P H I L I P P I N E S U R B A N I Z AT I O N R E V I E W P O L I C Y N OT E S M AY 2017 Promoting Inclusive Growth by Creating Opportunities for the Urban Poor* 1. Introduction and Context: Urbanization and Poverty in the Philippines Urbanization is one of the most significant drivers of Figure 1. Analytical Framework for development. It can provide a pathway out of poverty and Inclusive Urbanization2 act as an engine of growth. High urban densities can reduce transaction costs, make public spending on infrastructure and services more economically viable, and act as an economic hub that attracts investments and talents. But if Economic Inclusion not well managed, urbanization can give rise to inequality Jobs, skills dev, education, access to finance etc. and exclusion which affects a city’s competitiveness and opportunities for growth. Inclusive urbanization, where everyone can reap the Social Inclusion Spatial Inclusion benefits, is critical to city competitiveness and growth. Crime & violence Affordable and & housing, prevention, urban poor basic services, slum Policies to recognize the rights of the poor to the city and community organization, upgrading, land mgt. etc. allows them to participate in, contribute to, and enjoy the participatory planning, etc. benefits of urbanization are important for inclusion.1 Inclusive urbanization requires an integrated multi-dimensional approach that addresses three key dimensions of inclusion infrastructure and basic services. Social inclusion relates to – economic, spatial, and social. Economic inclusion relates to fundamental principles of equal rights and participation addressing poverty and providing economic opportunities of the marginalized in the development process. The three such as jobs, sources of livelihood, and access to finance. dimensions of inclusion are interrelated and mutually Spatial inclusion refers to improved access to land, housing, reinforcing. Policies must therefore address all three aspects. * This policy note is part of a broader study, “Philippines Urbanization Review: Fostering Competitive, Sustainable and Inclusive Cities, 2017 The World Bank. 1 M. Watanabe (2016). Closing the Gap in Affordable Housing in the Philippines: Experience of the National Summit on Housing and Urban Development” Presidential Commission for the Urban Poor (PCUP) Newsletter (forthcoming) 2 World Bank (2015). WORLDBANK.ORG/PHILIPPINES/URBANIZATION 1 WB_Policy Notes_Inclusive Growth.indd 1 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Today, half of the Philippine’s population lives in cities. The settlers in the country are income poor based on 2012 Family proportion will continue to increase to reach 84% by 2050.3 Income and Expenditure Survey (FIES).8 The rest are living Philippine cities generate 70% of the GDP, of which 36% is above the poverty line but residing in poor living conditions. generated in Metro Manila alone.4 Urbanization has often But this data needs to be interpreted with caution. Informal helped reduce poverty by providing new job opportunities settlers are usually minimum wage earners and contractual and raising incomes of the poor. Indeed, poverty incidence workers whose incomes vary based on seasonality or job for urban areas (12.5%) was less than half of the national availability with no protection. Those engaged in small poverty incidence (25.2%) in 2012.5 businesses suffer from unsteady levels of income. Many of them have limited savings that are exhausted in the event of Yet as cities fail to keep pace with the rapid urbanization in any external shocks such as natural disasters. Informal settlers the Philippines, multi-dimensional poverty in urban areas is are therefore highly vulnerable to experiencing episodes of deepening and widening. With in-migration of those aspiring income poverty especially with external shocks.9 for better lives from rural areas to urban centers came surges in demand for jobs, housing, infrastructure and basic services Informal settlers also suffer from multiple forms of exclusion. in major cities. Yet, the Government has been unable to They often lack access to basic infrastructure and services, address the increased demand given the accelerated pace. secure land tenure, have limited access to capital, productive The result has been proliferation of informal settlers in urban and stable employment and livelihood opportunities, and areas without adequate access to decent living conditions. are vulnerable to natural hazards especially floods. The The number of informal settlers in the Philippines has Government estimates that over 104,000 informal settler increased gradually, from 4.1% of total urban population in families (ISFs), or about 520,000 people equivalent to 40% 2003 to 5.4% in 2012.6 In 2012, 5.4% of the urban population of the ISFs in Metro Manila, live in danger areas, exposing or about 2.2 million people lived in informal settlements themselves to recurrent flooding. Furthermore, ISFs suffer in the Philippines. In Metro Manila alone, an estimated 1.3 from social discrimination. They are seldom integrated into million people, or close to 11% of the population in the the broader communities, perceived as “problems”,10 are region, lived in informal settlements.7 rarely involved in official decision-making and face higher incidence of crime and violence. The figure below shows that Not all informal settlers are income poor, but many are ISFs’ perceived problems include threat of eviction, crime and vulnerable to external shocks that can easily push them violence, natural hazards, and access to services. below the poverty line. An estimated 25% of the informal 3 UN Habitat (2015), Achieving Sustainable Urban Development Philippines Project Brief. Manila. 4 Oxford Economics. 5 FIES (2012). 6 FIES 2003, 2006, 2009, 2012. 7 FIES (2012). Informal settlers are defined in this chapter as households that responded that they are living in “own house, rent-free lot without consent” or “rent-free house and lot without consent”. 8 WB staff calculations based on FIES (2012). 9 Ballesteros (2010). 10 “Change the paradigm!” Opinion piece by Mary Racelis, Philippine Daily Inquirer (2015). 2 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 2 10/05/2017 10:45 AM 2. Key Challenges Figure 2. Issues Faced by Informal Settlers in Metro Manila Difficulty in accessing transportation Difficulty in accessing clean water Difficulty in accessing medical services Difficulty in accessing good schools Prostitution Difficulty in accessing health... Poor road conditions Men hassline women on the street Natural hazards Vandalism, petty theft, drug... Threat of eviction 0 400 800 1200 1600 2000 Source: World Bank (2016). Metro Manila Urban Slum Survey 2.1 Economic Exclusion Aspects of economic inclusion relate to addressing income decreased slightly.11 Urban poverty incidence has remained poverty and providing economic opportunities through relatively stagnant over the past decade regardless of which employment. poverty lines are used.12 However, once population growth is taken into consideration, there is a slight increase (1 a. Urban Poverty percentage point) in the share of the urban poor.13 Among the urban poor, 9% reside in Metro Manila or NCR, Luzon (excluding NCR) and the Visayas account for close to a quarter Between 2003 and 2012, urban poverty in the Philippines each, and Mindanao alone accounts for more than 43%. remained largely unchanged, while national poverty 11 World Bank (2016). 12 The following poverty lines have been used for analysis in the Philippines, US$1.90/day international poverty lines at 2011 PPP, $3.10/day in 2011 PPP , and the national poverty lines which are set broadly following the cost of basic needs approach. The total poverty line (computed for each domain or rural/urban area per province) is the minimum cost to meet 1) basic food needs that satisfy the nutritional requirements set by the Food and Nutrition Research Institute (FNRI) and 2) basic non-food needs such as clothing, housing, transportation, health and education expenses. 13 FIES (2003, 2006, 2009, 2012). PHILIPPINES URBANIZATION REVIEW POLICY NOTES 3 WB_Policy Notes_Inclusive Growth.indd 3 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Figure 3. Urban Poverty Trend While urban poverty incidence may be relatively low, disparities in living conditions are most evident in urban 25.0 areas compared with rural areas. With no or low paying 20.1 20.0 17.0 17.4 jobs, migrants are unable to afford decent housing and 15.0 17.8 12.8 12.7 12.5 adequate access to services, resulting in prevalence of Percent informal settlements. Shelter inequalities depict significant 10.0 5.9 polarization in the distribution of wealth and resources in 4.3 5.0 cities. In most cities, but most pronounced in Metro Manila, 4.5 4.2 0.0 informal settlement communities with no security of 2003 2006 2009 2012 tenure and inadequate access to basic services coexist with exclusive, fully serviced, and gated communities. Official $1.90/day PPP $3.10/day PPP Linear ($1.90/day PPP) Linear ($3.10/day PPP) Majority of the people are forced to remain in informal Source: FIES 2003, 2006, 2009, and 2012, WB staff calculations settlements for decades given the lack of affordable housing options. A survey on ISFs in three cities of Metro Manila shows that 54% have been living in the informal settlements between 11 and 40 years, whereas 24% responded that they moved within the last five years.14 This implies that while Figure 4. Share of Urban Poor (%) there is new influx of migrants, majority remain in informal 2012 9.0 23.7 23.6 43.8 settlements for