UNIVERSITY OF CAMBRIDGE

DEPARTMENT OF LAND ECONOMY

The Kaantabay sa Kauswagan Program:

A Close Look at a “Secure Tenure” Poverty
Reduction Program in Naga City, Philippines

BY WILFREDO B. PRILLES, JR.

Fitzwilliam College

DISSERTATION
Submitted in partial fulfilment of the requirements for the
degree of Master of Philosophy in Land Economy
2003/2004
CONTENTS

Certification ............................................................................................................. iii

Acknowledgements .................................................................................................. iv
Abstract .................................................................................................................... v
Abbreviations and Acronyms ................................................................................... vi
List of Tables and Figures ........................................................................................ vii

Chapter Page

1 INTRODUCTION ....................................................................................... 1
1.1 Program Background ................................................................................... 1
1.2 The Global Campaign for Secure Tenure .................................................... 2
1.3 Research Questions ....................................................................................... 3
1.4 Structure of the Research ............................................................................. 5

2 THEORETICAL AND CONCEPTUAL FRAMEWORK .......................... 6

2.1 Key concepts behind the Kaantabay program ............................................. 6
2.2 Theoretical Foundations ............................................................................... 8
2.3 Conceptual Framework ................................................................................ 11

3 THE KAANTABAY SA KAUSWAGAN PROGRAM: A PROFILE .............. 12

2.1 The Setting ................................................................................................... 13
2.2 The Local Housing Market .......................................................................... 13
2.3 The Kaantabay sa Kauswagan Program ...................................................... 16
2.4 Program Mechanics ...................................................................................... 18
2.5 Summary ...................................................................................................... 30

4 ANALYSIS .................................................................................................. 37
4.1 Market Failure: The Case for Government Intervention .............................. 37
4.2 Beyond Welfare Economics: Empowerment of the Urban Poor ................. 40
4.3 Managing Urban Development: Bridging the Ideal and the Real ................ 41
4.4 Summary ...................................................................................................... 43

5 SYNTHESIS ................................................................................................ 45
5.1 Evaluation Research Questions and Methodology ....................................... 45

APPENDIX .............................................................................................................. 47

REFERENCES ......................................................................................................... 50

ii
CERTIFICATION

18 July 2004

I, Wilfredo B. Prilles, Jr., certify that the attached dissertation is my own original work,

and that it does not exceed the permitted length.

Fitzwilliam College, Cambridge

iii
ACKNOWLEDGMENT

In bringing this nine-month project to reality, I am greatly indebted to the Ford

Foundation for the opportunity to experience Cambridge and be part of a great academic

institution under its International Fellowship Program (IFP).

I am also grateful for the help extended by the following individuals and group:

• Dr. John McCombie, my supervisor, for his wise counsel and kind

consideration of my particular circumstance

• Mr. Barry Moore, Dr. Peter Tyler, Dr. Nicola Morrison and Dr. Shailaja

Fennell for their invaluable insights on policy evaluation, housing and

development

• Mr. D.C. Nathan Sergio and Mr. Rolando Campillos, former and present head

of the Naga Urban Poor Affairs Office, respectively, for sharing key data and

understanding about the Kaantabay program, and

• The Central Cambridge Congregation of Jehovah’s Witnesses who helped ease

the burden of being away from my loved ones.

Of course, everything would not have been possible without my wife Lynn; our

children Ezekiel, Jack Ryan, Sofia Loraine, Hilary Joan and Patricia Anne; my mother-in-

law, Corazon Reoveros; and my parents, Wilfredo, Sr. and Helen Prilles. Their abiding

faith, boundless understanding and untold sacrifices enabled me to live a dream. To them,

this work is lovingly dedicated.

iv
ABSTRACT

The city of Naga in the Philippines has been implementing a social housing

program called “Kaantabay sa Kauswagan” since 1989. Focusing on providing affordable

homelots to urban poor residents of the city, the program exhibits key elements of the

Global Campaign for Secure Tenure launched by UN-HABITAT to attain the Millennium

Development Goal of bringing 100 million residents out of slum conditions worldwide by

2020. Arguing that the program is ripe for policy evaluation, the study takes a close look

by profiling the Kaantabay program and subjecting it to institutional analysis that takes

account of its economic, social and political dimensions. The profile shows a local

authority that succeeded in mobilizing community resources to multiply its own; in

implementing creative approaches to land acquisition through tripartism; and in addressing

social exclusion by empowering the urban poor sector. The economic analysis explored

textbook justifications for the city government’s intervention in the local housing market

riddled with externalities and distributional failures. A multi-level social analysis informed

traditional sociological perspectives by demonstrating a parallel empowerment of the

urban poor alongside state-centered power dynamics involving the political elite. The

political analysis affirmed the mediating role of elected political leaders in managing

urban development that requires them to balance competing interest among stakeholders.

Additionally, it demonstrates that commitment to the public good, guided by the Smithian

concept of “enlightened self-interest” can be politically beneficial. On the basis of a

richer, more textured characterisation of the program using a multi-dimensional analytical

framework, it proposes a methodology and list of possible research questions for formal

evaluation of the Kaantabay program.

v
ABBREVIATIONS AND ACRONYMS

ACHR Asian Coalition of Housing Rights

ADB Asian Development Bank
ASH Assisted self-help
BLGF Bureau of Local Government Finance
CBA Cost-Benefit Analysis
CBBS Cost-Benefits Balance Sheet
CBD Central Business District
CEA Cost-Effectiveness Analysis
CMP Community Mortgage Program
COA Commission on Audit
COPE Community Organization of the Philippines Enterprise
CREBA Chamber of the Real Estate and Builder’s Association
FGD Focus group discussion
FIG Federation of International Surveyors
GCST Global Campaign for Secure Tenure
GFI Government Financial Institution
GUG Good urban governance
HUDDC Housing and Urban Development Coordinating Council
LCC Liberty Commercial Center
MDG Millennium Development Goals
NCPC Naga City People’s Council
NEDA National Economic Development Authority
NGO Non-government organizations
NHA National Housing Authority
P Philippine Peso
PFI Private Financial Institution
PO People’s organizations
ToP Technology of Participation
UK United Kingdom
UN United Nations
UNCHS United Nations Centre for Housing Settlements
UN-HABITAT United Nations Human Settlement Program
UPAO Urban Poor Affairs Office
US United States
USCIP Urban Shelter and Community Infrastructure Project
VFM Value for Money
WB World Bank

vi
LIST OF TABLES AND FIGURES

TABLES
Table Page

1. Housing Industry Profile, Philippines .......................................................... 14

2. Program Objectives, Kaantabay sa Kauswagan .......................................... 17

3. Completed and Ongoing Projects, Kaantabay sa

Kauswagan Program .................................................................................... 32

4. Operating Budget and Funding Sources, 1994-2000 .................................... 34

5. Comparative Land Acquisition Approaches, Kaantabay sa

Kauswagan Program ..................................................................................... 35

FIGURES
Figure Page

1. Conceptual Framework of the Case Study.................................................... 11

2. Location Map and Key Statistics on Naga ................................................... 12

3. The Naga Governance Framework .............................................................. 18

4. Kaantabay’s Role in Local Housing Efforts of the City

Government................................................................................................... 20

5. The Economics of the Kaantabay Program ................................................. 38

vii
1 INTRODUCTION

On October 1, 2000, the eve of World Habitat Day, the United Nations Human

Settlements Programme (UN-HABITAT) held the African launch of the Global Campaign

for Secure Tenure in Durban, South Africa. This global advocacy, a key thrust of the

human settlements arm of the UN system, seeks to address poverty and homelessness and

has now been adopted in a number of countries worldwide.

One of the invited guests to keynote the launch is the former city mayor of Naga, a

small city in central Philippines, around 7,000 miles away from South Africa. On the

surface, the choice of Mayor Jesse M. Robredo seems to reinforce the internationality of

the event; but there is logic to it as well. Under Robredo’s leadership, Naga had been

implementing a secure tenure program called “Kaantabay sa Kauswagan” (literally,

partners in development) for more than a decade, apparently with a good measure of

success.

1.1 PROGRAM BACKGROUND

Conceptually, the program (hereinafter referred to as Kaantabay) is a form of

social housing. At its core is securing tenurial rights for urban poor beneficiaries. This is

accomplished by acquiring the landholding they are occupying through various innovative

schemes, with the city government playing a critical facilitative and mediating role. When

negotiations are completed, the beneficiaries are then able to amortize their homelots

under very affordable terms through community mortgage. When the landholding is fully

paid up, property rights to individual homelots are transferred to beneficiaries, thereby

facilitating asset building by the poor.

1
 But Kaantabay is more than just a simple social housing initiative by the local

state. As an urban poverty program, it addresses the difficult challenges being faced by

local authorities and urban managers, particularly in developing countries. Anna

Kajumulo Tibaijuka, UN-HABITAT executive director, described some of these

challenges:

Lack of access to land, and fear of eviction, epitomise a more pervasive

exclusion from mainstream social, economic and civic opportunities,
especially for women. Precarious conditions generate poverty as people
have no future in which to invest. As their numbers keep mounting, the
prospects for our collective sustainable urban development look bleak.
(UN-HABITAT 2003a, 6)

Crafted in response to a petition for government assistance by nine urban poor

organizations during a visit to Naga by then President Corazon Aquino late in 1987, the

Kaantabay program appears to have gone a long way in meeting the challenges described

by Tibaijuka.

In 1994, it won the Gantimpalang Panlingkod Pook (Galing Pook) award as one of

the country’s 20 most outstanding local government programs. In 1996, the UN Centre

for Housing Settlements (UNCHS, now UN-HABITAT) cited it as one of the world’s 40

best practices during the second City Summit in Istanbul, Turkey. It also received a similar

recognition from the UK-based Building and Social Housing Foundation (BSHF).

1.2 THE GLOBAL CAMPAIGN FOR SECURE TENURE

The Global Campaign for Secure Tenure (GCST) is one of two parallel advocacies

being pursued by UN-HABITAT, the other focusing on good urban governance (GUG).

