Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
1995
Pergamon Copyright@ 1995Elsevier Science Ltd
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0197-397519s$9.50 + 0.00
0197-3975(95)00006-2
MICHAEL LEE
Urban Policy Consultant, London, UK*
ABSTRACT
The Community Mortgage Program is unique to the Philippines, and has gained a
certain international reputation for successful innovation. It was initiated in 1988
to help the urban poor - mainly squatter communities - to purchase the land
they had been living on, and thus to legitimise their status. This paper introduces
the principles of the programme, and reports on some of the problems that have
been facing it, as well as on current attempts to make it financially sustainable.
As the Community Mortgage Program is being considered for implementation in
a number of other countries, the paper also reviews the circumstances in which
a remodelled programme could be implemented elsewhere.
INTRODUCTION
529
530 Michael Lee
many measures, the most successful of the others, is the Grameen Bank in
Bangladesh. Other institutions lending for housing to the poor include the
Thrift and Credit Cooperative Societies in Sri Lanka, the non-governmental
Self-Employed Women’s Association Bank (SEWA Bank), in Ahmedabad,
India, and the public sector Bank Rakyat Indonesia. All of these, however,
have tightly circumscribed rules of access which would exclude many of the
CMP’s clients, and/or have loan periods that raise affordability thresholds above
those of the CMP.2)
The Community Mortgage Program is a success, insofar as, by early 1994,
some 37,000 families (say, 210,000 people) have benefited from the programme.
Most of its participants unequivocally regard it as effective.
On the other hand, its detractors see it as trivial, problematic, or both: the
programme has helped fewer than 2% of the 2l/2 million or so families living in
substandard urban housing in the Philippines. Many of these families are eligible
to benefit from the membership of the programme, and many would choose to do
so if they could. For a number of reasons, the programme suffers from a variety
of imperfections, which frustrate it from meeting more than a tiny proportion of
the need.
The programme is intended to be sustainable. This implies that:
?? itshould be reliant on a dependable and renewable flow of financial resources;
?? itshould permanently enhance the capacity of participants to improve their
quality of life, providing benefits that are apparent and can be realised in a
cost-effective, affordable and timely manner;
??implementation should not require extraordinary skills on the part of managers
or participants;
?? participation of intermediary organisations should be voluntary and willing,
not requiring legal coercion.
As it currently stands, it is doubtful as to whether the CMP can be regarded
as sustainable, although a number of reforms could readily make it so.
This paper starts by reviewing why urban managers need a new strategy
for helping squatters, and then sets the context of the CMP by outlining the
evolution of the Philippine government’s approach to shelter policy. There
follows a description of the way the CMP works, illustrated by three case studies.
Final sections provide an evaluation of the degree to which the CMP is actually
and potentially sustainable, and draw conclusions about the circumstances in
which a community mortgage programme could be implemented successfully in
other countries.
UPGRADING AS A SOLUTION?
Most readers of this journal know about the growth of urban populations in
the developing world.3 We know that many of these people have no personal
choice but to subsist in abysmal standards of accommodation. We understand
the economic costs of the housing policy (or its absence) that has brought
about these circumstances, and know it to be true that the sanitary conditions
of these settlements cause the majority of their residents to die before they reach
maturity. And where, socially concerned, we used to deride people who told us
that the poor can only drink and steal, we are now becoming afraid of the social
malaise that accompanies these urban conditions.
Too often, recommendations to solve the problems of urban poverty and
squatting were only piecemeal, too expensive, or politically impracticable. From
the early 197Os, the main donor agencies with an interest in shelter (principally
the World Bank, USAID and the British Overseas Development Administration;
The Community Mortgage Program 531
The Philippines has one of the world’s highest rates of urbanisation, with an
urban growth rate exceeding 5% a year. Over 50% of the country’s population
is now living in urban areas.
The last 15 years have been a turbulent time for shelter policy and practice
in the Philippines.
The record of the Marcos regime was mixed as regards shelter development.
