The State, Banks, and Development Policy: Focus On The Role of GFIs On Social Housing in The Philippines

THE STATE, BANKS, AND DEVELOPMENT POLICY: FOCUS ON
THE ROLE OF GFIs IN SOCIAL HOUSING IN THE PHILIPPINES
A Proposed Dissertation Presented to

The Faculty of Political Science Department
College of Liberal Arts
De La Salle University
In Partial Fulfillment for the Requirements for the Degree

Ph.D. in Development Studies
By:
Dwight B. Perez
2021
ABSTRACT
In the face of the worsening housing shortage problem of the urban poor in the
Philippines,this study endeavored to answer this main question: Why was Philippine
socioeconomic development particularly in social houses financing in such a
longstanding lag? The study argued based on the historical-structural analysis of socio-
economic development particularly the housing financial system, and found the
following main findings: 1) There was a large gap or failure between the actual result or
performance in terms of housing units produced by the National Shelter Program; 2)
The policy of encouraging the active participation of private banks under the Home
Insurance Guaranty Program from in peso terms and number of loan accounts
benefitted minimally social housing, and more for market housing; and 3) The policy of
encouraging the participation of private developers, and authorizing them as loan
originators by the United HomeLending Program resulted to the granting of loans with
state patronage to a few particular interests as indicated by their huge loans granted with
corresponding low collection efficiency ratio. It was shocking to note that both the state
banks and the private banks were profit-oriented since the main beneficiaries of the
housing loans were more on the middle and upper end of the market rather than its
target beneficiaries which were the poor. The study further argued that the state played a
weak role in implementing the social housingprogram for the poor because it lacked the
political will and relative autonomy from an affluent or particularistic class to
effectively pursue its development goals.

PREFACE
I am really obsessed by studying the nature of the Philippine Patrimonial
Oligarchic State as I think I was able to contribute to a new theory of the state in the
Philippine social housing financing that evolved from Weber’s framework of the
State and Capitalist Development. Basically, the major question of this study was:
Why was Philippine socioeconomic development particularly in social houses
financing in such a longstanding lag?
According to the Philippine Development Plan the new housing need from
2012 to 2030 was projected at 6.3 million with Socialized Housing needing 25%
of the housing needs while those who cannot afford were estimated at 23%.
Furthermore, economic housing comprised the highest with 42% and low-cost
housing at 10%. There should be no need any more for mid-cost housing and
high-end housing for these belong to the upper levels of society. These social
housing problems had been a perennial issue and for long a time now nothing
substantial had been done to improve the situation. Elites and particular classes
loaned money from Government Financial Institutions but paid little as the Home
Mortgage Finance Corporation (HMFC) was milked to death as it was declared
bankrupt in 1999. Moreover, the Philippine state was not autonomous from the
oligarchs and particular classes that somehow disrupted socio-economic
development especially in the area of social housing financing. Among the
countries in the ASEAN (Association of Southeast Asian Nations), the

Philippines had the lowest public housing budget with only 0.12% of the GDP
(Gross Domestic Product. As such, I wondered why did the government allow
such a small amount of social housing which was immensely important to the
poor majority of Filipinos? This was why I decided to write this dissertation to
explore the reasons for this housing misery.
During the post-war years, the country was more progressive than its
neighbors. It was only Japan that was more superior in socio-economic
development than the Philippines. Unlike its neighbors, the country was relatively
more superior in industrial growth, and further than that it was more politically
stable as well as an unpoliticized military. What happened? The answer to this
question had varied as time passes. During the 1970s as democratic institutions
and economic development were declining. The economy may be contracting but
this can easily be solved by a dose of authoritarian policies wherein the
Philippines can be evolved into a planned economy that should boost economic
growth.
When President Ferdinand Edralin Marcos declared Martial Law in 1972,
he declared war against the “old oligarch” and brought new socio-economic
reforms to the country. Cronyism became rampant and a new oligarchy emerged.
During the beginning, there was some success for the Marcos State, however, the
primary engine.of economic growth was foreign debt and unfortunately, this
money was used for building Marcos’s statues in Ilocos Norte and other areas of
the country aside from luxury hotels and industries located in the Ilocos region
which failed because there were no customers for these businesses. Marcos of
course was the hero of the Ilocanos and was fond of favoring projects for them
since he was from there. On the other hand, some projects were beneficial to the
economy. As many of the old oligarchs came from the sugar industry, he seized
control of it by creating the National Sugar Trading Corporation (NASUTRA)
headed by his favorite crony Ambassador Roberto S. Benedicto which controlled
the exportation of sugar as well as its prices. Sugar prices went down and many of
the sugar planters declared bankruptcy. The economy was in a “ limbo” for twenty
years during martial law and the peso rate devaluated several times and ended up
to Php20.53 to the U.S. dollar from Php 6.00 to the U.S. dollar.
After the EDSA Revolution which ousted Marcos that enjoyed his regime
from 1965 to 1986 and who was considered the most corrupt president in the
world during that time. By the way, it was during Martial Law wherein the First
Lady Imelda Marcos created the PAG-I big Fund that forced the low-salaried
employees of the private sector to contribute funds from their salaries to provide
low-cost housing for them.
As such, Marcos tried to abolish the old oligarchy but created his oligarchs
which were the beneficiaries of his favoritism and even his fellow Ilocano Lucio
Tan took over the operations of a bank that was closed by the Central Bank at a
minimal price. Nevertheless, the promise of progress and economic development

under authoritarian rule failed and the country was left with no money in the
treasury since it was “milked to death” by a dictator in a predatory state. As
Corazon Aquino took over as President, she brought new hope for the country.
During the early 1990s, the basic patterns in the domestic scene remained
persistent even after the Marcos years. It was necessary to explore that there might
be a major cause for the underlying problems of development in the country. This
study argued that there might be through careful examination of relations between
the state and dominant economic interests. Simply put, successful economic
development was limited to a large extent by weaknesses of political development.
During the turn of the millennium from 2000 to 2016, the Arroyo
administration and the Benigno Aquino, Jr. Administration improved economic
development after the scandalous Estrada administration which was short-lived
due to graft and corruption. Nevertheless, the Arroyo administration did have her
fair share of scandals and corruption and the son of Corazon Aquino may not be
that corrupt but people under him including the military had serious scandals on
corruption such as his former PNP chief that illegally ordered the SAF 42 mass
killing that eventually led to his downfall and his favored successor former DILG
secretary Roxas lost to Duterte in the elections. As an aftermath, the Duterte State
claims to be a strong leader and promised to wipe out the drug problem in six
months and resulted in thousands of death of suspected drug addicts and pushers.
Even some were just suspected but were summarily killed just like during the
Martial Law years. Now, the International Criminal Court (ICC) summoned
Duterte to appear in order to explain it but he refused.
However, until now the drug problem had not been solved. Again, he
vowed to destroy the old oligarchs but also like Marcos created his oligarchs. The
economy was maintained minimally during his administration due to foundations
left by the Arroyo and Aquino administration. He continued the Build Build Build
policy of the government to improve infrastructures and create employment.
However, during the pandemic until today the economy contracted as in other
countries around the world too.

TABLE OF CONTENTS
Approval Sheet i
Abstract ii
Acknowledgements iii
Preface iv
List of Figures v
List of Tables vi
Introduction vii
I THE PROBLEM AND ITS BACKGROUND 19
1.1 Background of the Study 19-26
1.2 Theoretical/Conceptual Framework 27-31
1.3 Statement of the Problem 32
1.4 Significance of the Study 32-36
1.6 Scope and Limitations of the Study 36-37
1.7 Definition of Terms 37-38
II REVIEW OF RELATED LITERATURE 39
2.1 Introduction 39-40
2.2 Foreign Studies 40

Macro-Economic Frameworks 40-54
2.4 State Theory and Institutional Economics Theory 54-55
2.5 New Growth Theory 55-56
2.6 Market Failures and the Role of Government 56-57
2.7 The Weberian State Theory 57-61
2.8 Weberian State and Financial Institutions 62-64
2.9 The Neo Marxist Theory 64
2.10 The State and Housing Finance 64-67
2.11 Local Studies 67-70
2.12 Government Financial Institutions 70-71
2.13 GSIS Housing Financial Institution 71-72
2.14 Philippine Social Housing and Housing Finance 71-74
2.15 Synthesis 74-79
III METHODOLOGY 80
3.1 Introduction 80
3.2 Research Design 80-81
3.3 Philosophical Stance 81-86
3.4 Data Gathering Activities and

Methods of Analysis 87
3.5 Interviews 87
3.5 Data Gathering Sources 87
3.8 Ensuring Research Quality 88-89
3.9 Ethics 89-90
IV RESULTS AND DISCUSSION 91-152
V CONCLUSIONS AND SUGGESTIONS
FOR FURTHER STUDIES 153-174
REFERENCES 175-184
APPENDICES 185-259
LIST OF FIGURES
1. Theoretical Framework Diagram

2. Conceptual Framework Diagram Figure
2a Hutchcroft Heuristic Typology of Capitalist Systems
3. Inflation Rose Sharply
4. Credit Has Sustained Its Double-digit Growth Rates
5. Distribution of Loans Among Private Developers and Banks
1987 to 1996
6. From Diosdado Macapagal to the Duterte State Performance in terms
of GDP Growth Rate 1961 to 2019
7. ASEAN Public Housing Expenditure, 2000-2014
8. Economic Mobility in the Philippines Compared to the Region
LIST OF TABLES
1. The Ramos State 1993 to 1997 and the Beginning of the Estrada State 1998
Planned vs. Actual Housing Units by Programs
1993 to 1st Semester of 1998
2. The Ramos State 1993 to 1997 and the Beginning of the Estrada State 1998:
Direct Housing Program, Planned Housing Units vs. Performance
3. The Ramos State 1993 to 1997 and the Beginning of the Estrada State
1998Comparative Analysis Between Planned and Actual Expenditures
(in millions)
4. The Ramos State 1993 to 1997 and the Beginning of the Estrada State
5. Housing demand and supply profile, 2001-2011
6. Housing Accomplishment of the Benigno III State 2010 to 2016
7. Housing Accomplishments from 2014 to 2019
8. Distribution of Loans Among Private Developers and Banks 1987 to
1996
9. New Housing Need, 2012-2030
10. The Aquino III State and the Duterte State: Economic Performance
Philippines GDP Growth Rate 2011 to 2019
11. Philippines GDP Per Capita 2008 to 2019
Introduction
In 2017, the Southeast Asian locale has recorded a combined populace of over
640 million individuals - around 8.5 percent of the world’s populace - as ASEAN
(Association of Southeast Asian Countries) turns 50 a long time ancient. Concurring to
a World Bank report, ASEAN is as of now the world’s third-biggest showcase ahead of
Japan, the USA, and the EU (European Union). At the same time, the locale is
domestic to a few of the world’s speediest developing economies like Vietnam and the
Philippines with development rates of over six percent.
The ASEAN region will have the world’s fifth-biggest economy by 2020, as
detailed by Bloomberg. Typically, certainly a reflection of how distant the locale has
advanced after decades of war and conflict. However, ASEAN governments are
finding it especially troublesome to fulfill requests for reasonable home taking after
quick urbanization inside the locale. In Malaysia, the Central Bank of Malaysia said in
its 2016 Yearly Report that the shortfall of social housing may surpass one million
units within the country by 2020. The Central Bank of Malaysia included that the
supply shortage has declined in Malaysia - especially between 2012 and 2014 - by the
slower increment in family salary (12.4 percent) relative to the rise in house costs (17.7
percent). (The ASEAN Post, 2017).