The campaign seeks to implement the Habitat Agenda adopted during the Istanbul City

Summit in 1996, where “affordable shelter for all” became an overarching goal. In 2000,

it became part of the Millennium Development Goals (MDG) adopted by the UN General

2
Assembly. Item 11 of the 18 targets comprising the MDG aims to bring out 100 million

residents out of slum conditions by 2020 (Tebbal and Ray 2001).

It is a relatively modest target, representing only 10% of the estimated 1 billion

population worldwide that live in slums and shanty towns. And unless the campaign bears

fruit, the number is only expected to go higher as two-thirds of the global population shall

be living in cities by 2050, when the MDG is supposed to have been long attained.

The magnitude of the problem has clear economic implications. The current shelter

strategy, which has viewed slums in a kinder, more positive light, is an offshoot of failed

housing policies of the ‘60s and ‘70s, particularly resource-intensive publicly provided

housing. Securing tenurial right for the burgeoning urban poor population is a key

element of this strategy, owing to its catalytic effect. According to UN-HABITAT, secure

tenure “invariably leads to other processes and issues vital to sustainable shelter delivery

and upgrading. Countless examples reveal that when people are given security of tenure,

they tend to invest in the improvement of their homes and neighbourhoods (Cobbett

2001).”

Of course, this assisted self-help (ASH) approach that taps into community

resources is a pragmatic strategy as well, given the widening gap between growing

demand on one hand, and the budgetary constraints facing both governments as well as

international development institutions worldwide on the other.

1.3 RESEARCH QUESTIONS

The emerging experience arising from the campaign’s implementation worldwide,

particularly in Latin America, India and Africa, have spelled out key principles and

concepts that go beyond the ambit of basic shelter provision. They include housing rights

for all; security of tenure as essential for city stability, human dignity and urban

development; gender equity; partnership; negotiated resettlements instead of forced

3
evictions; transparent and open land markets to fight corruption and reduce speculation;

and land availability to meet the needs of urban poor (Tebbal and Ray 2001).

These key principles and concepts already go beyond UN-HABITAT’s definition

of security of tenure, well into the realm of sustainable urban development and good

governance. Essentially, they represent a bridging of its two parallel global campaigns,

which is what the Naga experience is all about.

In view of the foregoing, a case can be made for subjecting the Kaantabay program

to formal policy evaluation. By predating the GCST by around 10 years, it can provide a

useful benchmark for the effectiveness and efficiency of the global advocacy. By

addressing as well the GUG norms as envisioned under UN-HABITAT’s parallel global

campaign, it can contribute to ongoing research on good governance in an urban context,

especially for developing countries. By embodying the essential features of a poverty

reduction program as conceptualized by international development agencies, particularly

the World Bank, it can inform and enrich the growing body of literature on poverty.

But before embarking on such exercise, a close look at the “secure tenure”

program is needed to lay down the groundwork for a more robust, systematic evaluation.

This study therefore seeks to examine the program by seeking answers to the following

questions: a) How does the “Kaantabay sa Kauswagan” program work? What has it

accomplished? b) What conditions impelled the need to introduce the program in Naga

City? c) In what ways does it operationalize the “secure tenure” campaign of UN-

HABITAT?

1.4 STRUCTURE OF THE RESEARCH

The investigation will use the case study method in answering the research

questions. Case study is a method used to study an individual or an institution in a unique

setting or situation in as intense and as detailed a manner as possible (Salkind 1997, 211).

4
 Chapter 2 begins by providing a theoretical perspective to the study. It looks at the

nature of poverty and “secure tenure” which form the interrelated foundational concepts

behind the Kaantabay program. Based on relevant theories underpinning these concepts,

it builds a theoretical and conceptual framework that will guide the analytical part of the

study.

Chapter 3 addresses the first research question. It looks at secondary data from the

city government, particularly documentation developed by the Urban Poor Affairs Office

(UPAO) to build a program profile. These will be supplemented by background

information on Naga drawn from existing city profiles, indicators and datasets on Naga

available from websites of the Asian Development Bank (ADB) and the World Bank.

Using data from the program profile, Chapter 4 tackles the second and third

research questions by analyzing its economic, social and political dimensions in the

context of the framework laid out in Chapter 2. An economic analysis of the local housing

market examines the justification for government intervention through the program. A

socio-political analysis looks at how the program has managed to pursue a successful

“secure tenure” campaign at the local level.

Chapter 5 synthesizes highlights of the study, with the end view of specifying

possible research questions that can form part of a formal evaluation of the Kaantabay

program.

5
2 THEORETICAL AND CONCEPTUAL FRAMEWORK

This chapter develops a theoretical framework that will be used in analyzing the

Kaantabay program, anchored on theories underpinning the interrelated foundational

concepts of poverty and “secure tenure.”

2.1 KEY CONCEPTS BEHIND THE KAANTABAY PROGRAM

2.1.1 Poverty

Poverty is usually associated with economic well-being, a function of lowness of

income. According to a World Bank economist, “poverty can be said to exist in a given

society when one or more persons do not attain a level of economic well-being deemed to

constitute a reasonable minimum by the standards of that society (Ravallion 1994).”

In the last two decades however, mainly as a result of Sen’s works on the subject,

poverty has come to be viewed as a multi-dimensional phenomenon of deprivation and

vulnerability. In characterizing urban poverty, the World Bank website on “Urban

Development” identifies five dimensions of deprivation: income poverty; health poverty;

education poverty; personal and tenure insecurity; and disempowerment. In urban areas,

these types of deprivation often tend to feed off each other, resulting in cumulative

deprivation where one dimension of poverty is often the cause or contributor to another

(World Bank n.d.).

Moser’s (1998) vulnerability framework is also a useful analytical tool.

Vulnerability is defined as “a dynamic concept of susceptibility to risks of falling into

poverty.” It is closely linked with asset ownership, on the pretext that the more assets

people have, the less vulnerable they are, and the greater the erosion of people’s assets, the

greater their insecurity. Like deprivation, vulnerability is associated with five types of

6
assets: labour; human capital (health, education, skills and ability to work); productive

assets (of which housing is the most important); household relations; and social capital.

Finally, social exclusion is another important notion in the discussion of poverty.

It is associated with depriving somebody from any right previously granted, or normally

granted, to those recognized as full members of a given community or society (World

Bank 2001, 22). Its relevance to poverty arises from shifting the concept away from

merely focusing on the issues of income inequality and material exclusion dominant in the

Anglo-Saxon view to incorporate the social and cultural dimension of the exclusionary

processes emphasized by the French corporatist model. It is even contended that “social

exclusion is broader than poverty in considering issues of social participation and rights

realization, as well as processes.”

In explaining the advantage of bringing in social exclusion as a complementary

concept, the same technical note argues:

Beyond being “goods-centered”, the analysis of social exclusion is “people-

centered” and “institutions-centered”. It also contains both an objective and
subjective dimension, to the degree that it considers both the objective
conditions of people’s lives and their perceptions of being connected or
disconnected from wider spheres of social, political and cultural life….The
value added by a social exclusion perspective lies in the emphasis on
dynamic processes where both institutions and agents are involved. (World
Bank 2001, 23)

2.1.2 Secure tenure

Secure tenure is still an evolving concept, owing to different situations that vary

between countries and regions.

UN-HABITAT’s definition is primarily concerned with the protection of an

individual against involuntary removal from land or residential property.

Security of tenure describes an agreement between an individual or group to

land and residential property which is governed and regulated by a legal and
administrative framework. Security derives from the fact that the right of
access to and use of the land and property is underwritten by a known set of

7
 rules, and that this right is justiciable. Tenure can be effected in a variety of
ways, depending on constitutional and legal frameworks, social norms,
cultural values and, to some extent, individual preference. (UN-HABITAT
n.d.)

Notwithstanding international variation, UN-HABITAT has generalized those necessary

for the goal of “affordable shelter for all” as a continuum of tenure types: from the

weakest (perceived tenure security) to the strongest (freehold titles/deeds).

A relatively more expansive definition advanced by the Federation of International

Surveyors (FIG) comprises of three elements, two of which have economic dimensions:

protection against eviction; the possibility of selling, and transferring rights through

inheritance; and the possibility of having a mortgage and access to credit under certain

conditions (UN-HABITAT 2003a, 7-8).

2.2 THEORETICAL FOUNDATIONS

2.2.1 Capabilities theory

The individual is central to Sen’s (1999) theory; he argues that development

becomes meaningful only if it guarantees an individual’s attainment of certain freedoms or

capabilities, including economic, social and political. To Sen, political freedoms,

economic facilities, social opportunities, transparency guarantees and protective security

are the key instrumental freedoms that tend to contribute to the general capability of a

person to live more freely (Sen 1999, 38-40).

The capabilities theory recognizes the multi-dimensionality of poverty. While

conceding that shortage of income is a major cause, Sen contends that poverty actually

arises from the inability of certain functionings by an individual that collectively limits his

capabilities. Thus, as well as unemployment (resulting to income poverty), lack of access

to education, health care, and political rights (forms of non-income poverty) inhibits an

individual to function fully well—and hence, dimensions of capability deprivation.

8
 Consequently, economic growth, in Sen’s conception, is seen only as a means to,

not as an end of, development—insofar as it contributes to an individual’s attainment of

freedoms.

2.2.2 Market failure

Market failure provides the fundamental rationale for government intervention in

markets (Stiglitz 2000, 77). Theoretically, a perfectly competitive market freely decides

what, how and for whom to produce in the most efficient way, as if guided by what Adam

Smith called an “invisible hand” (Begg, Fischer and Dornbusch 2003, 8-9).

But in the real world, market failures exist, preventing market systems from

achieving allocative and productive efficiency. Whitehead (2003) said this applies to

housing, which suffers from significant market failures, particularly at the bottom end.

Among others, this is ascribed to direct, interactive and intergenerational externalities that

lead to underinvestment in both new development and improvement of existing stocks.