On the one hand, relatively large proportions of the government’s budget were
spent on massive housing and re-housing schemes, and a Ministry of Human
Settlements was created at a time when few other countries recognised the
importance of the sector. On the other hand, many people felt that the money
was wasted on high cost, prestige projects which could not possibly be replicated
532 Michael Lee
at a scale sufficient to make an impact on the country’s housing needs. The World
Bank7 found that, of total housing expenditures between 1976 and 1984, nearly
two-thirds was for units affordable only to the richest 20% of the popu1ation.s
Even though the government engaged in extensive resettlement of squatters,
slums proliferated.
Largely as a result of the country’s economic decline, the mid-1980s witnessed
widespread mortgage defaults, which, together with the weak national economy,
discouraged private investment in housing. (The poor design of mortgage
instruments also played a part in promoting defaults.) At the same time, the
public housing finance system effectively transferred resources to high-income
borrowers, from low-income lenders to the national housing fund, at heavily
subsidised rates.9
Following the ‘People’s Power Revolution’ of 1986 which swept President
Marcos from office, the all-powerful Ministry of Human Settlements was replaced
by a coordinating council with significantly reduced powers. Simultaneously,
political forces demanding more popular participation, together with financial
realities, brought about major shifts in policy, a realignment of functions between
central and local government, and between government and non-government
(private sector and community organisations).
On the overthrow of the Marcos government, many thousands of people
invaded public and private land in Manila to establish new squatter communities,
expecting more benevolent treatment from the new administration. But, plus
ce change . . . The Aquino government necessarily pursued a programme of
financial austerity, and renounced the construction of most forms of new
infrastructure. Among other consequences of the government’s macroeconomic
policies was considerable volatility of interest rates, which, coupled with weak
credit markets, meant that few people could borrow for housing. An ever-
increasing proportion took to squatting as the only form of shelter.
Philippine statistics on land tenure are not watertight, but the broad picture
is clear: about 40% of the urban population do not own, or have unclear title
to, the land they occupy. As a result, most of the urban poor are inhibited from
making any substantial improvements to their homes or to their infrastructure
services. Because of their tenure, they are unable to access any formal finance to
borrow for improvements. The authorities, too, are disinclined to provide water
and sanitation services to land with disputed ownership. This is the main group
targeted by the CMP.
Nuquitc presents a characterisation of the urban poor in the Philippines, the
intended beneficiaries of the CMP. He says that the typical family is nuclear, not
extended, and has six members. Husband and wife are usually migrants from a
depressed region of the Philippines. Half of the members of this typical family
are less than 20 years old, with the children particularly prone to malnutrition
and poor health. Their houses are typically constructed from scrap materials.
Writing of Manila, Nuqui reports that
only a few households have access to safe water supply and have their own
sanitary toilets; there is also lack of an adequate sanitary and drainage
system. This causes severe flooding in many areas and creates, economic
disruption, accelerates the deterioration of infrastructure and creates serious
sanitation and health problems. Systems for solid waste management are
either nonexistent or seriously deficient . . . (p. 522)
The public answer of the Aquino and (present) Ramos administrations has
been to target public funds more tightly to families in need, and actively to
encourage participation by the private sector. This policy is beginning to pay
dividends: Kingsley and Mikelsons quote government statistics that, in 1989,
“75 % of total housing assistance benefited the lowest 50 % of the population
The Community Mortgage Program 533
The CMP finances poor communities to buy their own residential land, normally
land that they have been squatting on. Land purchased through the CMP
may either be occupied already by the beneficiaries, or previously-unoccupied.
Acquisition of title is the primary aim of the participants in the programme;
improvement of shelter conditions is a secondary objective. However,
once squatters have secure tenure to the land they occupy in the form
of a legal title, house improvement quickly follows and within a very
short time permanent structures are erected with financing provided from
savings, overseas remittances, family assistance and/or formal and informal
borrowing. 15
The programme is administered by a small, dedicated group, the Community
Mortgage Group, within the government’s National Home Mortgage Finance
Corporation (NHMFC) in Manila. The NHMFC is the policy-making body, the
funder and the administrator of the CMP. It also administers the other, larger,
parts of the government’s Unified Home Lending Program, which provide
conventional financing for house purchase and construction to households in
higher-income groups.