Down south, the social housing in Indonesia was enduring the need for directions
that would address social housing issues inside the country. Concurring to the Jakarta
Post, the need for political will to oversee the social housing sector was the major
reason behind this stagnation.
With an add-up to a populace of over 261 million individuals - over a third of
the region’s combined populace - it was astounding to note that the Indonesian
government had not delivered any orderly housing program whereas housing costs
were kept well past the reach of its low-income populace. This was often compounded
by the truth that numerous private developers were uninvolved and this had taken a toll
on housing ventures (op. cit.).
Down south, the social housing in Indonesia was enduring the need for
directions that would address social housing issues inside the country. Concurring
to the Jakarta Post, the need for political will to oversee the social housing sector
was the major reason behind this stagnation.
As the other states in Southeast Asia had their share of housing backlog, The
Philippines had the biggest and longest housing gap with 6.3 million (HUDCC,
2019, DHSUD, 2020). Thus, this study was compelled and motivated by only one
major question: Why was Philippine socioeconomic development particularly
in social houses financing in such a longstanding lag?

As can be seen in the data, the new housing need from 2012 to 2030 was
projected at 6.3 million with Socialized Housing needing 25% of the housing
needs while those who cannot afford were estimated at 23%. Furthermore,
economic housing comprised the highest with 42% and low-cost housing at 10%.
There should be no need any more for mid-cost housing and high-end housing for
these belong to the upper levels of society.
New Housing Need, 2012-2030
Market Segment Price Range Units Needed % of TOTAL Need
Can’t Afford/Needs Subsidy 400K & below1,449,854 23%
Socialized Housing 400K & below1,582,497 25%
Economic Housing 400K – 1.25M 2,588,897 42%
Low-Cost Housing 1.25M – 3M 605,692 10%
Mid Cost Housing 3M – 6M No need
High End Housing > 6M No need
TOTAL Need 6,226,940
Total New Need Average: 345,941 housing units per year
Source: Philippine Development Plan
As compared with the actual performance of the administration of Aquino
III and the Duterte States from 2014 to 2019, these accomplishments were just
way below the housing needs of the Filipinos who were suffering in slum areas as
well renting houses even if their salaries were low just to survive a very basic need
called the shelter.

What went wrong in the social housing financing program of the
government and why did it persist for decades? As for the researcher, it should be
better explored from the paradigm or theoretical lens of Weber’s State and
Capitalist Development and Hutchcroft’s Patrimonial Theory of the Philippine
State. For Weber, the government bureaucracy must be independent and
autonomous from certain predatory or particularistic classes. Unlike in South
Korea and Taiwan, the state is autonomous from certain classes in civil society,
and as such, these countries were able to forward in their socio-economic
development. From a historical perspective, it can even be asked why was it that a
weak state should be a central focus of analysis even as the Philippines lacked the
basic infrastructural needs of the economy were not much as social housing for the
poor.
Chapter One
THE PROBLEM AND ITS BACKGROUND
Background of the Study
Despite the housing issues in Southeast Asia, the housing shortage in the
Philippines was much bigger and continued unsolved for several decades as it jumped
to 3.9 million housing supply gap Thus, This study explored: Why was Philippine
socio-economic development particularly in social housing financing in such a
long-standing lag?
The housing backlog in the Philippines was estimated at 6.3 million households.
Assuming that production of housing units would average 200,000 units every year
from 2012 to 2030, the backlog would persist and hit 6.5 million households by
2030. The highest demand would come from the economic housing segment, followed
by socialized housing, and lastly by low-cost housing. As such, even during the time of
Arroyo and Benigno Aquino III, the State failed to meet the housing needs of the poor
Filipinos and will continue to do so based on the new housing need from 2012 to 2030
based on Statistics from the Philippine Development Plan. The backlog for
housing is estimated to be 3,087,530 based on a new need average of 345,941 housing
units per year. In the Philippines, the affluent class and particularistic interests had
access in the GFIs (Government Financial Institutions) in receiving huge favored

loans by the billions of pesos despite their low collection efficiency ratios. In the sub-
arena of house financing, one may also find the premiere house mortgage financing
institution in the Philippines (the Home Mortgage Finance Corporation) but in 1995 it
was on thebrink of bankruptcy as the Home Development Mutual Fund (HDMF) took
over its operations. Particular groups were able to borrow huge loans from this state
agency but it was milked to death by certain particular classes and was saddled in theend
with billions of bad debts and receivables.
Compounding to this problem, the Philippine state or government allocated only
a small amount for social housing. According to Habito (2009), the State had
budgeted less than 1.0 percent for housing. while other Southeast Asian nations had
higher social housing budget allocations. After decades of social housing
administration by many presidents, the bigger question was: Why was the social
the budget needed by very poor were kept at such a minimal percentage despite its
importance to a government that claims to be pro-poor.
Nevertheless, the Philippine state resorted to a policy and strategy of involving
private banks to help in the social housing program and decided to give incentives
such as giving subsidies for the interest rates they charged but the private banks'
contribution through the Home Guarantee Program was small as was expected and
benefited more the upper echelons of society rather than those who need it.
Indeed, private banks in the Philippines remained to be profitable and did not
bother to provide social projects that could be beneficial for the poor majority
despite the incentives given to them by the government. According to Hutchcroft
(1994), “in a broader sense, analysis of the banking system as a whole provides
valuable insights into state-oligarchy relations. As one bank president said: Banking
is a prism through which to understand power politics in the Philippines (Hutchcroft
1994, pp. 57-58).” Within the arena of banking, one finds what was generally the
strongest of the state economic policy-making agencies (the Bangko Sentral ng
Pilipinas), and many of the most powerful of the elite extended families.”. But
Hutchcroft (1994) argued as he wrote: “the institutional strength of the Central

Bank generally pales in comparison with the power of the oligarchy. The Central Bank
is unable to defend itselffrom the legal attacks of bankers, unable to enact regulations
that will prevent oligarchs from looting the loan portfolio of their banks and unwilling
to challenge collusive practices within the industry (Hutchcroft 1994, p. 58).” Thus,
Hutchcroft’s statement was based on his study of the Philippine state with the Central
Bank as its case had shown that the state was weak. The private banking sector was
expected to play a crucial role in contributing to the social housing program of the
government. The viability of banking on mass housing must indeed be profitable if
properly managed because of the economies of scale. However, the private banking
sector’s dismal performance in helping the state’s housing program in the past few
years was disappointing.
The Philippine state did not have a serious program for social housing over the
years. Its failure to generate adequate housing for the lower echelon of the Filipino
masses persistently over the years led the researcher to wonder why is it that there was
no clear and adequate explanation for these phenomena. This study would argue that this
issue can best be explained from the perspective of “house financing” which was a
crucial area in its development. The spiraling cost of housing had been triggered by the
staggering increase in land prices aswell as the cost of materials in constructing houses.
Thus, at the heart of the problem of social housing is the issue of financing and banking
in this area because of the housing cost factors mentioned. Simbulan (1998) stated that
the government only has a small budget for social housing and left the rest of these
housing needs for the private sector to solve. The problem with this policy was that tthe
funds of the private sector was more tied up with investments in real estate, and another
highly profitable form of business interest.
The State through the housing sector had to be more responsive to the needs of
the poor. The success of the National Shelter Program requires a favorable environment
for housing finance. Thus, the government must ensure the financial health of state-
owned housing finance institutions and encourage the entry of housing micro-finance
institutions, including foreign-based microfinance. Scale and sustainability will only
come through developed capital markets, not continuously using government funds.
The state institutionalized the Housing and Urban Development Coordinating
Council (HUDCC) as the premier policy-making body in finding solutions and
program implementation on social housing and the Government Financial Institutions
(GFIs) that were identified as the principals in providing financial support were the
following: Social Security System (SSS), Government Service Insurance System
(GSIS), the Home Development Mutual Fund (HDMF), the National Home Mortgage
Finance Corporation (NHMFC), and the Home Insurance Guaranty Corporation
(HIGC).
The role of Government Financial Institutions (GFIs) in financing social housing,
and the private banks in the Philippines is an issue that must be examined and
addressed in light of the worsening housing problems in the country. The amount which
the state allocatedfor the socialized housing program was insufficient to cover the real
needs of housing for the poor. The state, thus, resorted to a financial policy for housing
that relied on the private sector to enhance the construction of social housing. The World
Bank reported the failure of social housing, and increasing problems of poverty in the
Philippines. The underlying factor that caused this according to them is the failure of the
landmarket. This was true but this paper argued that this was not the only critical factor
and that the nature of the Philippines in the financial system was not autonomous from
the elite and particularistic interests which hampered economic development that affected
social houses financing.
Research Gaps
Nevertheless, the research gaps based on the various frameworks from the review
of related literature found that terms of the framework used by Rivera in evaluating the
weak state in the Philippines were Neo-Marxist and as such differs from the Weberian
patrimonial state framework of Hutchcroft. However, the institutional economics
framework that was used in the study was different from the Weberian framework on
Capitalist development that Hutchcroft utilized in comparing nation-states. Moreover,
Ebekozien's (2020) framework was more economics orientated and studied more on the
policy impact of nation-states on social housing but did not examine why these states
failed or succeed in their housing programs about the kind of framework that Hutchcroft
classified from Weber’s theory of the state. The methodology of Yap (2015)
acknowledged the impediments of the market for housing the destitute and stresses
government to recognize and upgrade informal settlements and to create imaginatively