These externalities are compounded by lack of information and information asymmetry

that put consumers at disadvantage.

Further, the housing market is characterized by continual disequilibrium which

results to distributional issues that mostly affects the poor. Stiglitz (2000) points out that

income distributional issues provide an impetus for government intervention in the market.

In particular, barriers to capital or asset-building by the poor are central to De Soto’s

(2000) controversial thesis that the absence of legally integrated property systems that can

convert their “dead capital” is the main reason why capitalism has triumphed in the West

and failed elsewhere.

2.2.3 Political economy

In the real world as well, policymaking does not exist in a vacuum.

9
 Acocella (1998) ascribes this to the following realities: (1) The economic system is

not composed of anonymous agents but rather of classes or groups of individuals with

shared characteristics or needs. These individuals tend organize and act jointly to ensure

that their preferences prevail over those of other groups. (2) Policymakers are equally not

anonymous representatives of the public interest but can in fact be divided into politicians

and bureaucrats who are faced with agency problems.

The study of political economy employs the concepts of power, class and

institutions (which traditionally belong to the realm of other social sciences) in

approaching economic problems. While the approach lacks a clear and unifying

conceptual structure, it offers valuable insights for a more realistic treatment of economic

policy problems (Acocella 1998, 204).

For instance, the interest group theory advanced by the public choice school holds

that government actions are a reflection of the pressure exerted by interest groups that

exist in society, both in terms of general policy attitudes or more specific interventions.

Healy’s communicative planning theory underscores the political aspect of the

planning process, where mediation and facilitation between competing interests among

stakeholders become as important as the rational-technical-scientific dimension of it

(Rydin 1998, 12).

In the urban political economy, Knox (1984) speaks of community power

structures and the role of the local state. While there is no properly developed and

generally accepted theory of the behaviour and objectives of local government, or the

“local state,” the dominant managerialist view holds that focusing on the activities and

ideologies of professional decision-makers can contribute a lot to the understanding of

urban sociospatial processes.

10
2.3 CONCEPTUAL FRAMEWORK

As pointed out in Chapter 1, the Kaantabay program is quite unique in the sense

that it is a social housing program with strong poverty and governance dimensions. As

such, there is a need to assess it from a multi-dimensional perspective, factoring in the

economic, social and political elements in the analysis.

Viewed at another level, the program represents the interplay between three local

institutions: the housing market, the local state and a segment of the local civil society (i.e.

the urban poor). The situation therefore lends to institutional analysis as the most

appropriate analytical approach, similar to the framework used by O’Sullivan and Gibb

(2003). It is envisioned that the combination and triangulation of these perspectives will

contribute to a richer and more textured scrutiny of the program.

Figure 1 illustrates how the study is sequenced to bring these elements together.

CHAPTER 2 CHAPTER 4 CHAPTER 5

Theoretical Frame Analysis Synthesis

Foundational
concepts
and theories

Economic
CHAPTER 3
Program Profile Policy
evaluation
research
Local & Social Political questions
National
Context

Program
Profile

INPUT THROUGHPUT OUTPUT

Fig 1. Conceptual Framework of the Case Study

11
3 THE KAANTABAY SA KAUSWAGAN PROGRAM:
A PROFILE

This chapter profiles the Kaantabay sa Kauswagan program. It begins by looking

at the local context, as well as the local and national housing markets. Using secondary

data from the city government supplemented by other background information on Naga, it

details the program mechanics, including the governance framework upon which

Kaantabay was anchored, as well as its physical, social and financial aspects.

Naga in a nutshell
Population (2000) 140,325
Number of households 25,986
Per capita gross city product (1998) US$1,953
Average annual family income US$4,620
Poverty incidence 29%

Fig. 2. Location map and key statistics on Naga

12
2.1 THE SETTING

Naga City, with a population of around 140,000, is centrally located in Bicol, a

region comprising the southernmost portion of Luzon island in the Philippines. It is about

200 miles southeast of Manila, the country's capital (Fig. 2).

As a city, Naga is one of the Philippines' oldest. Originally called Ciudad de

Nueva Caceres, it was one of the five original cities created by royal Spanish decree in the

late 16th century. It is seat of the 400-year old Archdiocese of Nueva Caceres that

oversees the predominantly catholic region famous for the beautifully shaped but fiery

Mayon volcano.

Over the years, Naga has grown to become the religious, educational and business

centre of Bicol, one of the country's 15 administrative regions. Today, it has developed a

reputation for being a centre for innovations in local governance. In 1998, Naga received

the Dubai International Award for having one of the Top 10 Best Practices worldwide in

its unique participatory planning practices. In December 1999, the Asiaweek

newsmagazine cited it one of four most improved cities in Asia. And early this year, three

UN entities recognized its outstanding achievements in two areas: as one of the Women-

Friendly Cities of Asia-Pacific by UN-HABITAT and the United Nations Fund for

Women (UNIFEM); and Public Service Award for being a local e-government by the

United Nations Online Public Administration and Finance (UNPAN).1

2.2 THE LOCAL HOUSING MARKET

The housing market in Naga mirrors that of the Philippines, which is a

combination of both informal and formal housing delivery.

2.2.1 Formal, informal housing

1
More information on Naga City is available from the website of the city government at www.naga.gov.ph.

13
 Government data shows that up to 40% of the total household population rely on

informal housing mechanisms to meet their shelter needs (HUDCC n.d.). Independent

estimates by the Global Urban Observatory place the number of slum dwellers a shade

higher at 44% (UN-HABITAT 2003b, 88). This indicates the presence of considerable

informal settlements, characterized by congestion and very poor living conditions,

throughout most urban areas of the country.

Of the 40%, the bottom 12% relies exclusively on informal housing, which is

financed either through self-help or through informal credit. The rest are able to access

some type of formal financing from existing government programs for low-income

households to augment whatever they can raise informally.

Table 1. HOUSING INDUSTRY PROFILE, PHILIPPINES

Variable Socialized Housing Low-Cost or Economic Open Housing
(P180,000 and below) (P180,000-P500,000) (P500,000-P5,000,000)
Type of dwelling Row houses, single Town houses, condos, Office residential units,
detached units, walk-up single detached units, resorts, leisure
buildings, etc. etc. properties
Demand Growing at 5% yearly Growing at 2% yearly n.a.
Supply 61,000 units yearly 47,000 units yearly 4,000 units yearly
Interest rate 9% 12-16% Market
n.a. – Not available
Sources: HUDCC website (www.hudcc.gov.ph); CREBA

In the formal housing market, which serves the relatively better-off segment of the

population, there are generally three types of housing products: socialized, middle-class

and high end. Their respective attributes are presented in Table 1.

2.2.2 Housing policy

Housing policy is coordinated by the Housing and Urban Development

Coordinating Council (HUDDC), the country’s highest policymaking entity on shelter that

works under the Office of the President. HUDCC is a government-dominated body with

some private sector and civil society representation.

14
 Over the last three years under the Arroyo administration, a pronounced shift in

housing policy was noted which explicitly gives priority attention to shelter needs of the

bottom 40%. This is enunciated under the 2001-04 Medium-Term Philippine

Development Plan whose policy directions state:

The government's housing efforts will be mainly directed at the bottom

40 percent of households because of their inability to access the formal
housing markets. This will mean providing these households with affordable
socialized housing through efficient production of housing units for
ownership or rental and sustainable housing finance. Intervention in the
housing markets shall aim to improve the efficiency of that market, with the
private sector taking the lead in the production and financing of housing
units. Where necessary and to the extent that the government’s fiscal
position may warrant, efficiently targeted subsidies will be utilized to make
those units affordable. (NEDA n.d.)

2.2.3 Housing supply and demand

In the formal sector, housing is delivered by private sector developers, which have

organized themselves through the Chamber of the Real Estate and Builder’s Association

(CREBA). For the informal sector, the government is engaged in direct shelter production

through the National Housing Authority (NHA). Its activities focus on slum upgrading,

squatter relocation, development of sites and services and construction of core housing

units.

From 1998-2000, around 112,000 housing packages against a target of 130,000

were delivered annually through formal housing. This contributed to further worsening of

the housing backlog, estimated to reach 1.1 million for the 2001-04 planning period. This

is apart from 2.2 million units required by new households, bringing total housing need to

3.3 million or an average of 1.1 million every year (HUDCC n.d.).

Locally, official data show that in 1995, Naga's housing backlog stood at 6,400 and

was projected to increase to 7,400 by 2000 without strong government intervention. The

backlog is mainly a function of access to formal financing. Mortgage financing is largely

15
untapped, covering only 8% of total dwellings in the city, and underdeveloped, indicated

by a low 8% mortgage-to-credit ratio (ADB 2001, 215-220).

2.2.4 Consumer profile

Compared to the rest of the country, income of city residents compare favourably.

In 1998, average household income stood at US$4,620 per annum, 42% higher than the

Philippine average and 126% higher than the average Bicol household.

Shelter-related expenditures take up 21% of the household income. The bulk is

spent on food (44%). Travel, utilities, health, education and other smaller expense items

account for the rest.

In terms of tenure, there is a marked difference between housing and homelot

ownership. While 72% of households own their housing unit, only 44% actually own their

respective homelots. The difference is not as pronounced among renters, as only 18%

rents their housing unit as against 23% who rent their homelots.

More than half of the total housing stock (52%) was built by the households

themselves, often with help from friends and relatives. Only around 27% were purchased

from the formal housing market, again indicating its limited extent in addressing shelter

needs. About 18% were built by hired contractors or skilled workers, usually in close

coordination with the homeowner.

And of the homeowning segment, more than 90% have used own resources in

building their homes, again indicating very limited access to formal financing.

2.3 THE KAANTABAY SA KAUSWAGAN PROGRAM

2.3.1 Beginnings

The Kaantabay sa Kauswagan program came to life on May 15, 1989 when the

city government organized its Urban Poor Affairs Office (UPAO), an agency dedicated to

squarely addressing the needs of its growing urban poor population.

