I would like to thank the Asian Development Bank for the honor of this invitation, and I am delighted to join its officers and staff in welcoming all our foreign guests to manila and to this forum. The ADB remains one of the government’s staunchest allies in pursuing pro-people programs and today’s forum once again amply demonstrates that. I have learned to enjoy coming here, despite the sometimes intimidating topics on the table, and the awesome credentials of the discussants, and I’m beginning to feel as much at ease here as I am in my new official home.
Today we are going to discuss urbanization and financing future cities. Indeed, it is a formidable subject.
Urbanization is one of the fastest growing phenomena in the world today and one of the most serious challenges confronting governments. Cities on the other hand are seen as the principal producers of population, pollution, and, in such grossly disparate proportions, both poverty and progress.
At no other point in our history has mankind have to confront the simultaneous impact of growing population, diminishing finite and non-renewable resources, and ever-increasing destruction of the environment.
As a process, urbanization is irreversible. We cannot stop it, push it back, call it off or slow it down. We can only live with it, cope with it, and make it work for development, which need not be a contradiction in terms. We have to make our cities sustainable not only economically and ecologically, but socially and culturally as well.
As the famous British high-tech architect Richard Rogers pointed out in his Reith lecture on BBC some years ago, “an urban society in conflict, or suffering severe poverty, or with large sections of the community alienated from mainstream life is unlikely to be persuaded about the importance of preserving natural resources, or switching to public transport.”
But to make our cities sustainable we have to leave to future generations---still using Rogers’ words---“a stock of environmental or national capital that equals or exceeds our own inheritance.”
We have to make sure---and these are now my words---that they remain the sources, or at least channels, of life, vitality and self-renewal for future generations. As cities shape the lives of their citizens, we must make an earnest effort to so shape our cities that they become the bearers of our preferred vision of the future.
Urban challenges in the Philippines
The urban population of the Philippines has long outpaced the capacity of the shelter sector to provide the required housing. The continued presence of slum areas in urban centers attests to this. More than one third of our urban population live in communities characterized by insanitary conditions, congestion, and poor access to basic urban services.
Resettlement and relocation continue.
But success has been limited in providing sufficient livelihood and basic services to the relocated families. Without access to jobs and essential social services, it becomes easier for them to go back to where they came from, even if their informal dwellings are no longer there.
The problem is further complicated by the government’s limited resources. We allot to housing less than one percent of the total government expenditures, or less than one-tenth of one percent of GDP on the average, making Philippine public spending on housing one of the lowest in Asia.[1]
Too often, our drive toward development has focused on purely economic gain while relegating environmental and ecological considerations to the background. This has placed us in a high stakes game of catch-up and we have to work double time to cope with and mitigate the effects of climate change before we cross a perilous threshold.
Many human settlements in cities and municipalities are plagued by poor site selection, inadequate or inappropriate infrastructure, and inflexible and undiversified economies. Majority of our cities and municipalities have to contend with these problems and are hampered by a lack of planning, technology and funding.
While various national agencies are mandated to address different aspects of housing and urban development, and work tirelessly to accomplish their goals, a higher level of coordination and integration is needed. A stronger linkage between national and local governments is no less than vital to the attainment of all our shelter objectives.
We also need a clearer and more focused direction in the implementation of urban development programs and projects. Vertical and horizontal linkages among the various agencies involved in housing and urban development must be strengthened to make planning and implementation all-encompassing and more efficient.
Stakeholders need to work together to make cities self-sustaining, resilient, and ultimately prosperous. Infrastructure- and capability-building is indispensable, but policy and program interventions should focus on how local communities can help in institutionalizing programs for climate change adaptation and disaster preparedness.
These are some broad strokes of what we are trying to carry out.
Key aspects of urban policy
One of our more exciting projects is the development of a National Slum Upgrading Strategy or NSUS side by side with a national resettlement framework.
Last May, the Cities Alliance[2] approved our Housing And Urban Development Coordinating Council’s proposal to develop such a strategy. Both the national and local governments will now undertake the relevant policies and programs for slum upgrading, under the guidelines provided by that strategy, and supported by cities alliance.
The strategy is also envisioned to provide support for a national government resettlement policy and updating the national urban development and housing framework. This should enable local government units to integrate certain policy and program options into their Comprehensive Land Use, Comprehensive Development, and Local Shelter Plans, and other such documents.
The NSUS project shall run for 18 months. We expect its implementation to attract investments in real estate development and housing, among others, which in turn will spur employment and contribute to the area’s development.
We also hope to accelerate mass housing, using alternative housing technologies, schemes and approaches to ensure decent and affordable homes. Wherever and whenever feasible, labor-intensive methods shall be given preference in order to generate employment in beneficiary communities.
It is indispensable that environmental management and disaster risk mitigation standards be now developed and implemented in the construction of housing units.