approaches to low-income housing. In recent times, most governments in Asia to follow
the “enabling state” framework because it has demonstrated to be viable in conveying
satisfactory housing to expansive segments of the urban population. In a way, the
research gap was it failed to ask why some states failed and some succeeded.
On the other hand, the research written by Whitehead & Tang (2019)
distinguished three models of reasonable housing conveyance utilized in Asia: 1 Public
sector-led,
2) Private-led, and 3) The Informal delivery model is dominated by informal housing
systems and underdeveloped financial systems, even though there were some government
policies in place. This group included India, Indonesia, Pakistan, the Philippines, and
Vietnam, as well as other countries not included in the study (such as Bangladesh).
However, the framework utilized in this study was based again on an Institutional
Economics framework and the methodology was economics orientated while Hutchcroft
argued that the Weberian capitalist development framework is better since it ranged from
the predatory state to the development states continuum similar to Evans.
On the other hand, According to Llanto et.al. (1998) of the Philippine Institute of
Development Studies (PIDS), the real problem in Philippine housing was not on building
more houses since it will be a gigantic task for the government to provide such a massive
budget for the poor but access to housing. His methodology was to look into the
government subsidies in providing the poor access to housing. and concluded that the
beneficiaries of the housing subsidies were not the poor but those who belong to the
upper bracket (Llanto et.al.1998). Again, the methodology was economics orientated and
the
the framework was based on Institutional Economics but the research gap is again to
answer the question of why the Philippine state failed to provide social housing to the
millions of Filipino poor. In contrast, the Weberian framework as used in this study
intends to explore the reasons such as a particularistic class that dominates the banking
and housing financial system including housing finance. According to Rebullida (2016),
by organizing and mobilizing community-based and sectoral organizations, intervening
by joined together NGOs, and the urban community to push the government to give
access to the urban poor One social housing plot grasped by the government, the
Community Mortgage Program. Again, the framework was “enabling the state” in the
provision of social housing to the urban poor. The methodology of Valte was based on
research through documents and concluded that the Philippine state assumed the
"enabling" role, whose definition was distorted by the National Shelter Program when the
government ultimately became the provider of funds to "enable" others to build and sell
houses. According to Arcilla (2019), the need for affordability could be a persistent issue
in socialized housing programs in the Philippines. The unique framework of Arcilla was
the human rights framework argued by the United Nations Commission on Human Rights
(UNCHR). In contrast, the research gap of the study is to answer why socio-economic
development particularly in social housing failed for a long-time in the Philippines again
can be answered by the proposed theory on housing finance in the Philippines being
argued by this study as based on the Weberian framework of Hutchcroft.
which
Theoretical Framework
Thus, this study was anchored on Hutchcroft’s Weak and Developmental States.
For Hutchcroft, it was clear that only a strong state can be effective in transforming
society, on the other hand, a weak state was ineffective, and in a sense, it had no relative
autonomy to effect much-needed change in a given country. This can be exemplified with
the existence of power elites in a given society which would tend to predominate politics
and economic policies particularly in many underdeveloped countries such as the
Philippines.
According to Hutchcroft (1991), the weak state in the Philippines was due to its
patrimonial nature wherein the state was a captive of the oligarchy that was closed to
the administration of the government as reflected by the housing borrowers that were
able to milk the housing financial institutions despite their low collection efficiency
ratio and still were able to borrow again with the GFIs ignoring their loan non-
payments.
Hutchcroft (1994) in his study of the Philippine state in the banking industry
concluded that the state was weak in terms of its poor performance and efficacy in the
financial system. However, he discovered that the state as represented by the Central
Bank was a captive of powerful elites who were autonomous and powerful. It was also a
source for cheap loans vital to their further accumulation of wealth. He further contended
that the the Philippine state was continually bombarded with demands of favored elites
with particularistic demands such as favored loans or licenses in the banking industry.
According to him, the Philippine Financial System was defective and it did not
work for the greater benefits to those who need it in society. Hutchcroft explains further:
If the system genuinely worked for the greater good, perhaps weak
state regulation and rampant favoritism could be overlooked. But it
does not: there are four major areas in which the Philippine financial
system performs poorly and hampers larger developmental objectives.
First, it discourages the efficient allocation of credit. There are three
major types of commercial banks: patronage-infested government
banks (most importantly, the Philippine National Bank, but formerly
two small banks as well), a large number of private banks, most of
which are family-dominated, and four highly profitable branches of
foreign banks, all of which have been in operation since at least the late
1940s (Hutchcroft, 1994, p. 66).
The framework of Hutchcroft was based on Weber’s Patrimonial theory of the
state based on the efficacy of the bureaucracy, organization, and autonomy of the state
from certain classes or particularistic interests in the banking system Thus, the researcher
anchored this study on the theoretical lens or theoretical framework of Hutchcroft (1994,
1998).
The heuristics of this study can be seen in Figure 1. It was proposed by Weber
and Hutchcroft using the State and Capitalist Development Paradigm. As Weber
wrote, "the patrimonial state lacks the political and procedural predictability.
Indispensable or capitalist development, which is provided by the rational rules of
modern bureaucratic
administration. In employing the patrimonial framework, however, it is important not to
obscure four critical differences between the postcolonial Philippines and the economies,
societies, and polities analyzed by Weber many decades ago. (Hutchcroft, 1998 p.69).
On the upper portion of the matrix, one finds the two major types of production-
oriented capitalism, and on the lower portion of the matrix were the two major types of
rent capitalism. The horizontal axis, it was important to note, is not a measure of state
autonomy. Because patrimonial states by definition lack a clear separation between the
private and the official spheres, they cannot be considered autonomous. By focusing on
cross-national differences such as those found in the typology, it was possible to
understand better why rent-seeking behavior predominates in some settings, yet was far
more constrained in others. Economists who theorized about rent-seeking, not
surprisingly,
generally confined their discussions to micro-level behavior within "the rent- seeking
society." and had very little to say about the state structures in which this behavior most
thrived. To the extent that rent-seeking theorists did examine cross- national differences,
they tended to make the mistake of presuming that the degree of rent-seeking was
dependent on one simple variable: the more government intervention in the economy, the
more rent-seeking (Hutchcroft, 1998 pp. 99-102).

If one were to rely on this framework, it would be hard to fathom how some cases
of government intervention had so effectively guided the process of economic
transformation (as in the upper left-hand corner of the matrix). the matrix one finds the
two major types of production- oriented capitalism, and on the lower portion of the
matrix were the two major types of rent capitalism. The horizontal axis, it was important
to note, was not a measure of state autonomy. Because patrimonial states by definition
lacked a clear separation between the private and the official spheres, they cannot be
considered autonomous (op. cit.).
Figure 1 Theoretical Framework Diagram
Statist Capitalism Laissez-faire
(Developmental State) Capitalism (Regulatory
State)
"Bureaucratic" Booty Capitalism
Capitalism (Patrimonial (Patrimonial Oligarchic
Administrative State) State)

Conceptual Framework
The conceptual framework of the study would consist of the dependent variable
which was the State Autonomy in providing social housing financing for the poor. The
independent variables were the following:
1. Efficacy of the Philippine State to finance social housing; and
2. GFIs and the private banks profit-oriented and were not pro-poor.
3. Affluent and Particularistic Interest Influence over the State
Figure 2 Conceptual Framework Diagram

Statement of the Problem
The central question of this study was: Why was Philippine socio-economic
development particularly in social housing financing in such a long-standing lag?
The sub-questions of this study were the following:
1. What was the performance of the GFIs (Government Financial Institution in
financing social housing from 1987 to 2019 as compared to their targets?
2. What factors affected the performance of the Government Financial
Institutions?
3. What was the nature of the Philippine state which affected the financing of
social housing?
Significance of the Study
The contribution to the theory of this study was that based on the various
theoretical framework reviewed on the role of the state in social housing finance,
research gaps were found and this exploratory study argued based on the Weberian
patrimonial state theory that the other theoretical frameworks reviewed this study’s
central question: Why was Philippine socio-economic development particularly in
social houses financing in such a long-standing lag? Nevertheless, the research gaps
based on the various frameworks from the review of related literature found that terms
of the framework used by Rivera in evaluating the weak state in the Philippines were
Neo-Marxist and as such differs from the Weberian patrimonial state framework of
Hutchcroft. Furthermore, the institutional economics frameworks that were used in the
other related studies that were reviewed were different from the Weberian framework
on Capitalist development that Hutchcroft utilized in comparing nation-states.
Moreover, Ebekozien’s (2020) framework was more economics orientated and studied
more on the policy impact of nation-states in social housing but did not examine why
these states failed or succeed in their housing programs about the kind of framework
that Hutchcroft classified from Weber’s theory of the state. The methodology of Yap
(2015) acknowledged the impediments of the market for housing the destitute and
stresses government to recognize and upgrade informal settlements and create
imaginative approaches for low-income earners. Moreover, Ebekozien (2020)
advocated that in recent times, most governments in Asia followed the “enabling
state” framework because it has demonstrated to be viable in conveying satisfactory
housing to expansive segments of the urban population. In a way, the research gap
was that it failed to ask why some states failed and some succeeded.
On the other hand, the research written by Whitehead and Tang (2019)
distinguished three models of reasonable housing conveyance utilized in Asia: 1. Public
sector-led, 2) Private-led, and 3) The Informal delivery model which was dominated by
informal housing systems and underdeveloped financial systems, even though there were
some government policies in place. This group included India, Indonesia, Pakistan, the
Philippines, and Vietnam, as well as other countries not included in the study (such as
(Bangladesh). However, the framework utilized in this study was based again on an
Institutional Economics framework and the methodology which was economics
orientated while Hutchcroft argued that the Weberian capitalist development framework
was better since it ranged from the patrimonial state to the development states continuum.
On the other hand, According to Llanto et.al. (1998) of the Philippine Institute of
Development Studies (PIDS), the real problem in Philippine housing was not on building
more houses since it will be a gigantic task for the government to provide such a massive
budget for the poor but “access to housing.” His methodology was to look into the
government subsidies in providing the poor access to housing. and concluded that the
beneficiaries of the housing subsidies were not the poor but those who belong to the
upper bracket (Llanto et.al.1998). Again, the methodology was economics orientated and
the framework was based on Institutional Economics but the research gap was again to
answer the question of why the Philippine state failed to provide social housing to the
millions of Filipino poor. In contrast, the Weberian framework as used in this study
intended to explore the reasons why such as a particularistic class dominates the banking
and housing financial system including housing finance. According to Rebullida (2016),
organizing and mobilizing community-based and sectoral organizations, intervening by