16
 The agency was created by the administration of Mayor Jesse M. Robredo after

nine urban poor organizations brought their plight to the national government’s attention

during a visit to Naga by then President Corazon Aquino late in 1987. By initiating the

program, Naga became the first Philippine city to recognize the urgency of addressing the

urban poor phenomenon at the local level. By organizing UPAO, it also became one of

the first local governments in the Philippines to establish a dedicated office for urban poor

concerns.

In this undertaking, a non-government organization called Community

Organization of the Philippines Enterprise (COPE) Foundation helped the city government

operationalize its UPAO.

2.3.2 Goals and objectives

The program seeks to achieve three overarching goals:

1. Normalization and/or regularization. By addressing tenurial issues relative

to homelots for the urban poor of Naga, the program seeks to give their communities a

sense of permanence and legitimacy, either on-site or off-site.

2. Poverty reduction. By helping the urban poor of Naga build capital, the

program seeks to promote their socioeconomic empowerment.

Table 2. PROGRAM OBJECTIVES, KAANTABAY SA KAUSWAGAN

Short term Long term
1. To provide permanent solutions to all 1. To empower the urban poor sector in
land tenurial problems involving the Naga City by providing homelots, basic
urban poor; infrastructure and services, as well as
2. To uplift the living condition of urban poor livelihood opportunities to all in need;
residents in the city; 2. To strengthen the urban poor sector and
3. To eradicate arbitrary ejection and heighten their participation in local
minimize incidence of eviction/demolition; governance; and
and 3. To integrate the urban poor in the
4. To explore alternative modes of land mainstream of development and make
acquisition. them more productive members of
society.
Source: Urban Poor Affairs Office, Naga City

17
 3. Urban upgrading. To complement the tenurial aspect, the program also

seeks to facilitate upgrading of blighted communities by providing them basic

infrastructure and facilities, thereby restoring decency, ease and comfort to daily life.

Attainment of these goals is predicated on the time-bound objectives presented in

Table 2.

2.4 PROGRAM MECHANICS

The existence of many non-government (NGOs) and people’s organizations (POs)

in Naga has ensured that all major city programs are founded on partnerships and

participation.

2.4.1 Conceptual framework: Partnerships and participation

Unlike other local authorities who were reluctant in working with NGOs and POs,

the city government seriously implemented provisions of the 1991 Local Government

promoting partnerships with these organizations. After the Code was passed, Naga was

among the first to pursue the mandate on NGO accreditation. During its first run in 1993,

close to 80 applied with the city council and were duly accredited.

Four years later, it

took the concept a step

further. A landmark

legislation mandated the

city government to initiate

the establishment of a

system of partnership

where the federation of

these NGOs and POs into

Fig. 3. The Naga Governance Framework

18
the Naga City People’s Council (NCPC) was encouraged. This institutionalized a system

of self-regulation among their ranks.

The emphasis on partnerships and participation is evident in the governance

framework developed by the Robredo administration (Fig. 3). In this framework, three

elements form the foundation of GUG:

• Progressive perspective. This component lies at the apex of the triangle, being a

function of leadership which the local administration must provide. Among others, a

progressive perspective seeks to build prosperity for the community at large, tempered by

an enlightened perception of the poor.

• Functional partnerships. These are vehicles that enable the local authority to

tap community resources for priority undertakings, in the process multiplying its capacity

and enabling it to overcome resource constraints that usually hamper government.

• Participation. These are mechanisms ensure long-term sustainability by

generating broad-based stakeholdership and community ownership by both organized

groups and individuals over local undertakings.

2.4.2 Physical aspect: Land acquisition and area upgrading

The Kaantabay program focuses on the urban poor sector’s two main problems:

(1) the absence of security of land tenure, and (2) the lack of basic infrastructure and

facilities in their communities. In response, the program focuses on two main physical

components: land acquisition and area upgrading. By addressing both, the program

becomes more comprehensive in its approach to the urban poor problem by responding to

needs of both the individual household and their community.

Land acquisition

Land acquisition is the heart of the Kaantabay program. It facilitates the granting

of tenurial rights over a homelot to an urban poor household, culminating in the issuance

19
of a property title once payment is completed. In the process, it can directly contribute to

poverty reduction by actualizing capital building for the poorer segments of society.

Figure 4 shows how the program’s focus on the homelot is a strategic choice that

forms the basis for organizing housing efforts by the state.

On-site vs. off-site. There are two categories of land acquisition projects under the

program: on-site and off-site.

Basically focusing on existing urban poor communities, on-site projects include

the following activities: a) Negotiation with landowners; b) Purchase of property through

one or a combination of modes of land acquisition; c) Screening and selection of qualified

beneficiaries; d) Subdivision and disposition of homelots to individual beneficiaries; and

e) Community upgrading.

Off-site projects, on the other hand, focus on the establishment and development of

relocation sites to serve as "safety nets" for extreme cases of eviction and demolition. It

Fig. 4. Kaantabay’s role in local housing efforts of the city government. It

complements other social housing initiatives by both the national government and
NGOs, i.e. the Core Shelter, Gawad Kalinga and Habitat for Humanity programs.

20
essentially involves: a) Site identification and negotiation with landowners; b) Purchase of

property through one or a combination of modes of land acquisition; and c) Site

development, including provision of basic and ancillary infrastructure facilities and

services

Coverage, project and homelot profile. Tables 3 to 5 at the end of the chapter

provide additional program details at the project, strategic and financial level. Table 3

describes the 41 projects being implemented under the program, showing the extent of its

coverage. As of October 31, 2001, the program has covered a total of 6,940 urban poor

households, representing 27 percent of the total. The figure is roughly 500 families shy of

the 7,400 low-income Naga households who live below poverty line.

In terms of direct benefit, 67 percent of the 6,940 households are on their way to

acquiring their property titles, having benefited from 27 completed projects under the

program. Negotiations are ongoing for 14 more projects that will cover the remaining 33

percent. Thus, for roughly 2 out of every 3 urban poor households in Naga, agreement has

been reached between the landowner, the urban poor association and the city government;

the tenurial status of the occupants is already secured; and they are in the process of

amortizing their homelots.

The table also shows that to date, the program has disposed a total of 62.6 hectares

under the 27 projects, with another 29.6 in the pipeline. In all, its portfolio covers a total

of 92.2 hectares in disposable lands, which translates to an average homelot size of 93 sq

meters per household, excluding provision for roads, pathways and open areas for each

project. Across projects, homelot size ranges from a generous 150 sq meters in rural

settlements formerly owned by the national government which were subsumed under the

program, to around 70-80 sq meters in urban poor communities ringing the periphery of

the city’s Central Business District (CBD).

21
 Aside from detailing program funding, Table 4 profiles the average urban poor

project across the 27 completed projects under Kaantabay. Over the seven-year period, a

typical completed project would cost around P3.3 million (£33,0002) or P467,646.06

(£4,676.46) annually.

Homelot affordability can be measured by reducing project cost to the level of each

beneficiary household. This is derived by getting the average number of household

beneficiaries per project from the table (172, the ratio of 4,635 families across 27

completed projects), and spreading the total project cost among beneficiaries. Thus, each

homelot would cost the average urban household a total of P19,032.11 (£190.32) over

seven years, or P2,718.87 (£27.19) annually. This translates to a monthly amortization of

P227 (£2.27, roughly a local labourer’s minimum daily wage) or around P7.55 (roughly 8

pence) daily, which is very affordable even for a low-income household.

Land acquisition modes. The program derives its strength from the innovative land

acquisition modes implemented both for on-site and off-site projects. These approaches

helped overcome resource limitations by reducing cost and mobilizing community and

external financing, thereby multiplying the city’s capability to do more with the same level

of resources.

Table 5 lists down and compares these approaches. Illustrative projects where

these approaches were applied are described in an appendix on page 48.

Area upgrading

Area upgrading seeks to give the program a face by facilitating community

improvement and basic service delivery. Implemented in conjunction with the land

acquisition component, this has also covered all 41 urban poor communities being assisted

by the city government under the program. From 1998-2000, around 10% of the city’s
2
An exchange rate of £1=P100 is used here to facilitate conversion. It is based on the actual rate for the first
half of 2004 that ranged between 98 and 107 pesos to a British pound. (Historical data on exchange rates
among global currencies can be secured from www.oanda.com/convert/fxhistory.)

22
Infrastructure Fund (placed at roughly P40 million [£400,000] annually) were spent on

urban renewal projects. From time to time, they are augmented by funding allotments

from the national government.

Urban renewal projects take various forms. They include construction or repair of

drainage lines; provision of public faucets and shallow wells; installation of street lights;

and concreting of pathways to improve access to and services within an urban poor

community.

Moreover, additional basic services are made available to the relocated urban

dwellers in off-site development projects. Education at the preschool, elementary and

secondary levels is provided through day care centres, and public elementary and high

schools. Health is accessible from the community health centre. Transportation services

are made possible through provision of access road, the opening of new routes passing

through the relocation sites, and public utility vehicles loaned out to local cooperatives.

Electric power service is supplied to individual households through Casureco II, the local

power retailer. Water service is progressively being supplied by the Metro Naga Water

District (which has been expanding its coverage area) and through communal water

systems for far-flung areas outside the network. Livelihood development is facilitated by

the extension of capital assistance through Metro Peso, the city government's micro-

finance arm, to local cooperatives and individual borrowers.

2.4.3 Social aspect: Community organizing and tripartism

At the operational level, the promotion of partnerships and participation is

embodied in two program thrusts: community organizing and tripartism.

Community organizing

Putting together a group of potential urban poor beneficiaries is a critical

requirement under the Kaantabay program. A policy of dealing only with urban poor

23
organizations, not individuals, compels interested applicants to take the initiative in

organizing themselves.

In implementing the program, the non-government sector has played a key role in

social preparation and community organizing. The city government recognizes that these

areas lie outside its core competence.

The partnership between City Hall and the COPE Foundation therefore made

sense. As a result of COPE’s efforts, from the original nine urban poor organizations in

1989 when Kaantabay begun, there are now close to 80 urban poor associations in the

city.