decades. The main reason for staying is because be they income poor or not, they have no other 2009 8.3 28.6 24.0 39.1 affordable housing options near their jobs and thus remain stuck in informal settlements for a long time.15 2006 10.6 23.9 25.3 40.3 0 200 40.0 60.0 80.0 100.0 b. Jobs NCR Rest of Luzon Visayas Mindanao Unemployment rate remains relatively low but Source: FIES 2003, 2006, 2009, and 2012, WB staff calculations underemployment rate is high in urban areas. Unemployment and underemployment rates in the Philippines were at 6.8% and 18.4% in 2014, respectively, while in urban areas, they were at 8.8% and 14.7%.16 Unemployment and 14 World Bank (2016). Metro Manila Slum Survey. (Mimeo) 15 Ballesteros (2010) 16 Labor Force Survey (2014) 4 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 4 10/05/2017 10:45 AM Figure 5. Number of Years Living in Figure 6. Unemployment and Underemployment Informal Settlements (Urban vs. Rural) 26.7% 27.7% 2005 2014 30.0 24.3% 25.0 30.0 20.0 17.1% 25.0 24.2 15.0 20.0 22.4 10.0 15.0 17 3.6% 14.7 5.0 0.6% 10.0 10.5 0.0 8.8 1-5 6-10 11-20 21-40 41-60 61-86 5.0 5 4.8 years years years years years years 0.0 Urban Rural Urban Rural Source: World Bank (2016). Metro Manila Urban Slum Survey Unemployed Underemployed Source: LFS 2005 and 2014 underemployment rates in urban areas have improved over underemployment rates among urban poor are also more the years, as have those in rural areas, but the improvement noticeable in Regions IV-B, V, VI, and CARAGA. This signifies has been modest. For both rural and urban areas, males, that many urban poor work but they are predominantly workers with higher educational attainment, and the youth engaged in part-time or casual labor, which is informal by have the highest incidences of unemployment, while the nature, and suffer from unstable income. This is consistent poor have the highest incidence of underemployment.17 with the overall finding in the World Bank Philippine Development Report 2013 that due to long history of Urban poor suffer from high underemployment, though policy distortions, agricultural productivity has remained significant regional variation exists. Based on 2012 Labor depressed, manufacturing has failed to grow sustainably, Force Survey (LFS) and FIES data, both urban poor and and a low-productivity, low-skill service sector such as urban non-poor have an average unemployment of 8.7%. petty retail trade and public transportation has emerged The gap between the two groups is the highest in NCR at as the dominant sector of the economy.19 While actual 17.8% for urban poor compared to 9.4% for urban non-poor. reasons for the regional variation in unemployment and Underemployment is high for both urban poor and urban underemployments are unclear, one possible explanation non-poor groups, but particularly so for the urban poor could be that underemployment rates tend to be higher whose underemployment rate is twice as much (29%) as in regions that are relatively more urbanized because there that of urban non-poor (14.7%). In NCR, the difference is even tend to be more job opportunities, despite their informality. starker, where underemployment of the urban poor (37%) NCR does not fit this explanation, however, and merits further is almost three times that of urban non-poor (13%).18 High analysis in the future. 17 World Bank (2013). Philippine Development Report (2013). 18 LFS (2012) and FIES (2012). 19 World Bank (2013) PHILIPPINES URBANIZATION REVIEW POLICY NOTES 5 WB_Policy Notes_Inclusive Growth.indd 5 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Figure 7. Unemployment Rates (Poor vs. non-Poor) Among Urban Population Per Region 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 NCR CAR I - ILOCOS REGION II - CAGAYAN VALLEY III - CENTRAL LUZON IVA - CALABARZON IVB - MIMAROPA V - BICOL REGION VI - WESTERN VISAYAS VII - CENTRAL VISAYAS VIII - EASTERN VISAYAS IX - ZAMBOANGA PENINSULA X - NORTHERN MINDANAO XI - DAVAO REGION XII - SOCCSKSARGEN ARMM CARAGA TOTAL Unemployed Poor Unemployed Non-poor Source: FIES and LFS 2012 Figure 8. Underemployment Rates (Poor vs. non-Poor) Among Urban Population Per Region 60.0 50.0 40.0 30.0 20.0 10.0 0.0 NCR CAR I - ILOCOS REGION II - CAGAYAN VALLEY III - CENTRAL LUZON IVA - CALABARZON IVB - MIMAROPA V - BICOL REGION VI - WESTERN VISAYAS VII - CENTRAL VISAYAS VIII - EASTERN VISAYAS IX - ZAMBOANGA PENINSULA X - NORTHERN MINDANAO XI - DAVAO REGION XII - SOCCSKSARGEN ARMM CARAGA TOTAL Unemployed Poor Unemployed Non-poor Source: FIES and LFS 2012 6 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 6 10/05/2017 10:45 AM Many urban poor are trapped in low-wage and low- highly educated workers, or manufacturing sector which only productivity jobs in the informal service sector. More than 75% employs about 8% of the total labor force.21 Informal wage of the Filipino workers nationwide are informally employed, as workers lack employment contracts and social insurance, defined as self-employed workers (not including employers), and are not protected against unfair dismissal. Wages tend unpaid family workers, and wage workers with no written to be significantly lower than formal jobs and often below contract, social insurance, or protection from dismissal. Two minimum wage. For example, a majority of workers (56%) thirds of urban jobs are informal, and among wage workers, are low-paid in the informal sector, with only a minority (7%) 6 out of 10 are hired informally.20 The informal service sector in the formal sector. These informally employed people face has become the dominant source of employment for the high degrees of vulnerabilities to income fluctuation and majority of the urban poor who cannot find work in formal external shocks. service sector such as in the BPO industry, which caters to Figure 9. Shares of Informal Employment to Total Employment (Rural vs. Urban) 100 80 60 40 20 0 NCR CAR I - ILOCOS REGION II - CAGAYAN VALLEY III - CENTRAL LUZON IVA - CALABARZON IVB - MIMAROPA V - BICOL REGION VI - WESTERN VISAYAS VII - CENTRAL VISAYAS VIII - EASTERN VISAYAS IX - ZAMBOANGA PENINSULA X - NORTHERN MINDANAO XI - DAVAO REGION XII - SOCCSKSARGEN ARMM CARAGA TOTAL Urban Rural Philippines Source: FIES and LFS 2012 20 World Bank (2016). 21 World Bank (2016). PHILIPPINES URBANIZATION REVIEW POLICY NOTES 7 WB_Policy Notes_Inclusive Growth.indd 7 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R The urban poor are affected by informality and low wages opportunities.23 Those without secondary education face a due to low levels of education compared with urban non- significant employment challenge as they are not eligible to poor. Low levels of education are clearly correlated with join vocational skills training offered by Technical Education urban poverty with 35% of the urban poor belonging to and Skills Development Agency (TESDA) accredited households with heads with less than primary education institutions, and many employers require a minimum of high compared to 20% of urban near-poor and 7% of urban school completion. Share of informal employment among non-poor.22 Workers with less than secondary education urban poor is significantly higher than urban non-poor’s face substantially worse labor market prospects than those informal employment in NCR and CALABRAZON, while in who complete high school. Their earnings are significantly other Regions, it is the other way round. Average daily wage lower, and the risk of poverty is much higher. Based on a for the urban poor is less than half of that of the urban non- survey of 3,000 ISFs in Metro Manila, 67.7% of the surveyed poor across all regions. ISFs have less than secondary education, limiting their job Figure 10. Shares of Informal Employment Among Urban Poor vs. Urban Non-Poor 80% 70% 60% 50% 40% 30% 20% 10% 0% I - ILOCOS REGION II - CAGAYAN VALLEY III - CENTRAL LUZON IVA - CALABARZON IVB - MIMAROPA V - BICOL REGION VI - WESTERN VISAYAS VII - CENTRAL VISAYAS VIII - EASTERN VISAYAS IX - ZAMBOANGA PENINSULA X - NORTHERN MINDANAO XI - DAVAO REGION XII - SOCCSKSARGEN NCR CAR ARMM CARAGA TOTAL Urban non-poor informal employment Urban poor informal employment Source: FIES and LFS 2012 22 World Bank (2016). 23 World Bank (2016). 8 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 8 10/05/2017 10:45 AM Figure 11. Average Daily Wage of Urban Poor vs. Urban Non Poor 600 500 400 300 PHP 200 100 0 NCR CAR I - ILOCOS REGION II - CAGAYAN VALLEY III - CENTRAL LUZON IVA - CALABARZON IVB - MIMAROPA V - BICOL REGION VI - WESTERN VISAYAS VII - CENTRAL VISAYAS VIII - EASTERN VISAYAS IX - ZAMBOANGA PENINSULA X - NORTHERN MINDANAO XI - DAVAO REGION XII - SOCCSKSARGEN ARMM CARAGA TOTAL Poor Non-poor Source: FIES and LFS 2012 The low levels of income result in urban poor having higher Figure 12. Total Household Income and Expenditure total expenditure than total income, suggesting that they of the Urban Poor (in Php, 2012) borrow to finance their day-to-day expenses.24 Factoring in all possible sources of income such as incomes from interest and 350,000 300,000 dividends, as well as remittances from abroad, urban poor’s 250,000 total expenditure is higher than their total income as shown 200,000 in figure 6.12 below25, suggesting that they are permanently 150,000 in the red and are borrowing to finance their expenditures. 100,000 This makes them extremely vulnerable to external shocks. 50,000 The urban poor also spend less – a combined 3.3% of the 0 Urban Poor Urban Non-poor total expenditure on human capital investments such as health and education compared to the non-poor (7.9%), Total expenditure Total income partly due to their low levels of income and partly as they Source: FIES and LFS 2012 have more access to free health and education. 