joined together NGOs, and the urban community pushed the government to give access to
the urban poor. One such social housing plot grasped by the government was the
Community Mortgage Program. Again, the framework was “enabling the state” in the
provision of social housing to the urban poor. The methodology of Valte was based on
research through documents and concluded that the Philippine state assumed the
"enabling" role, whose definition was distorted by the National Shelter Program when the
government ultimately became the provider of funds to "enable" others to build and sell
houses. According to Arcilla (2019), the need for affordability could be a persistent issue
in socialized housing programs in the Philippines. The unique framework of Arcilla was
the human rights framework supported by the United Nations Commission on Human
Rights (UNCHR). In contrast, the research gap of the study was to answer why socio-
economic development particularly in social housing failed for a long-time in the
Philippines which again can be answered by the proposed theory on housing finance in
the Philippines being argued by this study as based on the Weberian framework of
Hutchcroft.
In terms of contribution to a new theory, this study argued that a new theory about
the weak state in Philippine housing finance had evolved based on Hutchcroft’s theory of
Booty Capitalism (1998) and his earlier work on Predatory Oligarchy in the Philippine
Banking System (1994). Also, using the state as a conceptual variable in pursuing
specific kinds of housing finance policies in the Philippines, would promote a
comparative understanding of the capacity of the third world state in this area. This was in
line with Hutchcroft’s theory of the weak state in the Philippine financial sector as
Hutchcroft focused on the poor performance of Philippine banksin the light of a predatory
oligarchy in this area.
Hutchcroft argued that the Philippine state was patrimonial and its oligarchy
predatory in the banking system, this study utilized this framework. Also, another sign
of this study was that by examining Philippine state financial policies with a focus on
the role of government financial institutions in social housing, the factors that caused
underdevelopment in housing finance in the Philippines will be uncovered so that long-
term policies can be formulated to promote sustainable and balanced socio-economic
development in the Philippines.
Social housing was a very vital need for millions of urban poor who lived in their
make-shift houses as well as to low-income employees who cannot afford decent housing
for their families. Also, the growth of urbanization and population required a second look
at defective housing financing policies which were rooted in the defective structure of the
housing finance sector. Thus, the importance of this study cannot be over-emphasized as it
explored the root causes of socio-economic development particularly in social housing
financing about the nature of the Philippine state.

Scope and Limitations of the Study
The study’s scope and limitations are the following:
1. The focus of the study was on the Government Financial Institutions especially the
Home Development Mutual Fund about the National Shelter Program and its
contribution to socio-economic development particularly in social housing financing.
The data gathered from key agencies of the National Shelter Program were limited to
housing expenditures, planned number of housing units, actual expenditures from 1987 to
2019; and
3. Since this study was exploratory. it was limited only to available data, publications,
newspapers, journals, interviews, etc. that would be proved that the nature of the
Philippine state was a Patrimonial Oligarchy State.
Definition of Terms
For the reader to understand and clarify better the essence of this study, the
followingterms are conceptually and operationally defined as follows:
The state. It was operationally defined as the President or the executive of a country
who is mainly responsible for its socio-economic development.
Development policy. These were the major thrusts and programs of governments that
provided aframework or guide for development.

State banks or GFIs. It was operationally defined in this study as the state in the
housing finance sector. Itis composed of the Government Financial Institutions (GFIs)
namely: The Home Development Mutual Fund, the National Home Mortgage Finance
Corporation, Social Security System, Government Service Insurance System, and the
Home Insurance Guaranty Corporation.
Policy. These were the major programs, plans, strategies, and targets of an
institution orgovernment agency.
Social housing. It was a housing program for the lowest 40 percent of the
population in the Philippines.
Political will. It was the will of the state or the government to attain sufficiently its
programs or policy targets.
State autonomy. The state could pursue its programs effectively through
independence from particular interests and influences.
Takeout. These were loans granted to housing beneficiaries.
Pro-poor. This was operationally defined as a state policy favoring the lowest 40
percent of thepopulation in the Philippines particularly in social housing.
Banks. These were entities involved in financial intermediation such as commercial
banks, thrift-banks, etc.

Chapter Two
REVIEW OF RELATED LITERATURE
Introduction
The first part of this Chapter reviewed the development theories and frameworks
that were utilized in other countries around the globe. The frameworks started with the
earlier theories of development which were the classical ones such as Rostow’s
development stages framework. The work of Rostow was considered as part of the
classical theories called the Expanding Capital Nucleus Paradigm. This was supported by
Harrod, Domar, Kuznet, and Chenery. Furthermore, classical studies on economic
growth/development as it relates to financial markets since these studies were useful in
understanding the inter-relationship between economic development and housing finance
in the Philippines.
On the other hand, another group of theories emerged and known as dependency
theories and these theories had somewhat a contrasting paradigm as compared to the
Expanding Capital Nucleus Paradigm that started with Frank’s dependency theory in
1967 with Latin American countries as his research location. The dependency approached
was further enhanced by Furtado in 1976 and again with Latin American countries as his
research object. The development theories where the State had a central role in
socioeconomic development were discussed including their arguments. These state
theories included neo-Marxist or Marxist approaches as well as Weberian arguments such
as the arguments of Skocpol, Hutchcroft, and Evans. Local studies and frameworks were
also reviewed including Hutchcroft’s patrimonial theory of the Philippine weak State as
well as other frameworks argued by Buendia, Rivera, Villacorta, McCoy, Manapat, etc.
As based on these various and opposing arguments and paradigms from different
authors and experts in development policies, the researcher synthesized the study and
concluded that the appropriate framework for this study was the Weberian approach to
economic development by Hutchcroft particularly his theory of the patrimonial weak
state in the Philippine Financial System. As this study was about the role of the state,
banks, and development policy with a focus on the Government Financial Institutions
(GFIs) in social housing finance in the country, the framework of Hutchcroft was useful
in analyzing the political economy of development in social housing finance.
Macroeconomic Frameworks
In terms of macroeconomic concepts, people (Samuelson, 1973, Friedman, 2008)
should understand that the gross national product is an important measure of the
performance of the economy, it measures total consumption, total investments, total
goods and services, and net exports. From the standpoint of production, it also measures
the extent of agriculture, industry, and service performance.
Aggregate demand is the total demand performance in the entire economic system
in a given country while aggregate supply is the performance of the production of goods
and services in the entire economy. These are important information for people since
these provide them with an idea of what is going on in the economy particularly the
market for goods and services.
When the level of unemployment (Samuelson, 1973, Friedman, 2008) in an
economy is high, it is not a good indicator for the future of its citizens since employment
is important to earn income while if there is inflation prices increase, and in such a
situation the purchasing power of people will decline. During deflation, prices would
decrease; it might be good news for consumers but not for producers which depend upon
lucrative prices to produce their products.
There were two basic policies wherein government regulators control the flow of
funds in an economy and these were through monetary and fiscal policies. Monetary
policy usually was utilized through the central bank or the Federal Reserve wherein the
flow of money is controlled through easy or tight money policies. Easy money policy
occurs when the circulation of money increases through decreasing the rediscount rate of
the Federal Reserve. These encourage banks to decrease their interest rates so that more
businessmen will be encouraged to get a loan. If there were more loans, money
circulation increases and there will be more money for spending and investments.
On the one hand, the Federal Reserve (McConnell, 1969, Samuelson, 1973,
Friedman, 2008) discouraged money circulation through tight money policy. This is done
by increasing the rediscount rate and the banks will increase their interest rates which
would result in lesser businessmen applying for loans. Thus, there will be a decrease in
the circulation of money available for investments or spending.
Fiscal policy was utilized when the (Samuelson, 1973, Friedman, 2008)
government sees that there is a need to increase or decrease money to circulate in the
economy. Increasing the money circulation could be done through public spending such
as building infrastructures, public employment, etc. These would result in more
employment, and income resulting in more available money for spending.
Fiscal policy can also be utilized through taxation wherein money circulation can
be controlled through higher taxes. On the one hand, higher taxes can also provide the
government with more money to spend for government projects and again increase
money circulation.
The macroeconomic theory calls for the utilization of savings, investments,
monetary policy as well as fiscal policy in implementing economic change and
development which will increase aggregate output as reflected through the Gross
Domestic Product (GDP) of a country.
According to Rostow, (1962), growth and development to economic maturity
would follow through certain stages such as starting with the traditional society; the preconditions
for take-off; the take-off; maturity; and high mass consumption. According to him, the industrialized
countries such as the United States and Great Britain were the first ones who reached the maturity
stage, and that the developing countries had to undergo the first three stages first before they can move
towards maturity. As a pre-requisite for take-off technology, capital, and investments were needed and
that was the reason why they need direct foreign investment, foreign loans, technology transfer from
the advanced countries to expedite the development of backward countries (Rostow, 1962). The
Harrod-Domar Growth Model had already hypothesized the importance of savings,
investment, and technology in the development of an economy before Rostow did
(Harrod, 1939; Domar, 1946).
On the other hand, the works of Simon Kuznets (1964), and Hollis Chenery (1981)
were similar to the work of Furtado but mainly for the exception that he posited in a neo-
Marist way that the unequal distribution of income and monopolies were the main
constraints to economic development. At any rate, Kuznets and Chenery argued that the
most important factor in development was technology and capital.