Tripartism

The program's effectiveness stems from a tripartite approach to urban poor

problem resolution, involving the a) city government and other national government

agencies; b) urban poor associations, aided by NGOs and POs; and c) private landowners.

This mechanism enables the involved parties to sit down and cooperate in solving their

disputes.

By adopting a pro-poor bias, the city government gives the program strength and

credibility. This bias is particularly manifested in its treatment of urban poor associations

as "partner-beneficiaries" which compels them to actively participate in every step of the

process. Meanwhile, national government agencies extend operational and financial

support to the program's land acquisition thrust.

Urban poor associations, on the other hand, signify their support and commitment

to the program through their willingness to negotiate get organized and raise equity if

necessary, including money for land acquisition and labour for urban upgrading projects.

24
 Finally, landowners show their cooperation through willingness to explore more

peaceful means of settling tenurial disputes as an alternative to ejection of urban poor

occupants and demolition of their makeshift shelters.

Other forms of community participation

In addition, community participation in the program is also indicated by the

following:

• Equity build-up. Members of urban poor associations in Naga continue to remit

their amortization and equity share in the Kaantabay Trust Fund, which helps the city in

meeting commitments to landowners.

• Strong community support for local tax collection. Notwithstanding the negative

impact of the Asian currency crisis in 1997, the ensuing economic downturn under the

administration of former President Joseph Estrada, as well as the diminishing share in

national allotments from the central government, the city continues to cope well because

of high tax collection efficiency.

Over the last decade, receipts from property and business taxes have been

increasing steadily, enabling the city to achieve a collection efficiency ranging from 87-

115% and a very satisfactory rating from the Bureau of Local Government Finance

(BLGF) of the national government. The willingness of local residents to remit tax money

to the local treasury is an indication of strong support for the city’s directions, including

the Kaantabay program.

2.4.4 Financial aspect: Cost recovery and project equity

Sound financial policies supportive of the program’s conceptual framework have

keyed Kaantabay’s sustainability over the past decade, especially the last seven years.

The turning point came in 1994, when the first of major land acquisition projects began to

get on-stream.

25
 These include (1) the “no-doleout” policy that discourages freeloading and

mendicancy and seeks to collect of all recoverable expenses by the city government under

the program, and (2) the project equity policy that operationalizes participation at the

project financing level. Together, they have elicited meaningful beneficiary involvement

from the onset of a particular land acquisition project until government has collected its

recoverable expenses.

Program funding

Table 4 presents the program’s seven-year operating budget and fund sources since

land acquisition projects took off in 1994, totalling P104.5 million (£1.045 million).

Current sources. Funding for Kaantabay is provided mainly by the city

government through its annual operating budget, augmented by short- and long-term

borrowings, grants from national shelter agencies and other program partners, equity

contribution by urban poor association members and one-time counterpart investments by

the private sector involved on a project basis.

Of the total, around 20% is funded out of the annual city budget, mainly for

operation and maintenance of UPAO and part of land development costs. Around half

(51%) comes from short- and long-term borrowings guaranteed by the city government,

which finances land acquisition through community mortgage arrangements. Grants from

national shelter agencies and other program partners account for around 12%, covering the

bulk of land development. The remaining 17% is allocated for cost of money, which is to

be covered by the program’s internal cash generation.

From time to time, the program also receives donations and counterpart funding

from various program partners on project basis. In 1994, it received a US$1,000 donation

from the Asian Coalition of Housing Rights (ACHR). The following year, the Pacol Site

Development Project was given a P11.6 million (£116,000) grant by the NHA. In 1998,

26
the Liberty Commercial Center (LCC) Group of Companies spent an estimated P4.5

million (£45,000) for land acquisition of what is now the Metroville Housing Project.

Future sources. By virtue of City Ordinance No. 98-033, otherwise known as the

Kaantabay sa Kauswagan Ordinance of 1998, the city is mandated to allocate 10% of its

annual budget, net of personal services, for the program and its various activities. This

legislation is a concrete step taken by the Robredo administration to help ensure long-term

sustainability.

In addition, Naga has been identified as one of the four priority Philippine cities

covered by the US$2.13-million World Bank-funded Urban Shelter and Community

Infrastructure Project (USCIP). The project, which seeks to test the feasibility of

implementing local government-led urban upgrading initiatives, will benefit 4 of the 41

communities covered by the Kaantabay program.

Cost recovery

Variants of community mortgage being pursued under Kaantabay ensure cost

recovery over time, anchored on the principle of shared pain and gain among program

beneficiaries. This principle affirms the dignity of even the poorest sectors of society; by

giving beneficiaries the opportunity to pay for their homelots under affordable

amortization schemes, they not only build capital but also acquire it the proper way. Thus,

the program’s cost recovery mechanism enables them to become real “homeowners,” not

just plain "squatters" or "slum dwellers".

Cost items. Essentially, the program has four major cost items: land acquisition,

land development, operations and cost of money. Land acquisition covers payments for

the cost of land for on-site and off-site development. Land development represents

expenses incurred in land preparation and development, specifically for off-site relocation

areas, and area upgrading for on-site projects. Operating expenses represent the cost of

27
operating and maintaining the UPAO. Cost of money covers interest expenses incurred in

financing land acquisition, based on the project cost net of beneficiaries equity assumed at

the 10% minimum. Interest rate is set at 9% per annum compounded annually.

Of these, only land acquisition, land development and cost of money are

considered recoverable expenses under the program. Over the last seven years, they

amounted to P88.4 million (£884,000) or roughly 84.5% of the total program cost. On an

annual basis, this translates to P12.6 million (£126,000) in recoverable expenses.

Collection efficiency. Before the economic downturn caused by the Asian

economic crisis in and the crisis-ridden Estrada administration, the program was doing

quite well. In 1998, a special audit team of the Commission on Audit (COA) Regional

Office conducted a two-month “Value for Money Audit” study. One of the salient

findings presented to city officials during an exit conference in December 1998

established the program's collection efficiency rate at 73%.

Over the last two years however, payments have started to fall behind. UPAO’s

collection status report as of December 2000 placed accrued collections at 30% of the

total, with accounts payable reaching 35%. This impelled a management review that

resulted to the adoption and implementation of a number of contingency measures,

including an amnesty program implemented beginning July 2001 that condoned all

penalties and surcharges to encourage updating of payments and a work-for-pay program

(the Bayadnihan) directed at non-paying low-income households. The program is also

considering proposals for restructuring of current amortization schedules that would

extend term beyond the current 7-year maximum.

Project equity

Another strategy is the build-up of project equity from target beneficiaries,

especially for on-site development projects. While negotiation is taking place and there is

28
already assurance that the owner would sell his property, the city government starts

collecting money.

When the negotiation has been finalized and a contract executed, the city

government, in consultation with the community association, sets certain percentage of the

land acquisition cost as project equity. This equity ranges from 10 to 50 percent of the

acquisition cost, depending on the agreement reached between the parties.

The Kaantabay Trust Fund

A support mechanism to the “no-doleout” and project equity policies, the

Kaantabay Trust Fund for Socialized Housing and Resettlement was set up in November

17, 1993 by virtue of Ordinance No. 93-096, as amended.

The city administration has often used this trust fund to encourage beneficiaries to

amortize regularly so that the city can continue the program and assist other urban poor

families to also have homelots of their own. To illustrate: grants from outside source, like

the P11.6 million (£116,000) from the NHA, is being recovered by the city and placed in

the Trust Fund, which in turn can be used to establish another housing project. Thus, in a

worst-case scenario where internal cash generation of the program is unable to cover for

interest expense, the trust fund can bridge the gap.

At its peak, trust fund balance reached as high as P5 million (£50,000). On

October 31, 2001, it had a retained balance of P4.08 million (£40,800). The amount

represents 43% of the P9.5 million (£95,000) project equity being eyed for eight ongoing

projects under negotiation with an estimated acquisition cost of P94.8 million (£948,000).

Enhancing affordability

Key to the continued sustainability of the Kaantabay program is the continuing

affordability of homelots without sacrificing financial viability. This requires a balancing

act between fiscal discipline and the government’s social responsibility in uplifting the

29
poorest constituents of the city. This has yielded a mixture of cost-reduction and income-

enhancement strategies in program implementation.

Savings in land acquisition. Land acquisition stands out as priority area for cost

reduction, being the biggest cost item in program implementation. Apart from substantial

cost savings through proactive land banking and utilization of idle government lots, the

city also leveraged its reputation in negotiating lower acquisition cost for both on-site and

off-site development projects. As a result, the 27 completed projects were acquired at

prices 30% lower than prevailing market values, as indicated by property values of

adjoining lots. It is eyeing to bring savings up to between 40-50% in the 14 ongoing

projects, taking advantage of the prevailing buyers’ market in the property sector of the

local economy.

The Bayadnihan program. This new work-for-pay program enables urban poor

beneficiaries to settle their lot amortizations, whether current or past due, through

participation in the implementation or maintenance of the city’s infrastructure projects or

by rendering frontline services.

Allowable work that beneficiaries or their family members can take on include

construction of local infrastructure projects; maintenance of existing public infrastructure

such as buildings, drainage systems, water supply systems, electrical installations, city

streets and sports facilities; cleaning and beautification of public facilities such as city

streets, parks, plazas, playgrounds and street islands; garbage collection and disposal, and

other frontline services as may be determined by the city mayor.

2.5 SUMMARY

The Kaantabay sa Kauswagan program demonstrates that notwithstanding

resource constraints, a local authority can equalize opportunities for the poorest sector of

the population in a developing economy.

30
 At the conceptual level, the program addresses shelter problems brought about by

rapid urbanization in these areas by adopting a "partner-beneficiary" perspective in dealing

with clients. This approach sees the urban poor both as a program partner and beneficiary,

compelling them to actively participate in every step of problem resolution.