The CMP loan programme is designed to be implemented in three stages:
(1) an initial loan for purchase of the community land, thus giving immediate
security of tenure;
(2) a second loan to the community for upgrading the water supply, drainage,
sanitation and other infrastructure services; and
(3) thirdly, loans to the individual beneficiaries for house improvement or
reconstruction.
high proportion of these sites are owned by women) for many years, foiled
by the intransigence of the occupiers and by the widespread presumption of
politicians and the law in favour of underprivileged poor, and against rich,
predatory landowners. Negotiations which may lead to any form of recompense
are, therefore, generally welcomed by landlords, especially when every other
recourse - often including resort to strong-arm techniques - has failed.
The NHMFC purchases the land from the landowner and mortgages it to
the community association, in turn collecting monthly repayments, on heavily
subsidised terms.
The association has continuing responsibilities throughout the life of the
project: at the outset, identifying the potential for utilising the CMP; explaining
the principles and mechanics of the CMP to community members and persuading
them of the scheme’s benefits; and finding and working with a sponsor. Not least
of its subsequent duties are collection and recording of the monthly payments
due from each of its members. As will be seen in the case studies quoted
below, a good association can make a CMP project function smoothly, but a
poorly-managed association can spoil a project which otherwise has potential
for success.
The originator
Each community association is required to enter into an agreement with a
more experienced partner organisation, known as the ‘originator’. This is an
organisation which works with the community at each stage of programme
implementation and, most importantly, is responsible for the legal origination
of the mortgage. Most originators are NGOs, or central or local government
units. Others may be charitable associations (such as Rotary or Lions Clubs),
private developers, or specified national government agencies.
The originator acts as a sort of godfather organisation, generally for several
communities:
?? In the initial, planning period, the originator provides information about
the CMP to the community, and liaises between the community and the
government. It ensures that members of the community understand their
obligations ,as well as their rights under the programme.
?? The originator is responsible for nurturing and monitoring the project.
Originators may, for example, be expected to provide help with engineering
or architectural designs (e.g. the relocation or installation of utility services, the
construction of a community hall or offices, or even plans for the improvement
of individual houses).
??The originator helps the community association to complete the mortgage
documents and process the loan application.
??The originator is also expected to provide support to the community for
an indefinite period thereafter, including continuing liaison with external
agencies, and advising how to develop community projects.
Originators receive a nominal fee (P500 [US$18] per household)16 for their
services. This fee usually does not even meet the direct financial costs associated
with origination, let alone contribute to overhead expenses. It is an arrangement
which acts as a disincentive for all except well-heeled NGOs to participate in the
programme.
Financial terms
Loans are made by the NHMFC to participating communities at an interest rate
of 6% a year, repayable in equal monthly payments over a period of 25 years. By
way of comparison, mortgages can be obtained from commercial banks at 18%)
for no more than 15 years. The annual rate of inflation has varied in recent years
from a high of 18.7% in 1991, to 7.6% in 1993. By any measure, then, the real
interest rate charged under the CMP is highly negative.
The maximum loan per plot that a community can borrow under the CMP is
P60,OOO($2,200) in Manila, and P45,OOO($1,600) outside the capital. In practice,
the average size of loan actually taken by beneficiary households works out to be
about P21,OOO($760), less than half the permitted maximum, although there are
wide variations between communities. The mean loan of P21,OOOwould require
a monthly payment of about P135 ($4.90). Stated household incomes range from
some P2,OOOto P3,600 a month, so that, typically, participation in the CMP takes
around 5% of a householder’s income. 17 (Inflation, of course, erodes the real
cost of repayments. If prices and incomes were to increase at, say, 10% a year,
repayment of the average initial loan would be reduced from 5% of income to
2% after less than 10 years.)
Source of funds
The CMP has derived its capital funding from short-term loans from three
government-supported savings and loan funds: the Home Development Mutual
Fund (known as Pag-IBIG), SSS and GSIS, which together comprise the Unified
536 Michael Lee
Defaults
Penalties are charged by the NHMFC on payments overdue from community
associations. Communities that are persistently in default are subjected to the
same sort of treatment that would be expected by any delinquent mortgagee:
starting with friendly reminders, then offers of assistance, threatening letters
and, finally, foreclosure. At the time of writing, the NHMFC had made several
threats to foreclose, but had not actually succeeded in carrying through its
warnings. Some of the associations genuinely believed that the NHMFC was in
earnest about this, and, with the help of their originator, were actively trying to
re-organise their finances. Others, though, believed it to be a bluff, and that the
government could not have the political will to dispossess a squatter community
in real distress.