24 World Bank staff calculations based on FIES 2012. 25 No quantitative data on urban poor’s levels of saving is available in FIES. However, qualitative studies have shown that urban poor have minimal savings. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 9 WB_Policy Notes_Inclusive Growth.indd 9 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R challenge is that most of the formal, well-paid jobs are taken by well-educated, high-skilled workers, and urban poor face a significant hurdle in landing any formal jobs without high school degrees. Much of the livelihood support provided for the ISFs has focused on micro-enterprise development that has been designed without sufficient market analysis, leading to suboptimal results. Various livelihood interventions have been provided in the past to ISFs by different actors including the Government, NGOs, and development partners. Yet not many of them have been successful. This is partly because many livelihood interventions have focused on microfinance supported micro-enterprise development. Studies show that without a sound market analysis, business management skills, and appropriate personal characteristics, it is difficult to sustain a profitable micro-enterprise.27 Furthermore, many interventions have been “labor supply-driven”, focusing primarily on what the ISFs want to do, or what skills they already possess, rather than focusing on what the market needs. This approach has resulted in mismatches between Research shows that most urban poor prefer formal wage the supply of skills and the demands of the economy.28 employment should there be opportunities. In a qualitative For example, TESDA has been providing free or subsidized study conducted by the World Bank on livelihoods for the ISFs, livelihood skills training to many ISFs on bead accessory majority of the respondents noted that they prefered stable making, rug making, or cosmetology without any market regular wage labor in the formal sector rather than engaging assessment. This has resulted in may trainees unable to sell in risky micro-enterprise development, and that many poor their products or services upon completion of the training.29 are engaged in self-entrepreneurship “out of necessity”.26 The 26 World Bank (2014) and Hwang, H. (2014). “Emerging Lessons from Urban Livelihoods Interventions”. (Mimeo) 27 World Bank. (2014). “Supporting Self-Employment and Small-Scale Entrepreneurship”. Washington, DC: World Bank. 28 World Bank. (2013). “World Development Report: Jobs”. Washington, DC: World Bank. 29 Focus group discussions with ISFs residing in Pandi, Bulacan, and Trece Martires, Cavite. 10 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 10 10/05/2017 10:45 AM 2.2 Spatial Exclusion The spatial dimensions of inclusion in the context of this the country. Many ISFs are confronted by physical, economic, study refer to access to land, housing, infrastructure and basic social, legal and environmental risks on a day-to-day basis. services in cities, as well as exposure to natural hazards. These Aside from the current need, HUDCC anticipates that in 2017 remain major challenges, affecting the living conditions of the total housing needs will reach 6.3 million households.30 the urban poor. The private sector also estimates that 12.5 million housing units will be needed by 2030 given the pace of urbanization a. Land and Housing in the country and the current demand-supply trends and analysis.31 As with other developing countries, the pervasiveness of informal settlements in the country can Informal settlements are the most visible manifestation of be traced to low income, unrealistic and inadequate urban multi-dimensional poverty in the Philippines. The largest planning, lack of serviced land and affordable social housing, concentration of informal settlements is in Metro Manila, and a dysfunctional legal system.32 which houses almost 40% of the total informal settlements in Figure 13. Concentration of ISFs by Region Source: National Housing Authority 30 Housing and Urban Development Coordinating Council (2015). “Projected Housing Need 2011-2016.” Housing Summit, Quezon City, Philippines. 31 CREBA (2015). “The Philippine Housing Industry Roadmap: 2012-2030”. Philippines. 32 National Informal Settlements Upgrading Strategy Comprehensive Assessment Report, 2014. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 11 WB_Policy Notes_Inclusive Growth.indd 11 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Spatial analysis on the distribution of ISFs in Metro Manila33 housing is still a major problem as manifested by the large shows that the informal settlements are not distributed number of ISFs, increased demand for rental housing, the evenly in Metro Manila. Quezon City has the biggest share concomitant rise in rental rates. High land prices partly due of the total area of the informal settlements (34%) but is also to lack of strategic land use planning and functioning land the largest municipality and is followed by Taguig City which market, as well as the low income capacity of families in the includes 10% of the area of the ISF. San Juan City, Makati City cities hinder many households to participate in government and Pateros have less than 1% of their area covered by ISFs.34 and private housing projects. Thus, about half of NCR households do not own the land they occupy.35 The number Informal settlements arise due to lack of affordable of ISFs has been rising as many opt to build substandard accommodation available on the formal market and access dwellings in private and public lands so as to be close to their to productive jobs for the new arrivals. In spite of the large employment or livelihood source. ISFs list threat of eviction tract of land currently allocated for residential use, lack of as their biggest concern. 42+34+21037v Figure 14. Tenure Arrangement of ISFs Do not have any ownership or rights to the lot or dwelling unit 3.6% 7.3% Own the dwelling unit Own the lot 10.6% 42.4% 2.1% Own the lot and dwelling unit Rights to the dwelling unit Rights to the lot 34.0% Source: World Bank (2016). Metro Manila Urban SLum Survey 33 The spatial analysis was conducted by GIM under the technical partnership between the World Bank and the European Space Agency. GIM used advanced semi-automated Object-Based Image Analysis to process very high resolution satellite images (i.e. Pléiades data, spatial resolution of 50 cm) on the basis of certain characteristics and identify and delineate the informal settlements. The maps are currently the most recent and detailed view on a selected number of informal settlements, as these were taken from satellite imagery in 2014. 34 GIM (2015). “Slums Analysis in Metro Manila Operational Document”. Brussels. 35 World Bank (2016). 12 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 12 10/05/2017 10:45 AM Over the years, the Government has developed a number resettle ISFs from danger areas to medium-rise buildings of social housing programs for the urban poor, but they in-city or near-city. Initial reaction from the ISFs has been are limited and have not been very successful. Despite the positive, but outcomes remain to be seen as repayment rates magnitude of the ISFs, the Government has only allocated are quite high and questions remain as to how affordable a staggering 0.1% of the total GDP for the housing sector HDH housing are. between 2000 and 2014. This makes Philippine public spending on housing the lowest compared to its peers in Many local government units (LGUs) have failed to respond Asia such as Singapore, Thailand, and Malaysia.36 Moreover, to the challenges of ISFs and instead have looked to the the outcomes of social housing programs have been mixed central government to lead or worse, to relinquish their at best. The Government has predominantly opted for off- responsibilities for social housing. Many LGUs are reluctant city resettlement through National Housing Authority (NHA) to properly allocate adequate resources to the housing due to lack of available land and high land prices in cities. sector, except perhaps for their own employee housing. City However, off-city resettlement has often been implemented planning and housing policy remain uncoordinated, both against the wishes of the ISFs and has resulted in perverse at the national and local levels. There have been a number socio-economic impacts such as loss of livelihood, lack of of housing projects developed through engagement from adequate access to basic services, and disruption of social different civil society organizations (CSOs) such as the Gawad networks. A five-year longitudinal study that compared the Kalinga program, but they fail to achieve scale. bottom 30th percentile of ISFs who were resettled off-city and those that remained in-city found that after five years, Key constraints to affordable housing boil down to four the income gap between the two groups rose to more than inter-related issues: (i) land availability; (ii) affordable housing 50%. The study also found that off-city resettlement resulted finance; (iii) governance; and (iv) lack of inclusive urban in increased costs of transportation to work, schools, and development that optimizes land use. For urban centers in health facilities.37 Social Housing Finance Corporation (SHFC) the country, availability of land is a constraint. This is further has been providing affordable financing for predominantly complicated by lack of accurate land information and on-site, in-city shelter upgrading through its community costly and complex processes to make land available for mortgage program (CMP). However, the number of CMP social housing. The housing finance framework needs to be projects are limited. Moreover, many CMP sites become revisited to expand the reach down-market to allow lower- blighted, as communities only manage to take out loans for middle income class to access formal finance and give the land acquisition and lack the financial capacity to borrow for low-income class access to government subsidized financing. site development or housing, let alone set aside funds for For governance, there is a need to provide incentives and estate management. CMP has thus been termed by some as technical support to LGUs to promote their proactive role “going from slums to slums”. SHFC has recently introduced in social housing. It is also crucial to ensure that land use the High Density Housing (HDH) program that aims to planning is inclusive, disaster resilient, and sustainable. 