Kuznets (1973) examined the less-developed nations' growth rate patterns
especially in national income and studied the evolution of a county’s development from
agriculture to industry and services. Similarly, Chenery (1981) studied the developing
countries in such an approach. The long-term economic growth model as explained
through the Cobb-Douglas (1928) production function was that output (GDP) was a
function of capital, labor, and technology. As such, the long-term economic growth of a
country would depend upon investments and savings to support the capital stock of a
country. In addition, labor or employment was also important in contributing to output
especially with the integration of technology which would result in productivity (Todaro,
2000). The computations, as well as the model for the long-term economic growth as
based on the Cobb-Douglas production function, were also utilized by classical
economists.
Economic Development and The Financial System
According to Mamon et.al (2018), the growth and development of Bangladesh
over the last fifteen years alongside the development of the stock market would ask the
question of whether the development of the stock market had a significant impact on the
economic growth of the country. The time series of data in the stock market growth that
influenced the economic development of the country from 1993 to 2016 was examined
by this study employing ARDL Bounds testing approach. The study found that the
development of the stock market had a direct relationship with the growth of the
economy in the short-run as well as in the long run (Mamon et.al 2018).
The relevance and importance of the research cannot be over-emphasized as the
role of economic growth affects the development of financial markets. As such, the
government would need a study that would confirm the validity of causal relationships
between economic development and stock market growth since these are needed in
government financial policy formulations (op.cit.).
On the other hand, according to Khalil & Chaisrisawat, in most countries, the real
sector of the economy is the crucial part that could result in economic output as can be
seen in the GDP of the country. The real sector which is in partnership with a healthy
financial sector can be advantageous to the economic growth of a country. The findings
of the study imply that there exists an inter-relationship between the real and financial
sector and as such led to the impact of financial markets on the growth of the GDP
(op.cit.).
The relevance and importance of the research are that it can better assist the
government of Thailand in terms of policy recommendations centered upon the stock
market. Thus, these policy recommendations based on this study would be effective since
it was hypothesized that the stock market greatly affects the real economy through GDP
(op.cit.).
Time series data over the first quarter of the year 1993 until the second quarter of
the year 2017 were extracted mainly with both the elements of capital market and stock
markets) and the money market that was hypothesized to have a positive relationship to
the GDP (op.cit.).
It was found that that variation in financial markets’ composition and institutions
do matter, as these three major sections – bond market, stock market, and banks– do not
develop and grow at the same time. However, at a different level of their growth, they
complement each other. The findings of the study imply that there exists an inter-
relationship between the real and financial sector and as such led to the impact of
financial markets on the growth of the GDP (op.cit.).
According to Agosin & Huaita (2012,. this journal studies the overreaction
hypothesis wherein it attempts to answer the question: Does the stock market overreact?
This was developed for stock price behavior, to capital flows to emerging markets. It was
found that a surge in capital flows or capital boom, could predict sharp contractions in
capital flows, or sudden stops in the future. The journal used a list of probable economic
fundamentals as control variables, and the results showed that the best predictor of a
sudden stop is a preceding capital boom. Furthermore, the likelihood of a nation
undergoing a sudden stop increases in probability if the consideration would be the length
of the boom: this likelihood or probability would be more than twice when the boom is
three years old. Moreover, if these rise by three to four times when the boom lasts for
four years.
The study is important and relevant for two reasons. Firstly, the study
hypothesized its contradiction of previous studies that emphasize worsening
fundamentals as the ultimate cause of a sudden stop. Secondly, Secondly, the study is
policy interest because it hypothesized the enormous negative impacts that sudden stops
have on the real economy (op. cit).
The dependent variable in this study was the stock markets in Chile and Latin
American countries and the independent variables were stock price behavior, capital
flows to emerging markets, monetary policy, etc... The sample of the study was taken
from Chile and Latin American countries. The results showed that the best predictor of a
sudden stop is a preceding capital boom. Furthermore, the likelihood of a nation

undergoing a sudden stop increases in probability the consideration would be the length
of the boom: this likelihood or probability would be more than twice when the boom is
three years old. Moreover, if these rise by three to four times when the boom lasts for
four years. It is recommended that in future research, other countries which are emerging
should also be included in the study so that a more comprehensive view of stock market
behavior can be found (op.cit.).
According to Ayaydin & Baltaci (2013), Their study investigated the role of
corruption and banking sector development on stock market development. The results
suggest that there exists a negative relationship between the level of corruption and
financial system improvement. They found that there was a positive relationship between
banking sector development and stock market development in emerging countries. This
paper, in addition, uncovered that macroeconomic factors such as income level, interest
rate, private capital flows, stock market liquidity, investment, and inflation are important
determinants of stock market development in developing countries. The impact of
corruption levels on the stock market was investigated. Furthermore, the study also
examined the effects and reactions of the banking sector to the changes at the corruption
level. For this reason, corruption level and sector development indicator were integrated
and added to the model (op.cit.).
Their study was important and relevant to the emerging countries since it was
important to find empirical analysis to formulate policies for the financial and economic
growth of these emerging economies. The variables of this research would the corruption
levels of 42 emerging economies and their relationship with banking sector development
on the stock market (op.cit.).

The sample of research in their study was taken using panel data of 42 emerging
economies for the period 1996 to 2011. The study found that there was a high degree of
the negative relationship between corruption and stock market development is found.
This result proved that the destructive effects of corruption in these countries were more
important than the positive effects of the development of the banking sector. The results,
in addition, indicated that even though the banking sector was developed, corruption
affected adversely stock market development. Further studies are suggested in the future
to confirm further this study (op.cit.).
In a study by Bayar, 2014). Many nations removed limits on goods, services, and
capital gradually after the decline of the Bretton Woods system. As such, financial
globalization speed-up during the 1980s. This resulted in the development of financial
sectors in many countries. Thus, several studies were conducted about the impact of the
financial sector on critical macroeconomic variables in these years. This paper examined
the possible impact of financial sector development on economic growth in emerging
Asian countries during the period 1992-2011 by panel regression. The study found that
the critical indicators of banking sector development and the stock market had a positive
effect on economic growth in emerging Asian countries. (Bayar, 2014).
This study was important and relevant to the emerging countries since it was
growth of these emerging economies. The study examined the effects of the financial
sector on the economic growth in developing countries in Asia employing panel
regression, development of the financial sector on economic growth in emerging Asian
countries by using panel regression. The utilized the growth of GDP per capita as an
economic growth indicator. In addition, data on deposit money bank assets to (deposit
money + central) bank assets, liquid liabilities to GDP, private credit by deposit money
banks, and other financial institutions to GDP. Furthermore, money and quasi money
(M2) as % of GDP, stock market capitalization to GDP, stock market total value traded to
GDP (%), stock market turnover ratio, and several listed companies per 10K population
as indicators of development of financial sector were employed in running regression
analysis (op.cit.).
The sample of their research data covers 7 emerging Asian countries during the
period 1992-2011 and the data was obtained from the Financial Development and
Structure Database and the World Development Indicators (World Bank, 2013a & 2013b)
(op.cit.)
Their study found that the critical indicators of banking sector development and
the stock market had a positive effect on economic growth in emerging Asian countries.
As such, it was recommended that the development of the financial sector including the
stock market must be pursued vigorously to spur economic growth in these emerging
economies in Asia. Further studies are recommended in the future to confirm and update
the findings of this study. Many nations removed limits on goods, services, and capital
gradually after the decline of the Bretton Woods system. As such, financial globalization
speed-up during the 1980s. This resulted in the development of financial sectors in many
countries. Thus, several studies were conducted about the impact of the financial sector
on critical macroeconomic variables in these years. This paper examined the possible
impact of financial sector development on economic growth in emerging Asian countries
during the period 1992-2011 by panel regression. The study found that the critical
indicators of banking sector development and the stock market had a positive effect on
economic growth in emerging Asian countries. (Bayar, 2014).
Their study was important and relevant to the emerging countries since it was
as indicators of development of financial sector were employed in running a regression
analysis. Many nations removed limits on goods, services, and capital gradually after the
decline of the Bretton Woods system. As such, financial globalization speed-up during
the 1980s. This resulted in the development of financial sectors in many countries. Thus,
several studies were conducted about the impact of the financial sector on critical
macroeconomic variables in these years. This paper examined the possible impact of
financial sector development on economic growth in emerging Asian countries during the
period 1992-2011 by panel regression. The study found that the critical indicators of
banking sector development and the stock market had a positive effect on economic
growth in emerging Asian countries. (Bayar, 2014).

This study was important and relevant to the emerging countries since it was
as indicators of development of financial sector were employed in running regression
analysis (op.cit.)
The sample of the research data covers seven (7) emerging Asian countries during
the period 1992-2011 and the data was obtained from the Financial Development and
Structure Database and the World Development Indicators (World Bank, 2013a & 2013b).
(op.cit.).
Their study found that the critical indicators of banking sector development and
the stock market had a positive effect on economic growth in emerging Asian countries.
As such, it was recommended that the development of the financial sector including the
stock market must be pursued vigorously to spur economic growth in these emerging
economies in Asia. Further studies are recommended in the future to confirm and update
the findings of this study (op.cit.).