It is the responsibility of the community association to maintain financial
discipline. With poor communities, and especially in those communities that
comprise a large proportion of irregularly-paid workers, households often find
it difficult to meet regular payments; community treasurers need a fair amount
of skill to explain, cajole and work with defaulters to persuade and help them to
pay or reschedule their repayments. In cases of genuine need, richer communities
have often used their savings to compensate for temporary lapses on the part of
individual members. There is, however, a limit on the community’s resources,
and most of the CMP community associations - by definition, poor - cannot
afford to compensate for defaults by more than a few members, or for long
periods of time.
The first sanction takes the form of community pressure on delinquent
members; most community organisations also charge a penalty on payments
overdue. If these pressures fail, unresponsive defaulters are to be evicted from
their homes by their community association. Clearly, this is not easy, even in
cases where families have the ability to pay but have opted not to do so (“We
have been living here free for so-many years; why should we pay now?“). It
is even less easy, and less easily justified, to dispossess a family because its
members have become unemployed and destitute.
Despite these problems, a number of community associations have succeeded
in evicting defaulters. Some have done this by persuasion, some using legal
means. Other associations do not know how to go about this, or prefer not
The Community Mortgage Program 537
to. Where plots have been vacated, they are sold, and the evicted member is
compensated by the substitute household for payments previously credited to
the CMP. The usual exceptions are members in default who are too old to be
able to fend for themselves elsewhere and who do not have relatives who are
able to support them. In such cases, the community usually finds a solution,
such as offering them a job in a community livelihood project.
THREE VILLAGES
Three case studies are described below. The first is of an urban village which
has some fairly severe project-related problems that could have been avoided
with better oversight on the part of the originator. The second case study is
of a community that has become delinquent in repayments through no fault of
its own, and which has little hope of avoiding foreclosure. The third case study
happily reports on an example of a near-perfect CMP community. The status
of these villages is reported as of mid-1993.19
Loan recovery
Central to the question of whether any housing finance programme can be
sustained is the condition of its financial health; central to the question of
financial health is the state of loan recoveries. The more borrowers that see
that there is no penalty for delinquency, the fewer that will actually bother to
pay on time, or ever. Unless loans are largely and efficiently being recovered
(with, say, no more than 5% of the portfolio past due for over 12 months), any
lending organisation will be deprived of a useful, perhaps essential, source of
capital for financing new loans. It will also not be sufficiently creditworthy to
be able to take on new commercial credit.
Unfortunately, the official collection statistics for the CMP are dismal.
Overdue payments were said (and officially believed) to represent 45% of all
billings, representing a collection efficiency of 55%. Only 20% of communities
were recorded as being up to date with their payments. (The official figures,
however, overstated the seriousness of the situation. One reason was the
‘stickiness’ of transmittal of funds from the provinces to Manila: payments had
been made by community associations to their bank branches, but, at the time
of analysis, had not been received by the NHMFC.21) At the time of writing,
the precise default rate of the CMP was not clear, although the overall situation
was obviously not good.
Capital financing
Although the government was apparently committed to provide capital financing
from its own resources, sceptical observers noted that previous governments had
not always been able to fulfil similar promises, and rarely in a timely way;
and pointed out that sums of this magnitude are unlikely to be provided on a
sustained basis. An alternative solution being canvassed was for the CMP to be
separated from the NHMFC, financially and managerially; and for some sort of
non-governmental guarantee to be given to enable the newly-independent CMP
to borrow from the domestic capital market. Loans to beneficiaries would be
made at close-to-market rates, but could be matched with grant funds from
the government budget to buy down the total cost to beneficiaries to a readily
affordable level.