To maximize scarce resources, it adopts the strategy of focus that delimits program

coverage only to the urban poor sector in Naga and the homelot as core of the assistance

package for each household. In the process, it fashioned innovative approaches to land

acquisition, community development and project financing which enabled it to achieve

near universal coverage. It also overcame resource limitations that handicap national and

local government authorities.

Functional partnerships and a tripartite mechanism for resolving tenurial issues

form the backbone of program implementation. Through functional partnerships and

participation, the program has tapped the power of pooled community resources. The end

result is a local government that is able to do more with less.

Complementing it is a tripartite mechanism which enabled government, private

landowners and urban poor associations to work together in finding mutually acceptable

solutions, even to long-standing decades-old tenurial issues.

Management and financial strategies—particularly mechanisms of cost recovery

and the collection of project equity from beneficiaries—are expected to sustain

Kaantabay’s long-term viability, on top of other steps that promote program

institutionalization, community ownership, and participation.

31
 Table 3. COMPLETED AND ONGOING PROJECTS
Kaantabay sa Kauswagan Program
PROJECT NAME AREA NO. FAMILIES MODE OF ACQUISITION COST
(In Has.) ACQUISITION (In Philippine Pesos)
OFF-SITE PROJECTS
1. Abella Resettlement Project, Barangays Abella & Sta. Cruz 4.00 551 Negotiated Purchase 11,000,000.00
2. Calauag Resettlement Project 4.95 591 Negotiated Purchase 7,425,000.00
3. Cararayan P-1 Resettlement Project 5.84 219 Government Lots N/A
4. Cararayan P-2 Resettlement Project 2.00 65 Government Lots N/A
5. Del Rosario Resettlement Project 1.67 137 Negotiated Purchase 711,474.00
of foreclosed property
6. Isla Resettlement Project, Barangay Peñafrancia 1.13 81 Negotiated Purchase 1,325,324.00
7. Pacol Resettlement Project, Phase I 12.42 714 Negotiated Purchase 1,826,340.00
8. Panicuason Barangay Site 2.00 87 Negotiated Purchase 20,000.00
9. Sabang Puro (SPUKOI), Barangay Sabang 1.30 223 Land Sharing 3,900,000.00
10. Sabang Resettlement Project (Metroville) 1.70 184 Leveraged Land N/A
Sharing Plus
11. San Felipe Resettlement Project 1.00 98 Land Swapping 1,881,557.20
12. San Isidro Barangay Site 2.00 52 Government Lots 36,000.00
13. San Rafael Resettlement Project, Barangay Cararayan 10.01 433 Government Lots 150,000.00
14. BLISS-Cararayan Project, Barangay Cararayan 2.00 50 Government Lots 432,000.00
15. Happy Homes Resettlement Project, Barangay Balatas 0.60 62 Community-Initiated 3,000,000.00
Purchase
SUBTOTAL COMPLETED OFF-SITE PROJECTS 52.61 3,547 31,707,695.20
ON-SITE PROJECTS
1. Acacia Homeowners Association, Barangay Abella 0.30 52 CMP 753,000.00
2. Good Neighbors Homeowners Association, Barangay Igualdad 0.12 10 Negotiated Purchase 590,000.00
3. Igualdad Z-5 Homeowners Association 0.48 63 CMP N/A
4. Greenland Urban Poor Homeowners Association, Barangay Concepcion 0.87 52 City Property N/A
Pequeña
5. Lerma Urban Poor Association 0.30 78 CMP N/A
6. Lerma Z-2 Homeowners Association 0.14 23 Negotiated Purchase 471,750.00
7. Peñafrancia Service Coop. (Mitra) 5.50 428 Self-Help CMP 11,668,512.00

32
Table 3. COMPLETED AND ONGOING PROJECTS (Continued)
PROJECT NAME AREA NO. FAMILIES MODE OF ACQUISITION COST
(In Has.) ACQUISITION (In Philippine Pesos)
8. Pook Mangga Homeowners Association, Barangay Sta. Cruz 0.06 6 Negotiated Purchase 261,000.00
9. Tabuco Tenants Association 0.69 134 Negotiated Purchase 3,650,500.00
10. Calsada Neighborhood Association, Barangay Mabolo 0.39 56 Negotiated Purchase 1,936,000.00
11. Triangulo Urban Poor Homeowners Association, Inc. 0.96 139 Negotiated Purchase 2,016,000.00
12. Quinale Urban Poor Association, Inc., Barangay Tabuco 0.19 47 Negotiated Purchase 1,240,850.00
SUBTOTAL COMPLETED ON-SITE PROJECTS 9.99 1,088 22,587,612.00
TOTAL COMPLETED PROJECTS 62.60 4,635 54,295,307.20
ONGOING PROJECTS
1. Canda Neighborhood Association, Inc., Barangay Concepcion Pequeña 1.15 128 Under Negotiation 5,725,500.00
2. San Antonio Urban Poor Association, Inc., Barangay Concepcion 1.37 118 Under Negotiation 5,460,800.00
Pequeña
3. Azucena Homeowners Association, Inc., Barangay Calauag 0.34 35 Under Negotiation 3,713,000.00
4. Capilihan Homeowners Association, Inc., Barangay Calauag 1.79 110 On-going 5,313,600.00
5. Doña Clara Homeowners Association, Inc., Barangay Con. Pequeña 5.93 447 On-going 32,336,518.47
6. Queborac Relocation Site, Barangay Bagumbayan Sur 7.00 542 On-going 17,500,000.00
7. Villa Fulgentes Urban Kabisig Association, Inc., Barangay Sabang 0.85 103 Under Negotiation 8,510,000.00
8. San Andres Estate Neighborhood Association, Inc., Barangay 4.00 203 Under Negotiation 24,000,000.00
Peñafrancia
9. Concepcion Grande Z 5 Homeowners Association 0.75 76 Under Negotiation 14,924,000.00
10. Bagumbayan Sur/Norte Urban Poor Association, Barangays 0.74 23 Under Negotiation 7,379,000.00
Bagumbayan Sur & Norte
11. Central Business District II Residents Project, Barangays Triangulo & 0.70 169 Under Negotiation 7,000,000.00
Lerma
12. Tapas Urban Poor Association, Inc., Barangay Balatas 4.78 274 Eminent Domain TBD*
13. Tabuco-Ng Hua Urban Poor Association, Inc., Barangay Tabuco 0.06 47 Under Negotiation TBD
14. SPUKOI-Phase II, Barangay Sabang 0.10 30 Under Negotiation TBD
SUBTOTAL ONGOING PROJECTS 29.55 2,305 131,862,418.47
GRAND TOTAL COMPLETED AND ONGOING PROJECTS 92.15 6,940 186,157,725.67
Source: Urban Poor Affairs Office, Naga City

33
 Table 4. OPERATING BUDGET AND FUNDING SOURCES, 1994-2000
In Philippine Pesos
PARTICULARS UNIT COST 7-YEAR PERIOD ANNUAL FUNDING
SOURCES
Land Acquisition 54,295,307.20 7,756,472.46 • Beneficiaries’ equity (Minimum
On-site 22,587,612.00 of 10%)
Off-site 31,707,695.20 • Short- and long-term borrowings
Land Development Cost 16,498,119.00 2,356,874.14 • Grant from National Housing
Authority (70%)
• City Infrastructure Fund
Operating Cost • Annual UPAO budget
Personal Services 10,889,256.00 1,555,608.00 • Grants from donor agencies
Salaries 671,964.00
Wages 316,800.00
Other Personnel Benefits 566,844.00
Maintenance & Other Operating Expenses 1,771,000.00 253,000.00
Travelling Expenses 30,000.00
Communication Services 35,000.00
Gasoline and Oil, Spare Parts and Repairs 98,000.00
Supplies and Materials 60,000.00
Other Expenses 30,000.00
Capital Outlay 3,500,000.00 500,000.00
Cost of Money 17,591,679.53 2,513,097.08 Program’s internal cash
generation
TOTALS 104,545,361.73 14,935,051.68
Average Cost per Project 3,273,522.43 467,646.06
Average Cost per Household 19,032.11 2,718.87
Average Monthly Cost per Household 226.57
Source: Urban Poor Affairs Office, Naga City

34
 Table 5. COMPARATIVE LAND ACQUISITION APPROACHES
Kaantabay sa Kauswagan Program
MODE KEY FEATURES UPSIDE DOWNSIDE WHERE APPLICABLE
1. Conventional • A government financial institution (GFI) Does not need big amount Viability of national On-site development
community acquires title to an urban poor community of local resources, as this program can be affected projects near CBDs,
mortgage (CMP) • Property is subdivided among urban poor is provided through a by poor project where property values are
households national program implementation elsewhere higher
• Members of urban poor community amortizes
their respective homelots to GFI, usually
through an originator
2. Self-help • Local authority, instead of the GFI, provides Can be attractive to • Might require significant CMP projects abandoned
community bulk of financing requirement private financial amount of local by GFIs where the
mortgage • Urban poor community provides a significant institutions (PFIs) and government resources beneficiary community
amount of equity international development • Can affect quality of can raise significant equity
agencies, especially if other public services if
local authority has good not managed well
credit standing
3. Land sharing • Owner agrees to share landholding occupied Can spark urban renewal • May not accommodate Sizable occupied
by urban poor community by selling portion of in a blighted area due to all members of properties with high
the property combined public and community. Requires development potentials
• Owner gets choice portion (usually frontage) private investment alternative relocation
of the property sites for excess
• Shared portion is subdivided among urban households
poor households who amortize it under either • Might require local
straight CMP or the self-help variant government to provide
4. Leveraged land • Instead of sharing landholding under straight Can spark urban renewal infrastructure support as
sharing plus land sharing, property owner acquires an in a blighted area due to enticement
adjoining property and develops it into a combined public and
relocation area private investment
• Owner gets control over main landholding
• Adjoining property is subdivided among urban
poor households who amortize it under either
straight CMP or the self-help variant