According to Owiredu (2016), in most studies, financial systems were found to
have a significant correlation to economic development. The stock market which was a
part of the financial system was hypothesized in playing an important role in economic
growth. This study investigated the macroeconomic determinants of the development of
the stock market in Ghana from 1992 to 2012. The macroeconomic indicators that were
sampled were real income, savings, stock market liquidity, financial intermediary growth,
inflation, and private capital flows with the capitalization of the stock market. These
factors were examined to confirm a relationship with the stock market based on Multiple
Regression Analysis (MRA). The study found that stock market liquidity was significant
statistically with developments in the stock market. However, macroeconomic stability
(inflation), real income, and domestic savings, and private capital flows were found to
have no significant effect on stock market development with regression coefficients less
than 5% level of significance (op.cit.).
The establishment of the macro-economic indicators with stock market
development needed to be crucial in policy-making for government decision-makers.
The macroeconomic indicators such as the real income (GDP per capita income),
domestic saving, stock market liquidity, financial intermediary growth, macroeconomic
stability (inflation), and private capital flows with stock market capitalization used as a
proxy for the study were collected and used for the analysis. These variables were
examined to establish a relationship with stock market developments based on a linear
regression model (op.cit.).
Based on the study of Ogbebor et.al (2020), the opening of the Market could have
a positive effect on economic growth due to cost reduction and international risk
diversification particularly in most developing countries amongst others in Nigeria.
Employing a set of econometric approach involving unit root test, co-integration, vector
error correction model, and granger causality, there was proof that present value of
economic growth resulted in disequilibrium from previous indicators of real gross
domestic product, stock market development, foreign direct investment, trade openness,
inflation, and banking sector development in the long run. The result also found that
previous indicators of real gross domestic product, foreign direct investment, and trade
openness promoted economic growth in the short run. The paper, therefore, concluded
that there were bi-directional causalities in the short term and the long term between the
dependent and explanatory variables. Based on the findings, the study suggested that
policy makers in Nigeria should focus on factors that can promote the development of the
stock market, foreign direct investment, trade openness, inflation, and banking sector
development to stimulate economic development (op.cit.).
The relevance and importance of the research were that the relationship of the
stock market to the macro-economic factors was crucial to policy-making in the
government. The explanation of variables GDP was measured as a yearly percentage
change in the growth of real GDP. It is the dependent variable and in effect establishes a
causal relationship between the dependent and explanatory variables. The rationale for
the labor effect on growth since labor was an important variable in the growth of GDP.
Stock market development which showed the size of the stock market was measured by
the ratio of market capitalization to GDP and the researchers believed that this measure
provided a clearer picture of how the stock market impacts economic growth (op.cit.).
Samples of time series of data taken from the Nigerian economic sector
comprised real gross domestic product, stock market development, foreign direct
investment, trade openness, inflation, and banking sector development. The study found
there was proof that the present value of economic growth resulted in disequilibrium
from previous indicators of real gross domestic product, stock market development,
foreign direct investment, trade openness, inflation, and banking sector development in
the long run. The study suggested that policymakers in Nigeria should focus on
promoting the development of the stock market, foreign direct investment, trade openness,
and banking sector development to stimulate economic development. Further studies
should be made in the future to confirm the findings of the study (op.cit.).
Based on the study of Soumare & Tchana (2015) of the World Bank, found
through empirical data showed bidirectional causality between foreign direct investment
and stock market development indicators, although for the banking sector the relationship
was ambiguous and not conclusive. It was recommended that further studies be made in
these countries to update and confirm the findings of this study.
The study of Wan & Hsu (2006) investigated the relationship between financial
development and the source of growth for three Asian economies, namely, Taiwan,
Korea, and Japan. Particularly, the paper focus on the role of financial development and
structure (including banking and stock markets), monetary and financial policies, as well
as the degree of international capital mobility in the economic growth processes.
Employing the generalized method of moments (GMM) and principal component
analysis, the study found that high investment had highly increased the economic growth
in Japan, Taiwan, and Korea. The growth of real export had benefited Taiwan and Korea.
Moreover, the increment in financial aggregates had a positive impact on Taiwan's
economy. However, financial aggregates had a detrimental effect on other countries. (The
development of the stock market had positive effects on Taiwan's economic growth. As
such, the economy of Taiwan experienced minimal negative effects from the Asian
financial crisis. Finally, after the deregulation of foreign exchange, capital outflows
harmed Taiwan, Korea, and Japan although these negative effects were insignificant.
This study was important and relevant to these countries since these countries
need empirical data and findings for policy formulation regarding financial development
and economic growth in these countries. Employing the generalized method of moments
(GMM) and principal component analysis, the study utilized data during the Asian
financial crisis particularly on the level of investments, GDP, export growth, and
financial aggregates in the financial system of these three economies (op.cit.).
The study found that high investment had highly increased the economic growth
in Japan, Taiwan, and Korea. In addition, the growth of real export had benefited Taiwan
and Korea. Moreover, the increment in financial aggregates had a positive impact on
Taiwan's economy while it was detrimental to the other countries. The development of
the stock market had positive effects on Taiwan's economic growth. As such, the
economy of Taiwan experienced minimal negative effects from the Asian financial crisis.
Finally, after the deregulation of foreign exchange, capital outflows hurt Taiwan, Korea,
and Japan although these negative effects were insignificant. Further studies should be
done in the future to update and confirm the findings of this study (op.cit.).
State Theory and Institutional Economics Theory
The effect of institutions such as the state on economic performance according to
Yoshihara(2004):
Institutions define the incentives and penalties for economic activities. For
example, an effectively enforced tax law determines how much one can retain
his earning and how much he has to pay to the government. If the rate is too
high, it is discouraging for private initiatives, in particular risk-taking. If tax
law is enforced with a great deal of discretion, there may be incentives for
cultivating relations with politicians and bureaucrats. If such activity becomes
important for business, national productivity suffers (Yoshihara, 2004, p.6).
Thus, governments as an institution can make things easier for businessmen by
enforcing taxes that are affordable and reasonable and which promotes them to do
business in the countryby giving reasonable rates. As such, productivity can be affected if
the policy on taxes and other factors is not right.
In addition, Yoshihara (2004) further argued:
Institutions determine the degree of economic freedom. How free is it to

import goods and services from abroad? How free is it to invest? Does a
foreign investor enjoy the same freedom, or if he does not, to what extent
is his investment restricted? Is one discriminated against based on
ethnicity? If so, to what extent? Is it free to start a business in any area? Or
if it is not, what areas are not free, or to what extent is freedom restricted.
Institutions answer thesequestions (Yoshihara, 2004, p.6).
As such, the degree of economic freedom is also an important factor for businessmen
since ifthere were many restrictions then this can affect their productivity.
New Growth Theory
According to Cortright (2001), institutions were important in shaping
development particularlythe increase in knowledge-based economies. As he argued:
History, institutions, and geography all shape the development of

knowledge-based economies. History matters because increasing returns
generate positive feedbacks that tend to cause economies to ―lock in‖ to
particular technologies and locations. Development is in part chaotic
because small events at critical times can have persistent, long-term
impacts on patterns of economic activity. Institutions matter because they
shape the environment for the production and employment of new
knowledge. Societies that generate and tolerate new ideas, and that
continuously adapt to changing economic and technological circumstances
are a precondition to sustained economic growth. Geography matters
because knowledge doesn‘t move frictionlessly among economic actors.
Important parts of knowledge are tacit and embedded in the routines of
individuals and organizations in different places (Cortright, 2001, p. ii).
In addition, Cortright (2001) views the new growth theory as one that should
emphasize new knowledge and that the economy should grow because of increasing
knowledge. He further argued:
New Growth Theory emphasizes that economic growth results from the
increasing returns associated with new knowledge. Knowledge has
different properties than other economic goods(being non-rival, and partly
excludable). The ability to grow the economy by increasing knowledge
rather than labor or capital creates opportunities for nearly boundless
growth (Cortright, 2001, p. ii)
. Thus, the economic development of a country can be supported by increasing the
quality ofhuman capital, and promoting new knowledge is an important factor in it.
Market Failures and the Role of Government
Markets sometimes fail because of certain structural defects in the economy. As
such, the government intervenes to save (McConnell, 1969) the economy from further
damage. A recent example is what happened here in the United States financial markets
wherein the big financial institutions such as banks began to crumble and were
threatening to affect the whole domestic economy as well as globally. Thus, the Bush
administration intervened and issued a multibillion-dollar bailout.
The Weberian State Theory
Migdal (1985) argued that a strong state was the key to promoting socio-
economic development. However, a weak state would have difficulty in achieving it. In
the same way, Skocpol (1985) also supported Migdal (1985) from the Weberian
perspective.
For Migdal (1985) it was clear that only a strong state can be effective in
transforming society, on the other hand, a weak state was ineffective, and in a sense, it
had no relative autonomy to effect much-needed change in a given country. In the same
way, Skocpol (1985) argued similarly with Migdal ((1985) Furthermore, one may then
explore the capacities of states to implement official goals despite the actual or potential
opposition of powerful social groups or in the face of recalcitrant socio-economic
circumstances (Skocpol, 1985). The predatory state was one that exploits the country’s
resources for the good of a few and not for the well-being of the majority (Evans cited
Zaire as a classic example of such a state) while the developmental states were those that
utilized the surplus of society for the improvement of its constituents.
Weberian State theory was also the framework of Hutchcroft (1994) and he
coined this as the Patrimonial Theory of the Philippine State wherein oligarchs and
cronies influenced the banks and the Philippine financial system through favored loans.
Although he was a foreigner, his object of study was the Philippine weak state influenced
by particularistic interests which did not make the Philippine state autonomous from the
elite and cronies which were favored by the government to acquire loans and authority
such as a license to operate a bank. For further discussion on the Philippine state, read the
section on local studies.
A focus on patrimonial aspects of the state, it can be argued promotes a clearer
understanding of important characteristics of the Philippine political economy, and
highlights critical obstacles to the development of more advanced forms of capitalism. As
Weber wrote, "the patrimonial state lacks the political and procedural predictability.
indispensable for capitalist development, which is provided by the rational rules of
modern bureaucratic administration. In employing the patrimonial framework, however,
it is important not to obscure four critical differences between the postcolonial
Philippines and the economies, societies, and polities analyzed by Weber many decades
ago. (Hutchcroft, 1998 p.69).
Even though researchers of political economy in the third world are confronted with
altogether different sorts of state foundations and industrialist frameworks, there is
regularly a propensity to overlook or disregard such changes to accomplish more
equivalent correlations between cross-line cases. The Weberian investigation gives the
important remedies, both because it features the huge contrasts that exist, and because it
focuses on the need to painstakingly examine the political establishments on which
different entrepreneur frameworks are based. All along, this work has contended that the
contrasts between entrepreneur frameworks cannot be perceived without analyzing the
relative benefits of state organizations and business interests and the idea of the state.
Albeit current examination cannot completely see all entrepreneur changes in these two
measurements, it endeavors to expand the extent of the investigation to the typical free
enterprise and statist continuum. As referenced above, the continuum does not
completely depict many creating industrialist monetary frameworks. In rundown,
by embracing Weber's examination, we can be able to examine various state apparatuses
to comprehend these critical contrasts between nations.
For explaining purposes, it very well might be helpful to show the two components
of industrialist changes in a straightforward manner. For heuristic purposes, it is perhaps
useful to display the two dimensions of capitalist variation on a simple matrix,
understanding that a) both axes represent continua along which capitalist systems can be
placed, and b) despite the presence of lines separating the different types of polities and
capitalist systems, there is, in reality, no clear demarcation among categories. On the
upper portion of the matrix one finds the two major types of production- oriented
capitalism, and on the lower portion of the matrix are the two major types of rent
capitalism. The horizontal axis, it is important to note, is not a measure of state autonomy.
Because patrimonial states by definition lack a clear separation between the private and
the official spheres, they cannot be considered autonomous.
By focusing on cross-national differences such as those found in the typology, it is
possible to understand better why rent-seeking behavior predominates in some settings,
yet is far more constrained in others. Economists who theorize about rent-seeking, not
surprisingly, generally confine their discussions to micro-level behavior within "the rent-
seeking society." and have very little to say about the state structures in which this
behavior most thrives. To the extent that rent-seeking theorists do examine cross-
national differences, they tend to make the mistake of presuming that the degree of rent-
seeking is dependent on one simple variable: the more government intervention in the
economy, the more rent-seeking. As Buchanan writes, "Rent-seeking activity is directly
related to the scope and range of governmental activity in the economy and the relative
size of the public sector.
If one were to rely on this framework, it would be hard to fathom how some cases of
government intervention have so effectively guided the process of economic
transformation (as in the upper left-hand corner of the matrix).
Figure 2a Hutchcroft Heuristic Typology of Capitalist Systems
State)
Source: Booty Capitalism by Paul Hutchcroft (1998)
the matrix one finds the two major types of production- oriented capitalism, and on the
lower portion of the matrix are the two major types of rent capitalism. The horizontal axis,
it is important to note, is not a measure of state autonomy. Because patrimonial states by