The Community Mortgage Program 541
Programme complexity
Basaen reports that there are many poor squatter communities in the Philippines
for which the CMP does not provide a realistic option for addressing tenure
concerns:22 perhaps because some landowners have no intention of dealing with
the community, or because some communities lack the requisite negotiating
skills. Basaen points out, as well, that the CMP is considered out of reach of
many poor communities which believe they could not cope with its administrative
processes. The intricacy of the programme has been a constant complaint since
its inception. Over time, certain simplifications have been made. However, the
CMP is not a straightforward housing finance programme, and its characteristics
are seen to require relatively complex rules.
Stajjing
The CMP’s client group, even with the goodwill and assistance of their
originators, cannot realistically be expected to understand every nuance of
the programme’s procedural complexities. Some mistakes are inevitable, for
instance in the paperwork. This, then, calls for a relatively high degree of
technical assistance, training and supervision. There are doubts as to whether
the tiny number of professional staff assigned to manage the programme - in
1993, there were about 30 positions filled - is adequate.
Regional delegation
The NHMFC has only six regional offices, with fewer than 10% of its total staff
assigned to the regions. These offices, of course, deal with all of the corporation’s
programmes, of which the CMP is only a relatively small part. The regional staff
have a certain amount of delegated authority, but have only narrow authority
to take decisions and limited expertise to deal with queries and complaints. As
a result, most of the originators prefer to deal directly with Manila, further
undermining the authority and motivation of staff in the regional offices, and
causing additional delays.
Originators
The (abbreviated) list of originators’ responsibilities set out earlier in this
paper was formidable. Many putative originators were either unwilling or, in
the event, unable to perform all of their functions properly. The consequent
failure of several originators can be blamed for some of the weaknesses of
individual community projects. These shortcomings could have been resolved
by a combination of better screening of would-be originators, and more
realistic financial compensation (with Manila at least meeting the marginal
costs of origination). Recently, formal training has been provided to the staff
of originator institutions to assist them to provide all the services that are required
by a community association.
Health benefits
There are standard arguments that the main benefits of settlement upgrading
are measurable in terms of health improvements, by better housing or improved
infrastructure. This is clearly not the case with the CMP, which has few health
benefits to point to: where infrastructure has been upgraded, it has been either
relatively small-scale or cosmetic, or has mainly taken the form of access
improvements. Given the cost and difficulty of improving the environmental
infrastructure, few communities have ranked the benefits of better water supply
or improved sanitation sufficiently to place these as a high priority for use of
their own, severely limited, personal financial resources.
Infrastructure
The main benefit from the CMP as it is practised in the Philippines is an
improvement in the tenure status of squatters. In other countries, beneficiaries
or governments might put a higher priority on infrastructure improvements, and
thus prefer to design the programme so as to incorporate site improvement
ab initio.
IN CONCLUSION
Most of the existing problems of the CMP in the Philippines have a solution, in
theory if not in the practical reality of daily political life. However, a quandary
remains; the heart of the issue of sustainability. If the programme is priced so as
to be financially sustainable, can it meet the goals of reducing poverty? If it can
be afforded by the poor, can long-term capital funding be made available?
In most countries, governments do not have enough funds to be able to run
a CMP-like programme on a heavily subsidised basis, at a volume significant
enough to make an impact on the tenure and shelter problems of the urban
poor, on a long-term basis. Nor are those governments sufficiently persuasive to
be able to access much concessional funding from international donors (or from
544 Michael Lee
the local charitable business community). It follows that capital funding for such
a programme must be sought from private domestic markets. Several conditions
must be fulfilled for this to happen but, above all, the programme managers
must be able to borrow and repay on competitively commercial terms.
This implies, firstly, that the interest rate must be set so as to reflect the total
cost of borrowing, including administrative costs and an allowance for bad debts.
Secondly, in order to be able to borrow commercially, the programme must
be seen to be financially sound and creditworthy. In turn, this implies that
its management must be able to collect debts and enforce its contract with
the community associations; and to be independent of political whims of the
government of the day. If the programme is to be creditworthy, underwriting
criteria must reject communities incapable of repayment, and must, in the last
resort, be able to foreclose on delinquent communities.
If a CMP were to borrow and lend on commercial terms, the questions of
equity and affordability are sure to be raised. Housing policy analysts may
point to examples of poor people choosing to borrow from moneylenders at
huge interest rates, or borrowing from the formal sector at large positive rates.
