Author’s note:  This is the fifth blog post on the property rights of the poor in the Philippines.

Urban poor houses on both sides of an estero (estuary)

Experts have highlighted vulnerability, rather than long-term and steady deprivation, as the key concept in understanding urban poverty.  The urban poor are managers of complex asset portfolios but which are exposed to shocks and stress, and the poorer the household, the lower its ability to cope with such crises.  Urban households cope by diversifying their income sources (including illegal ones).  However, the one asset they can least afford to lose, is access to housing in the city.  However small or squalid a shanty may be, it represents probably the largest investment its owners have ever made.  Its loss through eviction often leads to a downward spiral of homelessness, marginalization and further poverty.  Thus, insecure housing and land tenure is the main source of vulnerability for the urban poor (Amis 1995, Berner 2000).  Housing can be seen as a factor of poverty,  an indicator of poverty, and a cause of poverty.  Quality of life is affected by crowding, noise, dirt, and inadequate facilities; one’s health is affected by lack of sanitation and unsafe water supply while future prospects are affected by restricted access to education.

Urban poor family

lWhile research indicates that not all residents of informal urban settlements are poor, only poor people generally accept the above conditions.  The lack of supportive infrastructure and lack of security (because of the threat of demolition) are disincentives or barriers to entrepreneurship and investments and could help perpetuate urban poverty (Berner 2000).  Urban poverty is largely determined by land supply and allocation and there is actually no housing gap even among the urban poor except for the minority who live on the streets.  It is more a dearth of suitable and affordable land for housing and the crucial dividing line in the city separates those who have legitimate and secure access to urban land, and those who do not.

Land prices especially in the urban areas of the country have been rapidly and continuously rising in the course of globalization and commercialization and have led to greater competition over urban land.  In the 1990s, land prices in the central business district of Manila were rising by as much as 50% annually while the prices of raw land rose at 25% per year.  The widening disparity between soaring land prices and stagnating urban real incomes is at the root of the urban poor problem.  Security of tenure through land ownership has become increasingly difficult to obtain.  Most urban poor responded to the shortage of affordable land by ‘squatting’ or ‘informal’ occupation or settlement on available (meaning idle, un-fenced, or unguarded) public or private land (Porio and Crisol 2004). Inadequate income is not the only factor responsible for the proliferation of urban informal settlements.  The influx of rural migrants into the urban areas for various reasons is a key factor.  In Metro Manila for instance, while the poverty incidence is 17%, the informal population is estimated at 40 percent.  Compared to other countries with the same per capita income, the country has more people living in informal settlements (Yu and Karaos 2004).

President Manuel Quezon

Property and land tenure security in the Philippines are covered by the New Civil Code of 1950 and this system makes it very difficult for urban poor informal settlers to obtain tenure security.  Under this law, tenure security is largely defined in terms of land ownership proven by possession of a formally registered title.  Thus, informal settlers on public and private lands do not have any right at all to occupy the land and to enjoy whatever benefits are derived from such occupation.  To control the growth of informal settlers, different political administrations have responded with a range of policies from eviction and criminalizing squatters to the provision of land and housing.  As early as 1939, President Manuel Quezon bought large tracts of land in what will soon to be known as Quezon City for housing projects but these became middle class settlements.  From the late 1960s to the mid-1970s, the Marcos administration continued to acquire lands outside Manila to relocate informal dwellers.   Presidential Decree No. 772 was issued in 1975 (and was in existence until 1997), and declared squatting a crime and punishable by imprisonment or fine.  During this period, the main policy followed was mass eviction and relocation of squatters to sites some 30-40 kilometers outside the city and placing them in extremely overcrowded bunk- or row-houses, or even simply dumping them.  Not only did this prove to be inhumane but ineffective as well.  The people who had once been attracted by the chances and opportunities in the metropolis simply drifted back (Porio and Crisol 2004, Starke 1996, Berner 2000).

The martial law administration also adopted another tack partly in response to the failure of the relocation/eviction programs.  One approach was through a slum upgrading program.  But because of the absence of systematic implementing rules and regulations, only a few of informal settlements were actually upgraded (Porio and Crisol 2004).  The National Housing Authority (NHA) was created in 1975 with the express goal of serving the housing needs of the poorest 30% of the population.  Its performance during the Marcos years was quite dismal; between October 1975 and December 1985, a total of 4054 new housing units, or some 400 per year, were constructed in NHA projects throughout the country (Berner 2000).  The Ministry of Human Settlements was supposedly created to coordinate all of the government’s efforts but it was more a political vehicle for the ambitious First Lady Imelda Marcos who wanted to succeed her husband as the nation’s leader.

