in which the corporate sector interacts with, and provides support, to local communities. Government alone cannot effectively address the scale of the problem," Lindfield said. "Broader private sector involvement is urgently required."

The study likewise indicates that depressed settlements recorded a high growth rate of 4.4 percent annually, nearly twice the overall average for Metro Manila. Unemployment rates in these depressed settlements fall within an average of 40 to 50 percent.

The study also noted the following:

• The average household size in depressed settlements is 6.75, significantly larger than the average of Metro Manila (4.62) or the Philippines overall (five). Squatter households were found to average 7.1 in size.

• The mean age of depressed settlements recorded across Manila is 19.2 years, with at least a quarter of the residents having lived in their current houses for over two generations.

• The median monthly income recorded in the survey was P16,900, with around 19 percent of this being non-wage income, from sources such as remittances, donations, gifts, etc.

• If the poverty line were applied to a per capita basis, some 75 percent of households in depressed areas would be below the poverty line.

• Urban poor households spend three to four percent of their total household expenditure on water; those who rely primarily on vendors sometimes have to devote as much as 10 percent.

The STEP-UP project has a total cost of $6.93 million. The remaining costs would be shouldered by the PBSP, beneficiaries and the local government units (LGUs). PBSP is the implementing agency while the state-run Housing and Urban Development Coordinating Council (HUDCC) is the executing agency. The project is to be implemented over three years.

The JFPR was set up in 2000 with an initial contribution from the Government of Japan of 10 billion yen (about $90 million), followed by additional contribution in 2001 of $155 million and a further commitment of $50 million in 2002.

"The project links the poor to economic opportunities by providing them with the wherewithal to help themselves and with contacts and role models in enterprise," Lindfield said. "It provides an improved environment and community facilities to cater to health and education needs. It reduces their vulnerability to calamities by better risk management."

The program leverages corporate outreach and assistance from leading companies to provide grants for community infrastructure and basic services, revolving funds for housing improvements, microenterprises to promote livelihood opportunities, and a program to prevent, and prepare for, fires, floods, and typhoons.