They can demonstrate that poor people are able to repay the loans. However,
it is also true that (1) the quoted loans, almost without exception, are taken for
periods of a few months, not years. Psychologically and financially, it is easier
to sustain relatively high levels of repayment for, say, 24 months, than for 25
years. And (2) certainly there are individuals who can afford high repayments;
but, equally certainly, in most communities of the really poor there will also be
many families who cannot afford to take on loans of any magnitude.
Does this mean that a financially sustainable programme cannot work for
communities that include individuals who are very poor? No: there are ways in
which the programme could become simultaneously affordable and financially
sustainable. One solution would be to mix grants with commercial loans in
order to buy down the cost of the loans. Although the Philippine government
appears to have ruled this out, at least for the present, the CMP appears to
have built up sufficient public support from landowners and squatters that it
would be politically hazardous for to abandon it. While the search carries on
for an acceptable long-term solution, short-term funding will continue to keep
the programme alive.
NOTES
1. Descriptions of CMP procedures and history - in greater detail than are included in this paper
- can be found in several publications, including the following. HUDCC (Housing and Urban
Development Coordinating Council, Republic of the Philippines) The National Shelter Program
(HUDCC, Manila, 1991). Wilfred0 G. Nuqui, “Philippines Country Paper”, in The Urban Poor
and Basic Infrastructure Services in Asia and rhe Pacific (Asian Development Bank and Economic
Development Institute, ADB, Manila, 1991). pp. 515-552. PADCO, Assessment of the Communiry
Mortgage Program, for USAID/Philippines, Philippine Business for Social Progress, Ramon Aboitiz
Foundation, and Kauswagan Sa Timugang Mindanao Foundation, Manila (May 1993).
2. From its establishment in 1976, the Grameen (‘Rural’) Bank lent small sums of money for
income-generating projects. Housing loans were started in a small way only in 1984, but the
volume has since expanded rapidly. Priority is given to women and to those poorest members of
the community who do not have their own homes. As in their other lending programmes, loanees
are landless men and women who form themselves into groups of five, in order to receive the loans
for which no collateral is required. Several groups combine to appoint representatives who validate
loan proposals and supervise activities. (See USAID, Asia Perspective 2, 2, Special Issue on Housing
Finance (US Agency for International Development, Regional Housing and Urban Development Office
for Asia, Bangkok, 1990).) Both the CMP and Grameen offer loans at below-commercial rates of
interest (althoigh Gramekn’s other loan programmes are run at close to market rates; the Grameen
Bank is financially self-sufficient). The main differences between the CMP and the Grameen Bank’s
shelter programme are as follows:
The Community Mortgage Program 545
Of the other institutions mentioned, the Thrift and Credit Cooperative Societies in Sri Lanka
effectively collapsed when, in 1988, the government forgave poor families repayment of their
loans. (See Michael Lee, The Role of Private Enterprise in Housing Finance: Lessons from South
Asia (USAID Regional Housing and Urban Development Office for Asia, Bangkok, 1992).) The
SEWA Bank lends to individual members (poor women), at commercial rates (currently 16%), for
periods of up to 20 years. Default rates are very low. Bank Rakyat Indonesia lends for house extension
and improvements at 32% for periods of up to 36 months. Repayment rates on this programme are
excellent, but loans are currently made in general only to people with a fixed income, thus excluding
the self-employed and the casually-employed, who are among the lowest paid in Indonesia.
3. For newcomers: in 1988 the United Nations Centre for Human Settlements estimated that the world’s
urban population will grow from 2.2 billion in 1990, by lOO%, to 4.5 billion 30 years later, an average
increase of 75 million people a year. Kasarda and Rondinelli point out that “the net addition of
urban population in developing countries between 1980 and 2000 [will be] equal to that of the total
urban population in developed countries in the year 2000” (p. 393). Cairncross ef al. note that “it
is impossible to estimate with any precision what proportion of the 1.3 billion urban dwellers live
in inadequate housing with inadequate provision for water, sanitation and other basic needs. Case
studies of specific cities show that it is common for between 30 and 60 % of the population to live
either in illegal settlements or in tenements and cheap boarding houses We estimate that at
least 600 million people living in urban areas of the Third World live in what might be termed life
and health threatening homes and neighbourhoods” (pp. 2. 4).