36 C. Habito (2016). “Public Housing Expenditures in Selected Asian Countries, 2000-2014”. Manila. (Mimeo) The study compared public housing expenditures as a percentage of GPD between 2000-2014 for 9 Asian countries, namely Singapore, Nepal, Mongolia, Indonesia, Sri Lanka, Thailand, Malaysia, Bangladesh, and Philippines. 37 John J. Carroll Institute of Church and Social Issues (JJCICSI). (2008) “A Study of Resettled Families’ Perceptions of Vulnerability and Resilience to Disasters” (Draft Report). Manila. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 13 WB_Policy Notes_Inclusive Growth.indd 13 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Figure 15. Main Sources of Drinking Water for ISFs in Metro Manila Public/street faucet only 0.5% Coverep deep or shallow well only 0.8% Water vendors & fetched from main... 0.8% Handpump/machine-assisted pump 0.9% Those connected to a neighbor only 3.2% Piped connection & water vendors 4.8% Fetched water from neighbor only 10.7% Piped connection only 32.5% Water vednors only 45.9% Source: World Bank, 2016. Metro Manila Slum Survey b. Access to Basic Services and Social Safety Net quality control.40 In the Philippines, ISFs pay 9-13 times more for the delivery of water than households living in adjacent Access to clean water, among other basic services, is a serious fully serviced neighborhoods.41 problem for the ISFs. Almost half of ISFs get water through vendors, 11% fetch water from neighbors, and 3% share the ISFs’ lack of access to proper sanitation aggravates water connection with their neighbors.38 The major constraint that pollution causing health problems. While access to basic prohibits ISFs from accessing potable water is the connection sanitation is high, 93% of the urban poor sampled report fee. New connection fees are equivalent to US$97 and US$176 having access to water-sealed septic tanks42, many of them in Manila West and Manila East, respectively.39 Additionally, are improperly designed and hardly maintained, allowing there are administrative requirements such as proof of land human waste to pollute the water. In Metro Manila, only title, which prevent many households from connecting about 15% of the sewage is treated, and all other pollutants individually. In such cases, households share utilities but they are drained into rivers.43 The water pollution is often a cause are charged a higher tariff rate. Yet the cost of water from of gastro-intestinal problems, skin ailments, cholera, typhoid small scale service providers can be extremely high, with no and other infectious diseases.44 38 World Bank (2016). Urban Slum survey. 39 ADB (2014) 40 “Baker, Judy, ed. 2009, “Opportunities and Challenges for Small Scale Private Service Providers in Electricity and Water Supply, Evidence from Bangladesh, Cambodia, Kenya and the Philippines, World Bank, Washington, D.C. 41 Ballesteros, M. (2010). “Linking Poverty and the Environment: Evidence from Slums in Philippine Cities”. Philippine Institute for Development Studies; Manila. 42 World Bank (2016). Metro Manila Slum Survey. 43 E. Gozun (2010). “Water and Sanitation Policy Notes”. Philippine Urban Consortium. 44 Ballesteros (2010) 14 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 14 10/05/2017 10:45 AM Figure 16. Access to Sanitation Facilities by ISFs in Metro Manila Pit latrine (open or close pit 0.4% No toilet/open defecation 2.3% Water sealed, other/no depository 4.1% Water-sealed (flush or pour/flush), sewer/septic tank 93.1% Source: World Bank, 2016. Metro Manila Slum Survey Majority of ISFs have access to electricity, but high tariffs in health issues.48 When solid waste collection is difficult, pose a significant financial burden. The Philippines has a such as in many cramped informal settlements, nearby water very high electricity rate – the fifth most expensive in the bodies like creeks and rivers become convenient dumping world, averaging at $0.24 per kilowatt-hour in 2012.45 The grounds.49 Some of the uncollected garbage on the streets high electricity rate forces many ISFs to resort to shared also finds its way to creeks and rivers through underground connection or “jumping”, illegal connection to neighbors or and open drainage systems. All this hampers water discharge public electricity. 46% of the ISFs have their own connection, during the rainy season which in turn contributes to flooding, 37% only have shared connection that leads to higher perversely affecting the ISFs living along waterways. premium, and 14% say they are illegally connected from their neighbors or public electricity.46 Some people spend Transportation costs weigh heavily on the urban poor, as much as US$100/month to pay for their electricity from being the second highest expenditure item for a household. their average monthly household income of about US$507 Without any intervention, traffic demand will likely increase (Php.22,835) in NCR in 2012.47 by 13% in 2030, and transport costs then are estimated to 2.5 times higher.50 As it is, transportation costs accounts for 15% Improper solid waste management exacerbates health issues of the total household expenditure for ISFs. This amount is and flooding. Water pollution is prevalent especially in Metro equal to about a kilo of rice or three cans of sardines, enough Manila. In Metro Manila, only 10% of the 7,000 tons of solid for a day’s meal.51 In addition to the financial costs, there waste generated daily basis is recycled or composted while is the time cost, as well as physical and psychological cost the rest are either hauled to the city’s dumpsites (where associated with traffic congestion especially in Metro Manila many urban poor live and work as scavengers), dumped into where commutes can be lengthy. Over 80% of the ISFs in nearby water bodies such as creeks and rivers, or burned on Metro Manila spend 30-60 minutes one way to commute to the streets. Leachate from solid waste contaminate the soil their work.52 as well as both groundwater and surface waters, resulting 45 International Energy Consultants. (2012) “Regional Comparison of Retail Electricity Tariffs”. Meralco. Manila. 46 World Bank (2016). 47 FIES 2012. 48 Ballesteros (2010) 49 World Bank (2016). “Philippines Metro Manila Flood Management Project” Project Appraisal Document. 50 JICA (2014). 51 Ateneo School of Government. (2014). “Inclusive Mobility Network Action Plan”. Manila. 52 World Bank (2016). Metro Manila Slum survey. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 15 WB_Policy Notes_Inclusive Growth.indd 15 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Figure 17. Time Spent for Commute to Work by ISFs in Metro Manila (in Minutes) 30.0 50.6% 25.0 20.0 30.0% 15.0 10.0 8.5% 6.9% 3.9% 5.0 0.0 0 - 30 31 - 60 61 - 90 91 - 120 121 - 300 Source: Metro Manila Slum Survey Access to education is also limited due to financial education is provided for free from kindergarten to 12th constraints. As mentioned before, a survey of 3,000 ISFs in grade. However, surveyed ISFs responded that expenses Metro Manila found that 22.4% had up to elementary school for textbooks, school supplies, uniform, lunches, and education or lower, 30.6% were high-school drop-outs, and transportation costs are often a burden they cannot afford.54 46.7% had completed secondary education or higher. Given Moreover, for the very poor families, the opportunity costs that ISFs especially in urban areas responded that they have for sending children in early teens and above can be high, physical access to schools53, the factor that limits their access resulting in an elevated high school drop-out rate. to education seems to be financial. In the Philippines, public Figure 18. Educational Attainment of ISFs in Metro Manila 2500 30.6% 30% 2000 21.5% 25% 20.0% 1500 20% 11.7% 9.7% 1000 10% 5.0% 500 0.6% 0.4% 0.2% 0.2% 5% 0.0% 0 0 No education Pre-school Some elementary... Elementary... Some high school High school... Some college College graduate Post graduate Don’t know No data Manila No. Quezon City No. Muntinlupa No. Total No. Total % Source: Metro Manila Slum Survey 53 World Bank (2016). 54 World Bank (2016). 