35
Table 5. COMPARATIVE LAND ACQUISITION APPROACHES (Continued)
MODE KEY FEATURES UPSIDE DOWNSIDE WHERE APPLICABLE
5. Land swapping • Owner agrees to swap landholding occupied Does not need big amount • Dependent on On-site development
by urban poor community with another of of local resources, as availability of acceptable projects involving small to
roughly equal size or value, preferably without replacement landholding replacement property medium-sized properties
occupants is usually secured from • Becomes costly if local in peripheries of the CBD
• Swapped property is subdivided among urban land banking portfolio of authority did not engage
poor households who amortize it under either the local authority in proactive land
straight CMP or the self-help variant banking
6. Community- • In this variant of the self-help community Does not need big amount On-site development
initiated mortgage, the urban poor community puts up of local resources, as projects involving in
purchase at least half of the total project cost community puts up high relatively well-off urban
• Property is subdivided among households level of equity poor community
who amortize the balance
7. Proactive land • Essentially the acquisition of raw landholdings, Brings down significantly Might need a significant Local authorities with
banking especially outside the urban area, at the cost of land for amount of resources for surplus income
significantly lower cost housing projects the short term
• These landholdings are earmarked for
development into low-cost housing or
resettlement areas
8. Idle government Involves the use of unutilized/underutilized The least costly option for • Local authorities who
lots properties of the national government or the off-site development own idle landholdings
local authority for housing projects • Local authorities with
good track record and
working relations with
national agencies
9. Livelihood A new concept which involves the provision for A higher level of social Still untested Local authorities who own
housing communal farming and fishing, including housing that integrates idle lands, particularly in
support services, on top of the traditional livelihood into the basic rural areas
homelots for beneficiaries off-site development
project
10. Eminent • The last option to push on-site development Can provide final solution Usually a lengthy process • Local authorities with
domain • Involves the expropriation of privately-owned to long-standing housing since it has to go through eminent domain powers
landholdings by the local authority, invoking issues court proceedings. There • On-site development
the power of eminent domain is also the risk of losing projects where
the case, leaving negotiations have
government and the reached a dead end
community empty-handed
Source: Urban Poor Affairs Office, Naga City

36
4 ANALYSIS

This chapter looks at the economic, social and political dimension of the

Kaantabay sa Kauswagan program, guided by the two other research questions: What

conditions impelled the need to introduce the program in Naga City? In what ways does it

operationalize the “secure tenure” campaign of UN-HABITAT?

4.1 MARKET FAILURE: THE CASE FOR GOVERNMENT INTERVENTION

Two recently published research works that touched on the Kaantabay program

offer similar accounts to the one described in Chapter 3: problems associated with

urbanization in the late 1980s have cropped up, affecting the urban poor. The program

was fashioned when a new administration that took over proved to be more responsive to

their concerns.

Tumbaga and Sabado (2003) devoted an entire chapter to the program as part of its

case study on Naga. The case study is meant to exemplify a Philippine local authority that

is pursuing a program of “growth with equity” through its own initiatives and resources,

and mostly without support from the national government. Together with case studies on

two other local governments, their work sought to understand local governance amidst

demands of local growth and national policies related to local industrialization.

Kawanaka (2002), on the other hand, examined local power dynamics to illustrate

the role of the state and institutions in local politics. By looking at these institutions, not

through conventional sociocultural perspectives but within the framework of the state and

urbanization, he explained the political machine as an elite-centered institution for

maximizing the elite’s control—the predominant elite in this case being the elected

political leader. In a chapter describing the political machine, the program was

37
categorized as one of its components aimed at gaining the support and loyalty of the poor

using state resources under the mayor’s disposal.

These studies, together with other documents on the program, will be examined in

the succeeding sections. This section explores the economics of the Kaantabay program,

which is lacking thus far.

Figure 5 shows the local housing supply and demand in Naga City. With the

formal housing market accounting for 27% of the total housing stock of roughly 26,000,

the supply curve OS1 intersects the demand curve AD at the breakeven point X, which

roughly corresponds to a unit price of P300,000 (£3,000). The amount is well within the

price range for low-cost or economic housing package shown in Table 1. It will be noted

that while private developers theoretically lose money in producing units that cost below

Fig. 5. The economics of the Kaantabay program. State intervention in the

housing market addresses distributional issues and promotes allocative
efficiency.

38
the equilibrium point X, they nevertheless continue building them. These units

(corresponding to the supply curve XS1) fall within the socialized housing category whose

cost of provision is partially subsidized by government.

But it is the failure of the formal housing market to address the need of a greater

majority of the local society (represented by the area bounded by S1S2DC) that provides

the justification for government intervention in housing provision through Kaantabay.

Locally, this market failure stems from the information asymmetries, intergenerational

externality and distributional issues described by Whitehead. The situation is also

exacerbated by the private capital markets’ unwillingness to extend loans to the urban

poor, who are characterized as high-risk borrowers, furthering their exclusion.

Moreover, the graph demonstrates allocative efficiency as another value-added of

the program. By expanding housing services towards universal coverage, the shift in

supply curve from OS1 to OS2 in effect causes a downward shift of the breakeven point

from X to Y. As a result, all housing units produced by private developers will break even

at the very least, enabling government to realign subsidies wholly towards the informal

sector.

4.2 BEYOND WELFARE ECONOMICS: EMPOWERMENT OF THE URBAN POOR

The advantage of using multi-dimensional analysis in investigating complex

programs such as Kaantabay can be seen when one considers its social aspect to enrich the

economic analysis presented above.

Take for instance Kawanaka’s reduction of the program merely as an element of

the city mayor’s political machine, using state-centered institutions as a key independent

variable in the analysis. The approach might be an improvement over the traditional

sociocultural framework used in analyzing power relations in the Philippine context, and

39
probably empirically valid in its own right. But when one uses other socially-oriented

frameworks to inform the analysis, its limitations become obvious.

Under Sen’s capabilities theory and Moser’s vulnerability framework, for example,

the Kaantabay program would easily qualify as a key urban poverty intervention as it

addresses the personal and tenure insecurity dimension of deprivation and the productive

assets dimension of vulnerability.

Beyond the economic potential in freeing “dead capital” as De Soto proposed by

facilitating the acquisition of land titles by the urban poor, their empowerment is another

benefit brought about by the program. Thus, even without the need to raise incomes as

required under conventional anti-poverty interventions, Kaantabay is able to address

social exclusion through community organizing of the urban poor (in the process creating

their own interest group) and compelling them to actively participate in problem

resolution.3

In presenting four case studies of gains made by urban poor groups in the

Philippines, Racelis (2003) placed the Naga City Urban Poor Federation at the top end of a

continuum of their relations with the state, characterised as ranging from “begging” and

“requesting” to “demanding” and “negotiating.” Of the Empowerment Ordinance and the

Naga City People’s Council, she wrote

This non-partisan body was composed of NGOs, POs, and private sector
groups, who could propose legislation and carry out additional duties. Soon
Council-designated NGOs were sitting on boards, councils, committees,
task forces and other special bodies of the city government. The Ordinance
also provided for representation in the city legislature of elected non-
agricultural labour, women and urban poor. (Racelis 2003, 15)

To be sure, the program suffers from its own weaknesses, including issues on long-

term financial sustainability, replicability and political dynamics as Tumbaga and Sabado

3
ADB’s draft poverty assessment for the Philippines made the same point. It said that “looking at poverty
in terms of capability deprivation can lead to programs that address the very poor…without having to
directly increase their incomes, such as improving social service provision.”

40
have noted. But viewed another way, they saw Kaantabay as “an exemplary way by which

a local government could manage the social costs inflicted on the urban poor by urban

growth and development.” (Tumbaga and Sabado 2003, 350)

4.3 MANAGING URBAN DEVELOPMENT: BRIDGING THE IDEAL AND THE REAL

The political dynamics associated with the program fits well the managerialist

perspective of Knox’s urban political economy as well as Healy’s communicative

planning theory that underscores mediation between competing interests among

stakeholders.

Knox postulates that looking at activities and ideologies of professional decision-

makers, in this case the city’s elected leaders led by the city mayor, contributes to a better

understanding of sociospatial processes, including the development of policy. Applied to

Healy’s framework, decision making takes place amidst competing demands and therefore

requires a balancing act on the part of the political leadership.

A classic case, which Tumbaga and Sabado documented well, is the conflict

between Robredo and a group of 221 urban poor households who refused relocation and

were thus displaced when the city government implemented the “leveraged land sharing

plus” project. (See the appendix.) In this instant case, the entry of the LCC mall

development forced the city to prioritize economic growth at the expense of equity insofar

as the affected households are concerned. “That the city government was perceived by

urban poor groups to have taken the side of the landowners/developers was an ironic twist

as the city government prided itself for being ‘pro-poor,’ or at least being impartial in its

role as mediator.” (Tumbaga and Sabado 2003, 304-305)

The city government, however, believed their actions and decisions were justified

in the search for the most beneficial arrangement for the city. Succeeding events,

41
including favourable decisions by local courts and national agencies, as well as general

public support for the city government’s position, appeared to have confirmed this.

These controversies notwithstanding, the Robredo administration has on the

balance demonstrated a commitment to the public good, guided by the principle of

bridging the ideal and the real. For instance, the land acquisition approaches it prided

itself as having implemented under the Kaantabay program are conceptually nothing new.

In fact, Presidential Decree No. 1517 issued by President Marcos in the 1970s authorized

the state to use most of the very same techniques listed in Table 5. The only difference is

that while the national government has failed to pursue them, Naga actually did under the

program.

Of course, at one level, Kawanaka is correct in saying that holding elective

position in the Philippine context means having to survive regularly held elections,

compelling power holders to set up and maintain systems for distributing benefits, i.e. the

political machine, in order to win. But in the same vein, Racelis pointed out that “genuine

participatory governance is good politics and good politics gets good politicians re-

elected.” James Jacob, a former city councilor-turned-congressman and close Robredo

ally, is more straightforward: “The whole Kaantabay sa Kauswagan program was

motivated by politics. As a politician, you can ensure your survival by buying votes, or

you can improve your performance as a public servant. By helping the urban poor, we are

also helping ourselves as politicians” (Tumbaga and Sabado 2003, 339).4 In other words,

paraphrasing Adam Smith, it is all a matter of enlightened self-interest.