United Nations Centre for Human Settlements (UNCHS) Habitat News (1988) p. 10. Kasarda and
Rondinelli, “Mega-Cities, the Environment, and Private Enterprise: Towards Ecologically Sustainable
Urbanization”, Environmental Impact Assessment Review, 10 (1990), pp. 393-404. Sandy Cairncross,
Jorge E. Hardoy and David Satterthwaite, The Poor Die Young: Housing and Health in Third World
Cities (Earthscan Publications, London, 1990).
4. See Jorge E. Hardoy and David Satterthwaite Squatter Citizen: Life in the Vrban Third World
(Earthscan, London, 1989). These authors give credit, in particular, to “priests and religious groups
affiliated to the World Council of Churches”, and other researchers and professionals who worked
with low-income people in housing and community development projects in the 1950s and early 1960s
as having developed the concept of upgrading, which was later adopted by the donor agencies.
5. Geoffrey Payne, Informal Housing and Land Subdivisions in Third World Cities: a Review of the
Literature (Centre for Development and Environmental Planning at Oxford Polytechnic, for the
Overseas Development Administration, Oxford, 1989).
6. Even if settlement upgrading is not widely practised as a solution to the problems of urban slums,
Hardoy and Satterthwaite have noticed several changes for the better. Among these is a much greater
level of tolerance for informal settlements on the part of politicians and policy-formers (although this
may be associated with the increased degree of commercialisation of informal construction, and the
associated political power of informal developers); a recognition of the right of many people living in
informal settlements to basic infrastructure and services; the reformulation of building and planning
regulations to more realistic standards; and the recognition of and support for the role of NGOs
and community groups as advocates for the urban poor. Hardoy and Satterthwaite (1989), op. cit.;
see note 4.
7. World Bank, Staff Appraisal Report: Housing Sector Loan (The World Bank, Washington, DC,
1988).
8. Quoted by G. Thomas Kingsley and Maris Mikelsons Decentralizing Philippine Development: Second
Year Assessment (The Urban Institute, Washington, DC, 1992, for USAIDIPhilippines).
9. Michael Lee, “The Appraisal of Shelter Programmes: Resource Management in Metro Manila”,
Habitat International, 9, 314, (1985), pp. 317-332.
10. Nuqui (1991), op. cit., see note 1.
11. Kingsley and Mikelsons (1992), op. cit., p. 67, see note 8.
12. HUDCC (1991), op. cit., see note 1.
13. But Murphy reports that, during the posr-Marcos years, some 100,000 squatters were evicted every
year, and that most of them received neither compensation nor alternative land on which to settle.
Denis Murphy, The Urban Poor - Land and Housing (Asian Coalition for Housing Rights,
Bangkok, 1993).
14. Philippine Vrban Perspectives, 1, 4 (Development and Management Institute, Makati, Metro Manila,
July-August 1993).
15. PADCO (1993), op. cit., p. 10, see note 1.
16. The Philippine currency, the peso, stood at about US$l = P27.50 in early 1994.
17. Actual household incomes may, of course, be higher than stated incomes. The official poverty threshold
was P4,220 (then $169) per urban household per month in 1991. All of the CMP communities surveyed
by PADCO had average incomes well below the government’s official poverty line. See PADCO
(1993), op. cit., see note 1.
546 Michael Lee
18. Philippine Urban Perspectives (Development and Management Institute, Makati, Metro Manila,
July-August 1993), pp. 2-3.
19. These communities were visited as a part of the study reported in PADCO (1993), op. cit., see
note 1.
20. HUDCC (Wl), op. cit., see note 1.
21. This author has come across no suggestion of financial malpractice, in the sense of official corruption,
in this programme.
22. Ines M. Basean, “Non-Governmental Initiatives in the Philippines”, in The Urban Poor and Basic
Infrastructure Services in Asia and the Pacific (Asian Development Bank (ADB) and Economic
Development Institute (EDI), Manila, 1991).