definition lack a clear separation between the private and the official spheres, they cannot
be considered autonomous.
By focusing on cross-national differences such as those found in the typology, it is
possible to understand better why rent-seeking behavior predominates in some settings,
yet is far more constrained in others. Economists who theorize about rent-seeking, not
surprisingly, generally confine their discussions to micro-level behavior within "the rent-
seeking society." and have very little to say about the state structures in which this
behavior most thrives. To the extent that rent-seeking theorists do examine cross-
national differences, they tend to make the mistake of presuming that the degree of rent-
seeking is dependent on one simple variable: the more government intervention in the
economy, the more rent-seeking (Hutchcroft, 1998 pp. 99-102).
A focus on patrimonial aspects of the state, I argue, promotes

a clearer understanding of important characteristics of the
Philippine political economy, and highlights critical obstacles to
the development of more advanced forms of capitalism. As Weber
wrote, "the patrimonial state lacks the political and procedural
predictability. indispensable for capitalist development, which is
provided by the rational rules of modern bureaucratic
administration. In employing the patrimonial framework, however,
it is important not to obscure four critical differences between the
postcolonial Philippines and the economies, societies, and polities
analyzed by Weber many decades ago (Hutchcroft, 1998 pp. 69).
Thus, in the aspect of the Philippine state, Hutchcroft had hypothesized that the
Philippines is a patrimonial state that is not autonomous from certain affluent classes or a
particularistic class.
Weberian State and Financial Institutions
According to Deeg (1992), the capacity of the German Banks to influence the
decisions of non-financial firms and coordinate the activities of the industry is
significantly more circumscribed than was widely assumed in the comparative political
economy literature. The weakening influence of the banks over industry is the result of
several factors: the growing competition since the late 1960s between commercial,
cooperative, and public savings banks; the growing financial independence of large non-
financial firms; the increasing importance of small and medium-sized firms as customers
group for the banks which had favored savings and cooperative banks as sources of
industrial finance; and the growth of state economic intervention, especially by the
federal states. The institutional role of the banking system in the German political
economy was increasingly better characterized as one of information mediation. In this
role banks supply firms, especially small and medium-sized firms, with an ever-wider
range of non-financial information and services. The banks and the state must be
understood as increasingly complementary, not an alternative institution for industrial
policy-making.
Deeg further argued that the state played a crucial role in promoting the
competitiveness of local and regional savings and cooperative banks partly to limit the
economic power of the large commercial banks. Strong competition among the three
banking groups inhibits banks' influence over the industry and fosters the growth of their
information mediation role. His study also showed the changing role of the banks in the
economy and the growing importance of sub-national institutions, including governments,
in promoting the economic adaptation of small and medium-sized firms.

On the other hand, Ahmed (1990) argued that the contribution of Islamic banks
in financing productive projects in development was minimal. The attitude of the
Islamic bank's management, state policies, and the structural rigidities characterizing
the Sudanese economy contributed to this dismal performance. His study also showed
that the financial facilities provided by the commercial banks, and the pattern of
allocating these facilities provide evidence that smaller firms in Sudan are at a
disadvantage in terms of type, volume, and conditions of financing. Thus, commercial
banks contributed partly to the smaller business finance gap in Sudan. Banks have been
highly security-conscious and profit-oriented.
Furthermore, Todaro (1985) argued that the role of the state in developed
countries through monetary and financial policy caused a major impact to expand
economic activity. Financial resources are continuously flowing in and out of savings
banks, commercial banks, and other nationally controlled public and private financial
intermediaries with a minimum of interference (Todaro 1985, pp. 502-503).
Thus, the orientation of foreign bank branches in developing countries was
outward in orientation and not focused on the benefit of domestic economic activities.
In terms of the state’s autonomy in banking as important, Harris (1990), contended
that successful states in Asia and Latin America control or mostly own the banks in
their countries. He wrote:
As in South Korea and Taiwan, the control of credit gave great power to the
Brazilian. At its peak, two-thirds of all loans were made by the state-controlled
banks (and 40 percent by the giant Banco do Brasil, the assets of which were
equal to the combined assets of the top twenty private banks. The expropriation
of public spending and activities was also the key factor in sustaining high
domestic demand…(Harris 1990, p. 84).
The control and ownership of banks in South Korea, Taiwan, Brazil, and other Latin
American countries by the state played a crucial role in the socio-economic development
of these countries.
The Neo Marxist Theory
Frank’s (1967) approach to development was different from Rostow's in the sense
that instead of taking society as a unit of analysis, he saw national economies as structural
elements in a global capitalist system. It was this system, not individual societies, which
was the necessary unit of analysis. Development along metropolitan lines was precisely
not possible for satellites, given their subordinate position in the system. The structuralist
theory of Furtado (1976) was also formulated based on the underdevelopment experience
in Latin America, however, his theories differ from Frank's although his theory was also
considered neo-Marxist, he considered that the major cause of underdevelopment in Latin
America was the unequal distribution of income and monopolies. Furtado considered
these factors as blocks to development. Frank believed in internal generation and was
against any form of external support such as foreign aid or loan and he believed that
internal generation can avoid sterilization and thereby promote sustainable economic
development by being independent of the core countries.
The State and Housing Finance
The study of Ebekozien (2020) found that state policy impacts social housing in
Southeast Asia. The survey of these approaches within the region is conceivably not
however satisfactory because of the gap in housing demand-supply in their respective
states. This survey assessed the state arrangement in low-cost housing (LCH) in the
region. Design/methodology/approach was through an electronic look (ScienceDirect,

Scopus, Web of Science, and Google Researcher) was conducted utilizing the taking after
look terms: “Low-Cost Lodging arrangement in Southeast Asia.” Reference lists of
distinguished were filtered and distributed between 1991 and 2020 that centered either on
the locale or nation inside the locale were chosen. An independent analyst extricated data
employing an institutionalized framework (op.cit.).
The findings of the study were that LCH creating nations encounter,
encumbrances, and measures to moderate LCH demand-supply hole in Southeast Asia
were the issues tended to from the surveyed. Discoveries from the study demonstrated
that the level of remiss state arrangement and authorization of LCH changes over nations.
Findings and proposals of this paper were based on efficiently surveyed writing but do
not compromise the vigor concerning state approach in low-cost housing arrangement in
Southeast Asian creating nations. In this way, the exploratory successive blended
strategies approach had been suggested as a portion of the suggestions for future research
(op. cit.).
According to Yap (2015) since the late 1980s, the UN-Habitat has advanced an
empowering methodology for its global goal of satisfactory housing for all. The
procedure fights that markets ought to be the primary housing conveyance component
which the open sector’s part is to introduce incentives and encourage housing activities
by other on-screen characters, through associations of local government, the private
segment, and non-governmental and community-based organizations (NGOs and CBOs).
The methodology acknowledged the impediments of the market for housing the destitute
and stresses government to recognize and upgrade informal settlements and to create
imaginative approaches to low-income In recent times, most governments in Asia to

follow the “enabling state” framework because it has demonstrated to be viable in
conveying satisfactory housing to expansive segments of the urban population. The
procedure was not on confined activity, but the portion of a broader plan of national and
worldwide promotion of liberalization which had brought quick financial development in
Asia and an extension of its urban center lesson. Without financial development, the
enabling strategy may not have been as viable. However, millions of urban destitute
remain without satisfactory housing despite economic advancements (op. cit.).
The research written by Whitehead & Tang (2019) distinguished three models of
reasonable housing conveyance utilized in Asia: 1 Open sector-led: solid open
intercession in reasonable housing supply with a well-developed monetary framework
(Hong Kong, Singapore, South Korea). This study was central to the high-quality
arrangement of reasonable housing in Hong Kong and Singapore. Public mediation
moreover ruled the position in South Korea for decades after the war. Be that as it may,
in later times there had been a declining part for South Korea’s central government. 2
Private sector-led: strong private segment inclusion for reasonable housing supply, with a
created budgetary framework for both developers and customers. This bunch includes
China, Japan, Malaysia, and Thailand, all of whom have (or, within the case of Japan,
had) significant reasonable housing approaches. China is atypical in this bunch since it
has government-owned land, but private players overwhelmed housing arrangements and
allotment in all four countries. 3) Informal delivery model: dominated by informal
housing systems and underdeveloped financial systems, even though there were some
government policies in place. This group included India, Indonesia, Pakistan, the
Philippines, and Vietnam, as well as other countries not included in the study (such as
Bangladesh). Overall, owner-occupation is seen as the long-term goal throughout Asia,
even where governments have a history of direct involvement in land allocation and
housing investment. Again, the framework was institutional and economic orientated in
its methodology (Whitehead & Tang, 2019).
Local Studies
Temario Rivera (1994) examined the historical role of the state in the Philippines
from 1950 to 1986. Rivera argued that the Philippine state was not autonomous from the
pre-colonial period up to the Marcos government since the power elites were influencing
state policy-making in favor of their vested interests.
This lack of autonomy was not only internal (influence of the elites) but also
external with the state being pressured and influenced by the United States indirectly
through the Word Bank/International Monetary Fund loans which were given with
conditionalities as exemplified by the Structural Adjustment Loans (SAL) which
influenced the economic policies of the country to open up to the outside world and in the
restructuring of the Financial System which suited the needs of American multinational
corporations. In short, these loans, and policies led to huge bad debts which disrupted the
government’s budget for social housing and to further concentration of the banking
industry.
According to Villacorta (1994), the problem of the Philippine state was that it
cannot separate itself from the elite. The dominance of this ruling class supported the
view that the state is not autonomous in a capitalist system. Similarly, Buendia (1993)
concluded that the political and economic institutions in the Philippines were both weak
in the sense that the latter dominates over the former. This was further compounded by
post-colonial influences in our state and economic policies which disrupted the country’s
socio-economic development.
Simbulan’s 1965 dissertation listed 169 family dynasties, found in every province
and in Manila that produced 584 public officials, or an average of 4.5 officials per family.
These officials included seven presidents, two vice-presidents, 15 cabinet members, 42
senators, and 127 representatives, and 10 justices of the Supreme Court. The remainder
were provincial governors, ambassadors, ministers, generals, and mayors (Simbulan
1965).
Even after an uprising two decades after the study of Simbulan, Gutierrez (1992)
found out that many of the families in Simbulan’s study remain in control of political and
economic power. Over the years, these families had grown in size and expanded their
following and many have entrenched their economic interests.
Wolters in his study attempted to explain the political elite about the Philippine state.
He concluded that the Philippine state which emerged during the late Spanish and early
American colonial periods was characterized by a limited degree of centralization and a
weak state apparatus. The landowning elite in the provinces, which had an independent
basis of power in their landholdings, prevented the development of a strong central state
(Wolters 1983).
According to Wolters (1983), the weakness of the state was evident in the fact that
the government did not have a monopoly on taxation or the use of violence. As such, the
state or government have had to forge with local elites who were so powerful and
influential they could ignore government orders.