The 2003 World Development Report echoes this, pointing out that

For cities and towns to realize the promises of a better life…they need
stronger institutions to provide wide access to assets and to balance interests
that ensure the provision of public goods. Such institutions are central to an
4
Over the five local elections held in Naga since 1992, Robredo’s slate had swept all contested seats—from
mayor, vice mayor and the 10 city councilors—including the most recent one last May 10, 2004. In 1998,
then Councilor Jacob himself earned a seat in the national legislature, representing the Metro Naga district.

42
 urban governance that is inclusive of all residents, responsive to their needs,
and conducive to careful management of natural resources and wastes.
(World Bank 2003)

4.4 SUMMARY

The foregoing analysis of the economic, social and political dimensions enables a

richer, more textured characterization of the Kaantabay program. The economics of the

city government’s intervention in the local housing market—anchored on market failure

and attendant distributional issues that exclude a greater majority from accessing housing

services—is not only shown to be consistent with existing literature on the subject; it also

validated the necessary precondition for such intervention as voiced out by the affected

urban poor sector.

A multi-level social analysis that brought together complementary frameworks of

deprivation, vulnerability and social exclusion bolsters the contention that the program is

not merely a tool of the local political elite’s effort to stay in power. On the contrary, it

was demonstrated to have both empowered the urban poor, thereby addressing social

exclusion, and strengthened their security of tenure and access to productive assets as

envisioned under the UN-HABITAT’s global advocacy.

Finally, analysis of the political dynamics attending the program has affirmed the

implicit mediation function of state agents on top of their traditional leadership roles,

requiring a balancing act especially by those holding political power. A commitment

towards the public good, anchored on the Smithian concept of enlightened self-interest, is

also shown to be politically beneficial.

43
5 SYNTHESIS

The preceding four chapters have outlined the case for a formal evaluation of Naga

City’s Kaantabay sa Kauswagan program.

Chapter 1 put forward three arguments why a robust, systematic evaluation of a

local “secure-tenure” poverty program is warranted, i.e. it can benchmark implementation

of UN-HABITAT’s global secure tenure advocacy, and it can enrich and inform the

research agenda on poverty and good urban governance. Chapter 2 developed a tri-

dimensional theoretical framework that was used in analyzing the program from

economic, social and political perspectives. Chapter 3 profiled the Kaantabay program,

including the local context, conceptual framework as well as the physical, social and

financial aspects of its operation. Using data from Chapters 2 and 3, the preceding chapter

then provided a richer, more textured characterization of the program by analyzing its

economic, social and political dimensions.

This concluding chapter brings all the previous elements together in proposing

some guidelines for a formal policy evaluation of the Kaantabay program.

5.1 EVALUATION RESEARCH QUESTIONS AND METHODOLOGY

Building on and expanding the multi-dimensional analytical framework used in

this case study, the proposed evaluation research should make use of both quantitative and

qualitative research methods, using both primary and secondary data.

In evaluating the program, the following research questions need to be answered:

a) Do benefits arising from the Kaantabay program outweigh its costs? Does it

represent value for money (VFM)?

44
 These are the two key research questions for a conventional evaluation that looks

at the efficiency and effectiveness dimensions of policy.

The number of urban poor households given tenurial rights under the program will

be used as main indicator of policy effectiveness. Program benefits can be measured at

two levels: (1) in terms of the total market value of assets built up by urban poor

beneficiaries as recorded by the City Assessor, i.e. the value of landholdings whose

property rights will be transferred to said beneficiaries, and (2) independent valuation by

banks in the open market. The two nationally-funded CMP programs during the early part

of program implementation can serve as the counterfactual, i.e. what would have happened

in a “policy-off” scenario, which will help establish the Kaantabay’s gross and net

additionality.

Program cost will include a more detailed economic accounting of all direct and

indirect city government funds in support of Kaantabay, grants from national and foreign

sources, and equity contribution by beneficiaries.

Cost-Benefit Analysis (CBA) and Cost-Effectiveness Analysis (CEA) will be used

as main analytical tools, supplemented by the Cost-Benefits Balance Sheet (CBBS) if

warranted.

b) Has the program made a difference in the social/economic/political lives of

urban poor beneficiaries? If so, in what ways and to what extent?

It will be noted that most information available thus far have come from leaders

and key players in the interaction between the housing market, the state, the urban poor

sector and other stakeholders. For a meaningful evaluation, it is important to reach out to

individual beneficiaries of the 41 Kaantabay projects. This requires the conduct of a

survey covering representative samples drawn from both on-site and off-site projects.

Respondents will be selected through stratified random sampling to ensure equitable

45
representation among geographical regions of the city (i.e. urban vs. suburban area), as

well as type of land acquisition project (on-site vs. off-site).

c) How do other stakeholders perceive the program?

A comprehensive evaluation also needs to factor in perspectives of landowners, the

business sector, professionals as well as ordinary non-urban poor residents of the city. A

survey similar to the one described above will generate this information.

d) What improvements can be made in managing the program, especially in

regard to strategic and operational issues?

This will be the main question that will be asked during a focus group discussion

(FGD) that will integrate the policy evaluation research.

Information derived from the preceding activities will be presented to provide the

context for a special meeting of the City Housing and Urban Development Board, which

sets policy for Kaantabay. The use participative facilitation techniques—such as the

Technology of Participation (ToP) —will assist documentation and analysis of the FGD,

whose results will form part of the research findings, conclusions and recommendations.

These guidelines are by no means exhaustive, nor do they represent the final option

available to a policy evaluator. But they can inform and jumpstart the formal evaluation

of the Kaantabay program as proposed at the outset.

46
APPENDIX

Naga’s Creative Approaches to Land Acquisition

• Self-Help Community Mortgage. In 1993, funding constraints forced the
National Home
Mortgage Finance
Corporation (NHMFC)
to back out of its
commitment to the
Naga city government
to finance acquisition of
a 5.5-hectare property
owned by the
Archdiocese of Caceres.
This came at a
especially hard time as
for the first time since
the 1930s, the Church
has finally agreed to sell
the property to
occupants. But with
NHMFC out of the THE subdivision plan of the Mitra property. Through a city-backed
picture, the deal appears community mortgage, a tenurial dispute that dates back to the 1930’s
to be off again. was solved with finality.

To save the situation, the city government purchased the property directly from the
Church, backed by loan from the Government Service Insurance System (GSIS)
supported by bridge financing from a local commercial bank. Banking on its
reputation and
goodwill, the
city got the
property at
roughly 25
percent of the
market value.
This enabled
the city to
resell it to the
428 families
at virtually the
same price as
acquisition
cost.

Amortization THE land sharing scheme for the Naga Centrum landholding. Previously,
of the SPUKOI members were occupying the rightmost portion of the property. A
property by bridge (heavy black lines) built by the city now connects it to the other side
of Naga River.

47
 occupants is now almost complete, save for a handful of families left.

• Land Sharing. A 3.85-hectare lot in Barangay Sabang owned by the Naga

Centrum Corporation (NCC) was for years the subject of litigation. Meanwhile, an
urban poor community that became known as Sabang Puro Urban Kabisig
Organization, Inc. (SPUKOI) came to live and occupied the property.

After a local court finally ruled in favor of the NCC, the SPUKOI community was
threatened with forcible ejection. With the city’s intervention, a “win-win” sharing
arrangement was hammered out. NCC allowed a 1.3-hectare portion for sale and
occupancy by the community, provided they transfer from the front end to the back
and the city build a bridge
into the property. The
bridge, now known as the
Tabuco-Sabang Bridge, is
already in place. This
increased property values
in the vicinity and
allowed the owners
optimum use of the
property.

• Leveraged Land
Sharing Plus. A
variant of straight land
sharing, this involves the
purchase of an adjoining
property by a landowner
where urban poor
occupants of his main
property can be relocated.

Leveraging its corporate

powers, the city
government convinced the
THE LCC Central Mall is the centerpiece of the city’s South
LCC Group of Riverfront area redevelopment. Urban renewal is being made
Companies—a mall possible through the transfer of informal settlers ringing the
operator in the Bicol former Superland Complex to the Metroville Housing Project
region—to purchase, lying just beside the 10-hectare LCC property.
redevelop and put up a
shopping mall at the dilapidated Superland Commercial Complex in Barangay Sabang.
But the presence of around 200 urban poor families ringing the Superland Complex is
impeding the project.

To solve the situation, the city convinced LCC to buy an adjoining lot and with
assistance from the city, develop a low-cost housing project for the affected families.
This ensured minimal displacement for most of the informal settlers.

Today, around 120 of the 200 have already transferred to what is now the Metroville
Housing Project; the rest to another city property in Barangay San Felipe. The LCC

48
 Central Mall has risen out of
the ashes of the dilapidated
Superland and is now doing
good business, in the process
sparking urban renewal in
the South Riverfront area of
Naga.

• Land swapping. This

involves the exchange of an
urban poor-occupied
property with another of
roughly equal value,
preferably without
occupants. The occupants
then amortize the cost of
their individual homelots to
the new owner.
THE urban poor occupied property in Barangay San Felipe
An example is a 9,800-sq. (dark violet) was swapped with the squatter-free property in
meter urban poor-occupied Barangay Balatas (dark green), facilitating homelot
interior lot owned by the acquisition by informal settlers.
Archdiocese of Caceres in
Barangay San Felipe which was swapped with a roadside 9,000-sq. meter property
acquired by the City Government from a private landowner in Barangay Balatas.

• Proactive land banking. Essentially forward-thinking in action, the city early on

foresaw in the late 1980’s that property values will be rising rapidly in view of its
planned developments. At the time, it therefore acquired and earmarked more than 30
hectares for development as resettlement areas.

The strategy paid off handsomely, as property values—in areas where the city used
direct purchase—have zoomed up by as much as ten times.

49
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