The post-martial government of President Corazon Aquino initially responded to the urban housing problem through a mortgage 

financing program.  The Community Mortgage Program (CMP) was formulated in 1987 when a number of NGO leaders served in government.  The CMP is basically a land consolidation and upgrading scheme, combined with a program which gives informal settlers access to formal credit.  As a tenure instrument, CMP allowed poor people to acquire land and build houses without putting up collateral on their own since the land to be acquired served as the collateral for the mortgage loan.  In a sense, the CMP was an instrument for legalizing unauthorized settlements (through on-site development) or for informal settlers to acquire tenure security in relocation sites.  CMP beneficiaries are required to be organized as the land titles are transferred to associations rather than individuals.  After residents and the respective landowner have agreed on a price, the land is paid through a loan from the National Home Mortgage Finance Corporation (NHMFC) which is to be repaid over a period of 25 years.  Loan amounts ranged from P30,000 to P100,000 for every household which can be used to buy the plot or build and improve housing structures.[1]  NGOs were functional in all stages of the process: they inform the informal settlers about the legal requirements (e.g. official registration of the association), assist them during negotiations with the landowners, and offer services like surveying and legal advice.  In all, the CMP has benefited about 137,000 households in over 1,000 urban and rural poor communities (Berner 2000, Porio and Crisol 2004).

The CMP was quite successful in Manila and other Philippine cities since it satisfied two diverse constituencies.  The landowners can sell their land and revive ‘dead’ capital even at reduced prices, without the costs and risks of evicting the informal settlers.  The informal settlers can buy security and prevent the incalculable risks of eviction.  However, limited government funds and available loan values have not able to cope with rising urban land prices.  With the increasing scarcity of affordable land, the program appears to be no longer viable in highly urbanized areas where it is most needed.  In addition, the program was plagued with the usual delays in processing of papers and decreasing collection rates from CMP beneficiaries (Cacnio 2001).

Similarly, the CMP has several unintended consequences including divisive conflict within urban poor communities.  Berner (2000) notes that the division is between those who could pay and those who could not afford to continue paying their loan amortizations.  Since the association holds common title to the property, it now becomes an instrument only of the paying beneficiaries.  Those who are able to pay must also pay for the land of the drop-outs since the private owner sold the entire settlement instead of mere parcels.  Thus, this has led to conflict between the association and the new ‘squatters’ and the paying beneficiaries want to evict the non-paying ones.  In cases where poor beneficiaries who cannot keep up with amortizations are forced to leave and sell their housing rights, the usual buyers come from the more prosperous classes.  As the settlement regularizes, the processes of gentrification and social stratification proceed apace, as regular settlers make substantial investments in home and land development.

In the early 1990s, the passage of the Local Government Code (1991) and the Urban Development and Housing Act (UDHA) of 1992 marked the adoption of a more decentralized approach towards housing and urban development, integrating housing needs and urban poor participation in land use planning.  Of immediate greater import to the urban poor are the UDHA’s salient provisions.   The UDHA provided compensation for housing demolished during evictions, provided informal settlers the first option to purchase the land they occupy, and required the availability of a relocation site with access to services before any eviction can take place.  On balance therefore, UDHA recognized the property rights of the urban poor over their housing even if they did not own the land.  Thus, informal settlers may not have rights to occupy the land but they are legally assured of housing in another location in case of eviction.  In 1997, PD 772 was abrogated and squatting was de-criminalized.

Together with the growth of urban poor organizations and their political allies and the above-mentioned legal developments, a certain robustness of the property ‘rights’ of the urban poor have accrued through the years.  While informal settlers do not have legal rights to the land they occupy, they enjoy de facto owner-like rights.  They build their housing structures as well as develop their plots.  If and when they decide to move they are able to ‘sell’ these structures.  In cases of eviction, they are either compensated for these structures or assured of a slot in a relocation site.  In most cases, they can also access services such as water and electricity.  Legal intricacies as well as political realities leave actual landowners relatively powerless for they cannot regain possession of the land without long and costly legal battles, and eventually financial compensation for the informal settler. Owners face the interference of local politicians who have long nurtured the vote-rich ‘banks’ in urban poor settlements.  All these factors give relative security and protection to the informal settler.