16 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 16 10/05/2017 10:45 AM Many urban poor benefit from conditional cash transfer and Mexico.57 Nevertheless, Pantawid Pamilya has proven though the amount is relatively small. Introduced in 2007, effective. Impact evaluation found that the program reduced Pantawid Pamilyang Pilipino Program (Pantawid Pamilya), the poverty rate among the beneficiaries by 6.5 percentage which is managed by the Department of Social Welfare points and the national income inequality as measured by and Development (DSWD), provides cash in exchange Gini coefficient by 0.5 points. The program has also influenced for compliance with age-specific health and education behavioral change among beneficiaries.58 CCT beneficiary conditions, such as receipt of pre- and post-natal care, households were also offered skills training and cash-for-work immunization, and 85% attendance rate at daycare, primary, assistance ($6.60/day or 75% of the prevailing daily wage or secondary schools. Since its inception, it has reached 4.2 rate) or micro capital assistance for sustainable livelihoods million households, or approximately 21% of the country’s ($220/family) under DSWD’s Sustainable Livelihood Program total population. It has a budget of US$1.5 billion, equivalent as a complementary measure. to 0.5% of the GDP.55 Beneficiaries are poor households with children aged 0-18 and/or with pregnant women that A modified conditional cash transfer (MCCT) program have permanent address, identified through Listahanan, the that targets the urban poor among others has also been national household targeting system. In 2013, among poor piloted, though results have been mixed. To address poor households with children 0-14, the coverage rate was 58%. households that were not included in the Listahanan, such as Of the program’s total beneficiaries, 65% are income poor and homeless families who were not enumerated due to lack of 35% are non-income poor, while ISFs only represented 4.4% permanent address, as well as indigenous people and other of the beneficiary households. Targeting accuracy is high vulnerable groups, the government piloted the Modified compared to CCT programs in other countries. Listahanan CCT (MCCT). As of April 2016, MCCT has benefitted 5,214 used the “pockets of poverty” methodology to identify the homeless families, of which 3,519 are from NCR, in addition poor in urban areas. This has proven a challenge, however, to indigenous people and other vulnerable families.59 MCCT with inclusion errors at 37%, 15 percentage points higher offered additional support for housing in the form of balik than 22% in rural areas.56 On average, Pantawid Pamilya probinsya ($1,540) for those who want to return to their beneficiary household received a monthly grant of Php.703.5 province of origin, and rental subsidies worth $88 a month (US$16.4) in 2013, which corresponds to 11.6% of beneficiary for a maximum of 6 months. Only fewer than half of the households’ monthly income from the poorest quintile in beneficiaries availed themselves of the rental assistance, and the same year. This is lower than the benefit level of around of those, only 30% were able to continue renting a house 23% of potential households’ income which the program on their own accounts, and 20% returned to the streets as intended to achieve at the time of its design in 2006, which they were not able to sustain themselves. Only 32% accessed is on par with CCT programs in other countries such as Brazil cash-for-work activities and 16% received skills training, 55 P. Acosta and R. Velarde (2015). “An update of the Philippine Conditional Cash Transfer’s Implementation Performance”. World Bank Philippine Social Protection Policy Note No. 8. Manila, Philippines. 56 U. Gentilini (2015). “Entering the City: Emerging Evidence and Practices with Safety Nets in Urban Areas”. World Bank, Washington D.C. 57 P. Acosta and R. Velarde (2015). The relatively low transfer size is partly explained by the fact that the Government prioritized coverage of all poor households with children over updating benefits level to adjust for inflation rate to maintain a reasonable program budget. 58 For details, see A. Orbeta, et al. (2014). “Keeping children healthy and in school: Evaluation the Pantawid Pamilya using Regression Discontinuity Design. Second Wave Impact Evaluation Results”. 59 As of April 2016, MCCT had 237,859 household beneficiaries with the following breakdown: (i) 5,214 homeless households; (ii) 182,055 indigenous people households; and (iii) 50,590 other vulnerable households such as disaster affected families. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 17 WB_Policy Notes_Inclusive Growth.indd 17 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R facilitation of employment or capital assistance.60 While a infrastructure such as lack of drainage or proper maintenance more in-depth evaluation to understand the reasons for low of it, as well as clogged waterways due to lack of effective uptake is needed, the results imply that given the chronic solid waste management compound the problem. Almost nature of poverty the urban poor face, exposure to longer- half of the ISFs surveyed in Metro Manila report that they term interventions may be more important in helping are affected by constant flooding.62 The flooding can have address the structural challenges of urban poverty.61 significant impacts on livelihoods, cause costly damages to housing and assets, and increase health risks due to c. Exposure to Hazards prolonged exposure to water pollution. People cope with the reduced income by: (i) taking on additional or temporary jobs where available; (ii) reducing food consumption; and (iii) Many slums have been built on river floodplains or along taking out multiple loans. Despite these coping strategies, the shorelines, exposing ISFs to recurring floods. Due to income remain insufficient to cover basic consumption government’s poor enforcement of land use planning and needs in most cases.63 regulation, many slums have developed near water bodies. This has exposed ISFs to constant flooding. Deficient Figure 19. Issues Faced with Flooding by ISFs in Metro Mania Others 0.4% Not affected 0.7% Goods get spoiled 0.7% Water supply disruption 2.4% 3.6% Temporary evacuation Fewer customers for business 3.9% Household members get sick 4.7% Electricity disruption 6.2% Insufficient food supply 6.7% Unable to work at home 13.1% Damaged/ruined house parts 17.4% Children unable to attend school 19.0% Unable to travel to work 21.1% Source: Metro Manila Slum Survey 60 Gentilini (2015). 61 Gentinili (2015). 62 World Bank (2016). Metro Manila Slum survey. 63 Institute of Philippine Culture (2011). “The social Impacts of Tropical Storm Ondoy and Typhoon Pepeng.” Manila. 18 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 18 10/05/2017 10:45 AM Fire is one of the primary man-made disasters that affects 2.3 Social Exclusion the ISFs. While no statistics are available, fires that burn hundreds of houses in slums are quite common. Fires are usually caused by unattended candles and gasoline lamps, The dimensions of social inclusion relate to fundamental malfunctioning Liquefied Petroleum Gas (LPG) tanks, cooking principles of equal rights and participation of the stoves (charcoal stoves), fireworks, and faulty electrical wiring. marginalized in the development process. In the context In most cases, fire spreads throughout the community in of the urban areas in the Philippines, particular aspects of minutes and can last for several hours before suppressed. crime and violence and social cohesion are issues affecting Various factors contribute to the rapid spread of fire. First, social inclusion of the urban poor. slums are often highly congested with houses close to each other and pathways too narrow for fire fighters and trucks a. Crime and Violence to enter. Second, most houses are made of light materials like scrap wood, cardboards, tin roof, and tarpaulin that are Crime and violence can take a heavy toll on social and highly inflammable. Fires damage the houses and assets, and economic development. Violence can incur strong, negative displace families, further impoverishing the urban poor and impacts on economic development by drastically reducing pushing the vulnerable poor below the poverty line. growth and producing long-lasting detrimental social impacts64, creating a vicious cycle of violence and poverty. Economically, it discourages investment and diverts public resources from development toward law enforcement and support for victims. For example, in 2005 in Guatemala, the direct costs of violence, concentrated predominantly in the capital city, was estimated at US$2.4 billion or 7.3% of the national GDP. 65 It is estimated that if Jamaica and Haiti reduced their crime levels to those of Costa Rica, their annual GDP growth could increase by 5.4%.66 Socially, violence, or the mere fear of it, stigmatizes certain neighborhoods, erodes social cohesion, limits people’s mobility, and negates citizens’ trust in a state that cannot protect them.67 Globally, crime and violence are more pronounced in urban areas and are compounded by their rapid growth. A study estimated that 60% of urban dwellers in developing and 64 World Bank (2009) 65 UNDP (2006). 66 UNODC and World Bank (2007). 67 World Bank (2011). “Violence in the City: Understanding and Supporting Community Responses to Urban Violence”. Washington D.C. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 19 WB_Policy Notes_Inclusive Growth.indd 19 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Some groups are impacted more, or differently, by urban violence than others. In most cases, areas that struggle the most with crime and violence are often areas that are the poorest.72 There are also clear gender dimensions. Globally, male homicide rates are roughly double the female rates for all age groups.73 Men commit majority of violent crimes from domestic violence to homicide, although the rates of nonfatal victimization by violence are more equal by gender. Women are much more vulnerable to sexual and domestic violence.74 Crime and violence in the Philippines significantly increased transitional countries have been victims of crime over a five- in 2013 compared to previous years. Philippines is not safe, year period, with victimization rates reaching 70% in parts but not strikingly unsafe, ranking at 62nd in the 2012 world of Latin America and Africa.68 It has also been established global homicide rate ranking, which is widely considered that even in regions with relatively low levels of urban the most accurate indicator of overall levels of violence in violence, such as Western Europe, urban violence is higher a country. Compared to the world average homicide rate than rural-based violence.69 As centers of social, political, of 6.2 per 100,000 people, homicide rate in the Philippines and economic power, cities can be hot spots for violence was 8.8, though it is much higher than the Asian average and conflict. The stark inequalities in cities can contribute of 2.9.75 Government data on homicide shows that it more to frustration, and rapid growth can accumulate risk factors than doubled in 2013 compared to the previous year. Other and intensify the potential for violence. Unmanaged growth serious crimes, which the government terms as index crimes, transforms power relationships and creates new social and also tripled while less serious non-index crimes increased economic opportunities (or inequalities), which, combined by more than six-fold in 2013.76 Reasons for the significant with weak state security presence, can foster criminality and increase in crime and violence in 2013 are unclear. The violence. The impacts are especially pronounced in cities overall trend of crime rates follows a similar trajectory as the where institutions are fragile.70 While there is still much to homicide rate. Alarmingly, the crime solution efficiency rate be learned about the relationships among different patterns halved in the same period though the reasons are unclear. of city growth, economic growth, and expression of violence, the city’s growth rate appears to have a stronger relationship with homicide rates than does its size or density.71 68 Shaw, M., J. van Dijk and W. Rhombert (2003). “Determining trends in global crime and justice: An overview of results from the United Nations Survey of crime trends and operations of criminal justice systems”. Forum on Crime and Society. 69 World Bank (2011) 70 World Bank (2011). 71 World Bank (2011) 72 Winton (2004) 73 WHO 2008 74 WHO 2008 75 United Nations Office of Drugs and Crime (UNODC). Global Study on Homicide. 76 Index crimes, as defined by the Philippine National Police (PNP), include murder, homicide, physical injury, rape, and crimes against property such as robbery, theft, car- napping/carjacking and cattle rustling. Non-index crimes are violations of special laws such as illegal logging or local ordinances. 20 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 20 10/05/2017 10:45 AM Figure 20. Incidence of Homicide Figure 21. Crime Rates (per 100,000 people)77 7000 6409 1500 6000 5520 4947 5000 1000 4000 3726 3375 3022 3000 500 2000 1000 0 - 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 Source: Philippine Statistics Authority Philippines Index crimes Non-index crimes Source: Philippine Statistics Authority Drug related crimes are prevalent in the Philippines, Of the 19,432 drug personalities arrested in 2015, 87.6% were in particular in NCR. According to the Philippine Drug male.80 Of the minors involved, 93% are in the age bracket Enforcement Agency (PDEA), Philippines remains to be both a of 15 – 17.81 producing and consuming country of illegal drugs. Based on the data on drug-related arrests, shabu (methamphetamine Yet, people’s average perception of safety has improved hydrochloride) remains the most abused illegal drugs in the since 2013, possibly masking the regional discrepancy. country. In 2015, 95.5% of drug-related arrests were linked According to Numbeo’s crime index82, perceptions of both to shabu, followed by marijuana at 4.3%.78 As of December safety and crime in the Philippines has improved since 2013. 2015, out of the total 42,036 barangays in the country, 11,321 The discrepancy between the official data and perception or 26.9% were drug-affected”79 or have drug-related cases data could mean that the official data is inaccurate, or that irrespective of the volume. Among them, NCR remains to there is a representation bias in Numbeo users. Another be the region with the highest number of “drug-affected” plausible explanation could be that the national average barangays, where an estimated 92.3% of barangays were crime rate masks the regional disparity, notably the rural- affected in 2015, followed by the relatively highly urbanized urban disparity. regions of Region IV-A with 49.3% and Region VII (where Cebu city is located) with 48.8% of the barangays affected. 77 Index crimes, as defined by the Philippine National Police (PNP), involve crimes against persons such as murder, homicide, physical injury and rape, and crimes against property such as robbery, theft, carnapping/carjacking and cattle rustling. Non-index crimes, on the other hand, are violations of special laws such as illegal logging or local ordinances. 78 Philippine Drug Enforcement Agency (PDEA) (2015). “2015 Annual Report”. Manila. 79 According to PDEA, a barangay is said to be drug-affected when there is a drug user, pusher, manufacturer, marijuana cultivator or other drug personality “regardless of number in the area. There are three basic degrees as to how a barangay is affected by illegal drug activities --slightly affected, moderately affected, and seriously affected. Barangays are considered slightly affected if there are identified drug users in the community but no known drug pushers or traffickers are operating in the area while moderately affected if at least a suspected drug pusher or trafficker is operating in the barangay. A barangay is seriously affected if at least a drug laboratory, den, dive or resort is suspected to exist in the community. 80 PDEA (2015). 81 PDEA (2015). 82 Numbeo is the world’s largest crowd-sourced database of user-contributed data about cities and countries ranging from consumer prices, perceived crime rates, quality of health care, to traffic quality. Data from Numbeo has been used as a source in hundreds of major newspapers around the world, including Forbes, The Economist, The New York Times, and BBC. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 21 WB_Policy Notes_Inclusive Growth.indd 21 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R Figure 22. Perceptions on Crime and Safety urban poor. As shown in figure 6.16, crime and violence is in the Philippines cites as the second most serious threats following eviction for the ISFs. Poor children and youth who don’t go to school 80 are prone to falling prey to exploitative gangs that engage 60 in delinquent and risky behaviors. Substance abuse claims some 1.4 million youth (15 – 30 years) who have used or sold 40 illegal drugs. Of 700 Metro Manila street children surveyed, 20 40 % admit to using prohibited drugs.86 Surveys stress that the greater number of out-of-school youths or young men 0 2012 2013 2014 2015 2016 without jobs had a negative impact on the overall sense of security in the community. The linkages between youth Crime index Safety index idleness include: (i) increased drug use; (ii) increased gang Source: Numbeo violence; and (iii) in isolated instances of more violent crime Disaggregated data shows that crime rates in NCR, which is (“hold-ups”). People also highlighted that the living condition highly urbanized, was 52% higher than the national rate in in their areas (such as narrow, maze-like streets, lack of street 2010.83 Numbeo data shows that Quezon City, Zamboanga, lighting) make it more difficult for police to control crime and Bacolod, Manila, and Cebu in that order have the highest crime violence.87 rates in the country. Globally, Quezon City and Zamboanga City rank 43rd and 48th unsafe cities. These two cities with the b. Social Cohesion highest crime rates in the Philippines vary in population size at 2.8million and 807,000 respectively. But interestingly, both Urban poor communities’ social networks are built around cities experienced a high population growth between 1990 kinship, and accordingly, common issue-based community – 2010 at 2.6% and 3.1%, well above the national average of organizations work best to mobilize the broader community. 2.1%.84 This supports the hypothesis that the city’s growth Rural migrants move to cities through their social networks rate seems to have a stronger correlation with homicide rates such as family and friends, and typically end up in than the size or the density. That is because cities that grow homogenous communities that are from the same regions. quickly are more likely to experience a convergence of factors Yet, as slums grow, many kinship-based groups come that increase the risk for destabilizing levels of violence if they together creating a broader heterogeneous settlement. are not appropriately addressed.85 As such, primary social support networks and solidarity mechanisms for the urban poor exist mostly within smaller Crime and violence disproportionately affect the urban poor, sub-groups, connected by kinship ties or by the fact that in particular male youth. Despite the general perception of particular groups of households had moved into an area improved safety, such perception is not shared among the from the same areas at the same time. Community-based 83 Philippine Statistics Authority (PSA). 