Especially so, as we explore vertical expansion in the construction of these units, particularly in highly urbanized areas, taking into account the basic geographical location, soil quality and other environmental issues.
These include the use of indigenous and recyclable materials as environmentally-friendly alternatives in order to reduce construction costs. The resulting applications and demand shall fuel new industries and increase employment generation, as a secondary benefit.
Infrastructure support to resettlement sites and emerging regional sustainable communities shall be integrated. This includes the provision of potable water supply, safe and sufficient electrical power, access roads to the nearest commercial centers, information and communications access, among others.
Henceforth, all plans and costings of government infrastructure projects shall include the relocation and resettlement requirements of all affected families. A financing framework for relocation and resettlement shall include workable public-private partnership or what we call PPP schemes for socialized housing development.
National government support will be extended to enable local governments to develop a system of land inventory that will allow them to identify areas for urban growth and for human settlements.
We hope soon enough to be able to put in place a department that will go beyond coordinating policies and programs on housing and urban development. This is necessary in order to adequately and competently address our current and future shelter challenges.
President Aquino and the leaders of congress have already agreed to prioritize the proposed creation of a Department of Housing and Urban Development or DHUD, to rationalize and promote the efficient management and development of land resources and enhance the coordination and integration of government plans, programs and projects in housing and urban development.
Current initiatives/programs relative to climate change adaptation
The use of green technology is one of our most vigorous initiatives in addressing climate change. Through a green technology program, climate risk reduction is integrated into the policies of the local government units, and families are empowered to participate in efforts to create climate-resilient cities.
The nation’s inherent biodiversity has led to the discovery of indigenous materials that are cost-effective and appropriate for our local conditions. We seek not just to promote the use of such materials for construction, but also to spur further research and development in this area. To this end, we are working on the accreditation of Indigenous Technologies for Housing (AITECH) and shall tap private developers’ marketing services for the technologies we shall promote.
We intend to execute prototype projects to showcase the applications and cost repercussions of these technologies to both our LGUs and our private partners. Among these is the construction of a climate-change resilient human settlement in a coastal city. This is consistent with our commitment to the Millenium Development Goal-F 1656 joint program.
This initiative involves the localization of housing policies, guidelines on site planning, and house construction, with specific attention paid to local climate change scenarios, urban development and housing trends, and the capacity of the poor to cope with disasters and extreme events.
Throughout this process, the LGU of the target community must engage the poor in defining risks and appropriate actions, taking particular account of the special needs of women, children and the elderly who are usually the least able to cope during calamities and emergencies.
Complementing the goals of this project is our housing caravan. As we go around the country to help local governments become more aware of the means to plan for and finance settlement projects in their localities, we stress the need to integrate climate change mitigation and adaptation actions as well as disaster risk management measures into their comprehensive land use and development plans. Technical assistance for such planning is made available to them through HUDCC.
We have invited UN-Habitat to be part of this initiative and we look forward to a most fruitful collaboration far beyond this initiative.
Aiding our efforts to finance the LGUs’ climate change mitigation and adaptation and disaster risk reduction and management activities is the disaster risk reduction and management act, which we expect to provide a good part of the needed funds.
In addition, the climate change commission has ruled that five percent of an LGU’s calamity funds can be used for risk reduction activities, and not just for calamity response.
These measures may seem modest relative to the scale of the task at hand, but they are auspicious starts as we work with financial planners and congress to refine the funding of these goals.
Our partnership with LGUs and with real estate companies gives us the opportunity to work together in the liquidation of some acquired assets of our shelter agencies. Proceeds from these sales shall provide a great part of the resources needed for our projects.
While great issues remain in financing shelter/housing developments, looking at these as part of the “local sustainable development program” can open up opportunities to generate local resources.
As LGUs consolidate their plans in order to source funding, it is crucial that their needs and objectives be clearly defined. If these are coherently presented, it then becomes possible for private sector investors to see where potential profit streams lie and what returns can be realized.
The sheer volume of the housing need has the potential to carry great velocity for investments made. This ought to be thoroughly examined and exploited as scale usually lends the sustainability that investors seek, and breeds horizontals that are equally attractive.
As this forum gets underway, I look forward to the lively exchange of insights, experiences and strategies from the distinguished professionals present. Given all the potential that both the housing sector and the climate change challenges hold,
The emergence of innovative finance mechanisms and new industries creates an exciting frontier for all of us to explore. I hope we use every opportunity to do so.
Thank you and good morning.
[1] This is based on Habito’s 2009 paper for the Asian Development Bank (ADB).
[2] The Cities Alliance is a global coalition of cities and their development partners committed to scaling up approaches to poverty reduction. It provides grants in support of cities development strategies, citywide and nationwide slum upgrading activities, sustainable financing strategies to attract funding for infrastructure, and knowledge sharing activities. The Government of the Philippines, through HUDCC, the League of Cities of the Philippines and the Department of the Interior and Local Government, has been a member of the Cities Alliance since 2007.