Of course, the security afforded by private title is rather absolute but is costly in terms of money and time.  To this end, the government has utilized a few intermediate instruments of tenure such as presidential land proclamations, occupancy leases, and local ordinances.  Land proclamations cover informal settlers on public lands and have improved tenure security of a large number of urban poor in a short time with minimum resources.  Land proclamations assure informal settlers that they will not be evicted and social services will be improved while the formalization of plot ownership is being processed.  President Arroyo had made use of this instrument to a greater degree than her predecessors and during her first two years, these proclamations have reached 645,910 families living in 33 informal settlements in Metro Manila and elsewhere covering more than 22,000 hectares (Murphy 2002).  As a tenure instrument, land proclamation seems to be the most impressive. However, its application is limited since most squatters are occupying private land.  Furthermore, it is still oriented towards ownership and land titling and the search continues for easier intermediate solutions like long-term leases and guarantees against eviction. It would be a mistake, however, to think that presidential land proclamations were entirely the initiative of the President. Murphy (2002) points out that except for a case where the proclamation was made to woo the political constituency of a political rival[2], most proclamations were the result of the work of urban poor federations and NGOs over many years.

The need for alternative secure tenure arrangements is indicated by the thriving informal urban land markets in the country.  According to an Asian Development Bank study, about 60-70% of the total households in various secondary cities in the country are believed to have been acquired through the informal market (ADB 2001).  The existence of the informal market is largely a function of the difficulties and high costs of obtaining legal title to land.  Informal land transactions are based not on the sale of the title but on the sale of land use rights.  It is often understood by the parties involved that the legal title may belong to a third party unconnected with the informal seller and, therefore, the buyer may at some point risk eviction by the legal owner.  However, the complexities and costs of eviction afford informal buyers a modicum of tenure security.  Some transactions involve land caretakers and informal lease arrangements.  In other cases, squatting syndicates use fake or spurious titles to sell housing or usufruct rights.

Urban poor houses almost surround high-rise buildings in Cebu City

A case study of Cebu City (Thirkell 1996) reveals the phenomenon of ‘downward raiding’ where rising urban land prices induced middle-income and even high-income families to buy out the land use ‘rights’ of poorer households living in informal settlements.  A comparison of costs for formal and informal housing proves that the decision to buy into a slum area is not reckless but makes sound economic sense.  The total cost of an informal housing unit is one-tenth of the comparative formal scheme.  Thus accessible prices for informal plots and low eviction rates (due to high costs of eviction) in Cebu City make informal housing appealing to a broader range of urban families.  The study also shows that poverty and the lack of resources render urban poor families more vulnerable to crisis-selling which in turn exploited by more wealthy groups to force low selling prices.  Urban poor sellers often sell ‘rights’ because of emergencies and more often cannot regain the ‘land’ for the price received. They are then forced to seek alternative housing options or lands in poorer locations.  While the study does not indicate that it has happened, the possibility of repeat emergency sales cannot be discounted.  Unlike informal transactions involving agrarian reform beneficiaries in the countryside, urban informal markets are instances where even the absence of authentic rights-based documents does not impede negotiability.


ADB. 2001. “An overview of the Philippine housing sector.” Draft Final Report, 2 March 2001, Asian Development Bank, Manila.

Amis, P. 1995. “Making sense of urban poverty.” Environment and Urbanization 7 (2): 145-157.

Berner, E. 2000. “Poverty Alleviation and the Eviction of the Poorest: Towards Urban Land Reform in the Philippines.” International Journal of Urban and Regional Research 24 (3): 554-566.

Cacnio, F. C. 2001. “Microfinance Approach to Housing: The Community Mortgage Program.” Discussion Paper No. 2001-28, Philippine Institute for Development Studies.

Murphy, D. 2002. “Proclamation Study—Preliminary Report.” Urban Poor Associates, Quezon City.

Murphy, D. and T. Anana. 1994. “Evictions and fear of evictions in the Philippines.” Environment and Urbanization 6(1): 40-49.

Porio, E. and C. Crisol. 2004. “Property rights, security of tenure and the urban poor in Metro Manila.” Habitat International 28(2): 203-219.

Starke, K. 1996. “Leaving the slums.” PULSO Monograph 16, Institute of Church and Social Issues, Quezon City.

Thirkell, A. J. 1996. “Players in urban informal land markets; who wins? who loses? A case study of CebuCity.”  Environment and Urbanization 8(2): 71-90.

Yu, S. and A. M. Karaos. 2004. “Establishing the role of communities in governance: the experience of the Homeless People’s Federation Philippines.” Environment and Urbanization 16(1): 107-119.

[1] Key government informants report that CMP had two phases with P80,000 as the maximum loan amount in the first phase; and P180,000 in its second phase (FGD with select representatives from government, CSOs, and academe, 1 June 2007, Ateneo de Manila University, Loyola, Quezon City).

[2] This was the case for the land proclamation made by President Arroyo covering the Baseco estate to win over the supporters of deposed President Estrada after a failed uprising against her government in May 2001.


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