84 PSA 2010 Census on Population and Housing. 85 World Bank (2011). 86 GOP-UNICEF 1997 IPC (2011) 87 IPC (2011) 22 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 22 10/05/2017 10:45 AM organizations that rally members around specific issues ISFs’ relationship with and influence on LGUs, especially the such as home-owners’ associations (HoAs) are more likely to barangay government, critically depends on whether they be able to reach out to a broad spectrum of households in are organized and whether they have any kinship ties. Formal the bigger heterogeneous communities rather than generic institutions that are important for the slum dwellers include community groups.88 Where there are no active CSOs or purok (ward) leaders, barangay captains, and barangay government assistance, many urban poor communities councilors. How good the relationship with these institutions remain unorganized. is, and how much leverage the slum dwellers can have, varies greatly by how well the community is organized, whether Social cohesion is disrupted when there is a significant they have any conduits such as CSOs that can act as a bridge influx of new settlers. It is not uncommon for a split to between the community and the LGU, and whether there emerge between longer-time residents and new migrants, are any kinship ties. If they don’t have any strong ties with strengthening the notion of “us” versus “them”.89 Often the local governments, they are often excluded from official times, deterioration in law and order is attributed to “other” decision-making process. sub-groups. Overcrowded schools and health facilities, and competition over customers (for service providers such as tricycle drivers) can also be sources of tension between the old and new communities. 88 World Bank (2011). SIM. 89 World Bank (2011). PHILIPPINES URBANIZATION REVIEW POLICY NOTES 23 WB_Policy Notes_Inclusive Growth.indd 23 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R 3. Recommendations Inclusive urbanization is important to city competiveness. A Help the urban poor access formal jobs by providing large number of the population in informal settlements are market-driven skills training and placement services in close low-income workers that provide critical labor and contribute collaboration zwith the private sector. to the productivity and growth of cities. A key aspect of a city’s competitiveness is its ability to be inclusive, ensuring As noted above, majority of the urban poor prefer stable that all residents are able to share in and contribute to rising regular wage labor in the formal sector rather than engaging prosperity. Addressing urban poverty and inequality remains in risky micro-enterprise development, and many poor are an important challenge for the Philippines and will require a engaged in self-entrepreneurship “out of necessity”.90 It is holistic approach that integrates all dimensions of inclusive thus essential that government provides employement urbanization – economic, spatial, and social. support to the urban poor. Such support, however, needs to be provided in a “market demand-driven” manner unlike Economic Exclusion the conventional “labor supply-driven” approach which has resulted in mismatches between the supply of skills and One of the key interventions to help alleviate the multi- the demands of the economy.91 Effective interventions dimensional poverty that urban poor face is to address the must take into account: (i) matching of livelihoods/jobs with urban poor’s jobs challenge. That is, to address the urban people’s skills, interests, and mobility; (ii) presence of a steady poor’s high underemployment rate due to informality so market to buy people’s services or products; (iii) quality of as to allow higher and more stable income. The challenge the end product and/or skills; and (iv) placement services for is that due to low educational attainment and low levels employment, with a focus on providing waged employment of skills, urban poor face a significant hurdle in landing opportunities in formal sector to at least one household productive formal jobs. The report thus recommends a short- member to ensure stable household income.92 Such term approach to: (i) provide skills training and placement endeavor should be undertaken with strong collaboration support for the low-educated, low-skilled urban poor with the private sector to tailor the skills training to the tailored to the preference and profiles of ISFs but in line with employers’ need and ensure access to employment post- market demand; and (ii) expand social protection through training. A robust tracer study to track the trainees’ retention cash-for-work programs using a properly designed public and career projection is needed to shed more light on which works program to provide income support to the unskilled industry yields the largest returns on investment. poor. Longer-term approach includes undertaking structural measures to generate more formal sector employment opportunities for the urban poor. 90 World Bank (2014) and Hwang, H. (2014). “Emerging Lessons from Urban Livelihoods Interventions”. (Mimeo) 91 World Bank. (2013). “World Development Report: Jobs”. Washington, DC: World Bank. 92 Environs. (2015). “Final Report on the NHA Livelihood Program”. Manila. 24 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 24 10/05/2017 10:45 AM Expand cash-for-work programs to provide income generate more jobs; and (iii) make labor market regulations support to the unskilled urban poor to smooth their income more responsive to job creation, especially for small and variability. labor-intensive firms. A properly designed public works program can be an Provide financial support to facilitate secondary education effective means to provide income support to the unskilled completion urban poor, especially to compensate the unstable income. The government can use Listahanan to target the Completion of high school education is critical in securing right beneficiaries for such cash-for-work programs, and job opportunities. Support to alleviate the financial burden communities can identify public works that will benefit of uniforms, school supplies, education materials, and them. In addition to augmenting income, such a program transportation costs would greatly enhance the chances of can enhance beneficiaries’ employability by providing them more urban poor youths to complete higher education.95 with labor market experience and by providing innovative Pantawid Pamilya is already providing cash grants for technical and life skills training. These programs, however, education up to high school, but it may be worth considering need to ensure that: (i) wage is set below the market rate increasing the grant amount to further encourage to ensure self-targeting of the poor; (ii) set a clear timeframe completion of secondary education. and exit strategies for participants; (iii) types of infrastructure are those that benefit the local urban poor communities; and Spatial Exclusion (iv) work is labor-intensive.93 Urban poor suffer from inadequate access to land, affordable Expand formal sector employment while raising the incomes housing, basic services, and are vulnerable to hazards. of those informally employed. Given the magnitude of ISFs, it is vital that opportunities for affordable housing and secure tenure are sustainably In the longer-term, there is a need to create more formal jobs expanded, and key services and infrastructure are provided. which are accessible to the urban poor. This entails some To achieve this, a number of inter-related interventions are structural changes that are beyond the scope of this study. proposed. According to the World Bank’s Philippine Development Report 201394 which looked quite extensively on this issue, Close the gap in affordable housing and provide access to some of the recommendations to generate more formal basic services for the ISFs. jobs include the following: (i) reinvigorate the manufacturing sector to create more formal jobs to low-skilled, low-educated Housing is a basic human right as recognized in the urban poor; (ii) simplify regulations in business registration Universal Declaration of Human Rights.96 The state, being and licensing, tax regime, and access to finance to encourage the main institution entrusted with the responsibility of rapid growth of businesses, especially the micro-, small and promoting the common good and rights of its people, has medium enterprises (MSMEs) in the formal sector that can 93 World Bank (2013) 94 World Bank (2013) 95 United Nations (1948). Universal Declaration of Human Rights. New York. 96 World Bank (2016). “Closing the Gap in Affordable Housing in the Philippines: Policy Paper for the National Summit on Housing and Urban Development”. Washington D.C. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 25 WB_Policy Notes_Inclusive Growth.indd 25 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R LGUs and communities can, with adequate training, undertake citywide participatory mapping and shelter planning, systematically collecting land information and socio-economic data of all the slums in a city, and developing an integrated land information system with complete land records and overlays of relevant data (such as hazard maps) from relevant agencies such as Department of Environment and Natural Resources (cadastral information) and Land Registration Authority/ Registry of Deeds (ownership information) to be managed by LGUs but available to public.98 • Provide grants in the form of serviced land, help to make housing as broadly accessible as possible. Housing secure property rights on safer grounds, and provide needs to be embedded in the broader goal of inclusive home improvement grants for low-income informal and sustainable urbanization. Housing should not only be communities. For a fundamental overhaul of the about the physical structure but also the development of housing finance system, the government needs to thriving neighborhoods and communities where capital create an enabling environment to expand the housing (social, physical, and other forms) are created, making them finance system down-market to reach middle and lower- conducive venues for people to be fully human and alive. The middle income households, so that they can access unit of measure in an effective and efficient shelter program formal housing and do not capture subsidized housing therefore should not be the number of houses produced or or finance. Low income households that cannot access the loans taken out but the number of communities that formal housing or financing, however, will require a more have improved.97 Accordingly, while the recommendations direct government intervention. This includes provision below center on provision of housing and basic services, of support to secure property rights (through programs they should be implemented along with recommendations like CMP), provision of serviced land or if on-site, support to address economic and social exclusions to provide holistic to slum upgrading, and home improvement grants solutions. including for room extensions for rent.99 • Establish an integrated land and ISF information system • Provide infrastructure and site development for formal through citywide participatory mapping. Lack of a but blighted communities and informal communities current inventory of ISFs, their locations, status of the land that are in the process of securing land tenure. Primary they occupy, as well as inventory of idle land that can and secondary infrastructure development should be used for social housing impedes government from be undertaken under the leadership of the LGU to taking swift action and increases the transaction costs. ensure consistency with city-level planning. Tertiary 97 World Bank (2016). “Closing the Gap in Affordable Housing in the Philippines: Policy Paper for the National Summit on Housing and Urban Development”. Washington D.C. 98 World Bank (2016). “Closing the Gap in Affordable Housing in the Philippines: Policy Paper for the National Summit on Housing and Urban Development”. Washington D.C. 99 World Bank (2016). 26 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 26 10/05/2017 10:45 AM infrastructure such as small-scale water supply, drainage, national and local level is absent. Local Government Code sanitation, solid waste management, footpaths, fire safety (LGC) and Urban Development and Housing Act (UDHA) measures, sidewalks and street lights are also needed. spell out that LGUs have the primary responsibility for Identification and prioritization of tertiary infrastructure providing housing assistance and conducting an inventory could be carried out in a community-driven manner of lands to identify sites for social housing. Yet multiple to empower the poor. Disaster risk reduction will be responsibilities coupled with limited land and institutional mainstreamed through design and implementation to capacity, made more pronounced by their dependence on reduce the poor’s exposure to both natural and man- national government for logistics and finances, overburden made disasters. a majority of them. Hence LGU constituents, most of all the ISFs wanting to be engaged in their development process, • Expand connective infrastructure to allow neighboring find difficulty accessing technical and logistical support from areas to benefit from urbanization, including off-city government.101 Concrete cases would show nonetheless that resettlement sites. Properly planned and managed when given technical support, LGUs are able to effectively urban development with good connectivity between carry out their planning roles as demonstrated by initiatives economic hubs and neighboring areas will help such as the Citywide Community Upgrading Strategy decongest the city center and expand residential piloted in three LGUs in Metro Manila.102 There is thus a areas. Better connectivity between large-scale off- need to strengthen support for the LGUs. Additionally, the city relocation sites and economic centers will reduce mandates of key shelter agencies need to be refined, and an attrition rate of social housing. authoritative body that oversees overall urban development needs to be identified or created. Finally, there is a need for continued support to develop and implement key • Help the rental housing market grow. Home ownership policy reforms in the areas of urban development planning, is a major investment and not all households are ready to housing finance, land use management and administration, invest and may opt for rental housing. The government disaster risk management etc. should conduct more research to understand the status of both formal and informal rental markets, and review rent control and any other restrictive regulations, taxes, Social Inclusion or subsidies that discourage rental investments for different segments of the society.100 Identify and design appropriate interventions to address crime and violence based on robust diagnostics. Strengthen institutions that underpin affordable housing and inclusive urbanization Anecdotal evidence suggests that urban poor male youth that are idle are affected by crime and violence more than A coherent assignment of institutional roles and functions others. Drug abuse is also pervasive especially in NCR. in managing the urbanization processes at both the However, there is no comprehensive diagnostic on the 100 World Bank (2016). 101 World Bank (2016) 102 A program spearheaded by the World Bank, the Citywide provides technical assistance to LGUs and builds multi-stakeholder partnerships at the city level toward addressing the housing needs of poor communities. The pilot LGUs are Muntinlupa City, Barangay 177 of Caloocan City, and District 6 of Quezon City. PHILIPPINES URBANIZATION REVIEW POLICY NOTES 27 WB_Policy Notes_Inclusive Growth.indd 27 10/05/2017 10:45 AM P R O M OT I N G I N C LU S I V E G R O W T H B Y C R E AT I N G O P P O R T U N I T I E S F O R T H E U R B A N P O O R drivers, impacts, profiles of perpetrators and victims of crime irrespective of their preference. There is sufficient history and and violence in the Philippines, which allows the government experience of organizing urban poor communities into HoAs, to design appropriate interventions. There is thus a need to and there are good CSOs that can assist the communities. collect more data to better understand these issues. Such The major challenge is who will provide TA funds to support evidence will allow the government to choose from a wide community organizing. SHFC’s HDH program has built in range of interventions– be they sector-specific approaches provisions for CSOs’ TA costs, but this remains a small fraction. such as criminal justice or cross-sectoral approaches such as It is recommended that HUDCC ensures all public housing social prevention interventions or environmental design103 – projects build in TA costs for community organization and that have proven effective in Latin America and Africa, and strengthening. tailor them to the Philippine context. Empower the communities and engage them in the local Facilitate technical assistance to help organize urban poor development process through citywide mapping and communities around collective priority issue of housing. community-driven slum upgrading. Community-based organizations that rally members around It is well established that communities can be effective if specific issues such as home-owners’ associations (HoAs) are empowered to undertake planning and decision-making more likely to be able to reach out to a broad spectrum of of their own affairs. By providing hands-on facilitation, households in heterogeneous urban communities rather capacity building, and engaging them in community-driven than generic community groups.104 Given the significance mapping and slum upgrading, and providing opportunities and magnitude of the need for affordable housing, organizing to engage with LGU officials, urban poor communities will communities around the housing agenda is likely to gain be empowered and social cohesion within the community traction from the ISFs. Benefits of organizing communities will be strengthened. Increased social cohesion can nurture have also been proven in that while under the national mutual trust that helps mitigate crime and violence. resettlement program, organized communities developed Moreover, increased interaction between the LGU and the a People’s Plan and had a voice in their resettlement, while communities helps generate social capital which can be those unorganized ended up being resettled in large-scale harnessed by LGUs toward advancing local development off-city resettlement sites mixed with numerous communities and housing initiatives. 103 World Bank (2011). “Crime and Violence in Central America: A Development Challenge Volume I”. Washington, D.C. 104 World Bank (2011). SIM. This work is a product of the staff of the World Bank Group with external contributions. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank Group or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 28 WORLDBANK.ORG/PHILIPPINES/URBANIZATION WB_Policy Notes_Inclusive Growth.indd 28 10/05/2017 10:45 AM