As regards the powerful sugar bloc which controlled the state, McCoy (1980)
pointed to the fact that American colonial authorities set up the Philippine National Bank
(PNB) in 1916 for the sole purpose of providing credit to the sugar industry. PNB had
always been a sugar bank up to the early 1980s. His study on the industry’s political
influence on the nation noted that although sugar lands were only 6.5 percent of the
agricultural labor force, the sugar industry was the most heavily capitalized of all primary
industries receiving three times the government banking credit for rice and coconut
combined (McCoy 1980, p. 51).
Hutchcroft (1991) argued that this elitist and patrimonial aspect of Philippine
politics were entrenched after the World War 11 period because: (1) personal contacts
became even more important for entrance into the central bureaucracy; (2) patrons, who
historically relied on their local resources, found expanded opportunities in enriching
themselves through the bureaucracy. This did not diminish the power of local elites, but
merely increased the role of state resources within long-standing patron-client
relationships; and (3) as the oligarchy diversified its economic holding beyond
agriculture to include commerce, manufacturing, and finance, access to state machinery
become more important than ever for the creation of wealth (1991, pp. 414-450).
As the other theories of the Philippine State did touch on state autonomy
particularly as regards the local ruling class and foreign actors, it did not undertake a
comprehensive and updated study of the relation of the state and the housing finance
sector. This study argued that the path to sustainable development is taking a hard look
into the nature of the Philippine state and its efficacy in financing the social housing
program vis-à-vis a favored particularistic class with particularistic demands in the
housing sector.
Rivera (1994) in his study also recognized the existence of a cartel in the banking
system where a few banks controlled the financial system and wherein there was a web of
a complex between the industrial and banking sector. He wrote: “ Not only do the landed
families dominate the manufacturing sector; they also control the leading private
commercial banks in the country. Of the top 10 local private banks in 1986, six, including
the largest private banks in 1986, including the oldest and largest, the Bank of the
Philippine Islands, was controlled by landed capitalist families (Rivera, 1994, p.50).
Government Financial Institutions
Rivera also mentioned in his study that the affluent class as represented by local
manufacturers availed of low-interest, long-term loans offered by government financial
institutions (GFIs) and these had proven to be an indispensable source of capital for them.
He wrote: “Both the landed and non-landed segments of the manufacturing class,
including Chinese-Filipino capitalists, have availed themselves of this important resource.
In particular, some textile, cement, fertilizer, and pulp and paper companies received
substantial loans from GFIs like the Development Bank of the Philippines (DBP), the
Philippine National Bank (PNB), the National Investment and Development Corporation
(NIDC), and the Government Service Insurance System (GSIS) (Rivera, 1994, pp, 57-
58).”
Rivera further explained the abuse of the use of GFIs both by the state and by the
aristocracy:
“While there exists a long tradition of borrowing from GFIs, it was grossly
abused during the Marcos regime through cronyism and the state practice of
guaranteeing loans incurred by private corporations, particularly of the
cronies, many of whom later defaulted on their payments (Rivera 1994, p.
58).”
For instance, by 1992, the Philippine National Bank (PNB) had loaned over 60
percent of its equity to a single corporation, the crony-controlled Construction, and
Development Corporation of the Philippines (CDCP), and was later forced to convert its
loans into company equity upon default by CDCP on its outstanding debts (Rivera, 1994,
p.58).
GSIS Housing Financial Institution
In the case of a major housing financial institution which is the Government Service
Insurance System (GSIS), it was also the source of funds for the pet projects of Marcos
and his cronies. Manapat (1991) writes: “The majority of investments and loans of the
GSIS in 1971 were policy, salary, and housing loans to GSIS members. These loans
represented 82% of GSIS investments. These loans to members, however, had
dramatically declined by 1980. Housing loans for members, for example, were phased
out. But during the same period, loans and investments of the GSIS in Marcos-connected
companies and Imelda-inspired projects rose to USD843 million or 65% of the USD 1.3
billion the GSIS earned as income by the end of 1980. The CDCP conglomerate of
Cuenca was a constant recipient of GSIS money, from the start of the construction boom
until the time that this conglomerate collapsed (Manapat 1991, p. 372).
Again, GSIS money, not available for housing for almost two-thirds of the
population of the Philippines, was used to fatten the coffers of the Marcos cronies.
Government Financial Institutions (GFIs) were the favorite sources of low-interest and
long-term loans by a particular class or group which had access to the state machinery.
Philippine Social Housing and Housing Finance
According to Llanto et.al. (1998) of the Philippine Institute of Development
Studies (PIDS), the real problem in Philippine housing was not on building more houses
since it will be a gigantic task for the government to provide such a massive budget for
the poor but access to housing. His methodology was to look into the government
subsidies in providing the poor access to housing. and concluded that the beneficiaries of
the housing subsidies were not the poor but those who belong to the upper bracket
(Llanto et.al.1998)
In a study by Rebullida (2012) about housing, she looked
at the flow of control relations between the state and respectful society on the urban
poor's lodging needs to give the political and administrative system that developed after
the ouster of Marcos in 1986 and the section of the 1987 Philippine Constitution. In this
period, the urban destitute progressively molded their sectoral character around
the characterizing issues of lodging, need of security of arrival residency, and destitution.
According to Rebullida (2016), by organizing and mobilizing community-based
and sectoral organizations, intervening by joined together NGOs, and the urban
community to push the government to give access to the urban poor One social housing
plot grasped by the government, the Community Mortgage Program, diagrams this
fundamental and plan interface and co-sharing of commitments of three first accomplices:
the national government (Rebullida, 2012). According to Valte (n.d.) inside the
Philippines, the definition of social lodging organization, for the most part, alters to that
of complementary and multilateral teach, i.e., the work out of political, financial, and
definitive specialist to supervise a nation's issues and the commerce of distinctive
techniques to communicate control and manage open resources and issues As a change
objective, good administration is generally characterized by its traits or markers, such as
responsibility, straightforwardness, and citizen cooperation in approach and decision-
organization is generally characterized by its traits or markers. (op. cit.).
However great administration as a change objective relates to the part of the state
is still being debated by different partners. The need for agreement on how the state ought
to conduct itself tends to drag the administration handle in clashing bearings. Where the
state is in a weak position vis-à-vis other performing artists, it regularly backtracks on
its acknowledged goals. The net result of the government's housing subsidy programs
was that "the private marketplace for housing [could] not flourish given a flawed
incentive structure that motivates participation only because the government is prepared
to assume the full burden and risk of those housing programs (Llanto et.al., 1998).”
The methodology of Valte was based on research through documents and
concluded that the Philippine state assumed the "enabling" role, whose definition was
distorted by the National Shelter Program when the government ultimately became the
provider of funds to "enable" others to build and sell houses. This essentially means
creating the policy and regulatory environment that will allow marginalized sectors to
realize their right to decent shelter (op. cit.).
According to Arcilla (2019), the need for affordability could be a persistent issue
in socialized housing programs in the Philippines. Affordability could be a critical
component of the correct to satisfactory housing. Without access to reasonable housing,

the destitute are constrained to make homes in unsafe spaces and slums. This
arrangement brief handles the issue of the reasonableness of socialized housing inside a
human rights framework. It especially highlights the issue of affordable housing for the
poorest 30% of Filipino families. It moreover marks the challenges and limits of the
prevailing approach to socialized housing in the light of the government that administer
socialized housing for more than 25 years, The creation of the Office of the Department
of Human Settlements and Urban Development (DHSUD), and efforts to more
government intervention. The current overwhelming approach to socialized housing
through the private sector barely addresses the reasonableness issues as these centers on
lowering prices. Moreover, the methodology of the study was again economics-orientated
and concluded with a human rights framework that suggested decentralizing social
housing to the LGUs. (Arcilla, 2019).
Synthesis
As the economic development theories relied on capital and money supply in
economic growth, economic development was much more as it needs other variables
such as political and sociological factors to grow. The structuralist theory of Furtado
(1976) also was formulated based on the underdevelopment experience in Latin America,
however, his theories differ from Frank's although his theory was also considered neo-
Marxist, he considered that the major cause of underdevelopment in Latin America was
the unequal distribution of income and monopolies. Furtado considered these factors as
blocks to development. Frank believed in internal generation and was against any form of
external support such as foreign aid or loan and he believed that internal generation can
promote sustainable economic development by being independent of the core countries.

Migdal (1985), argued that a strong state was the key to promoting socio-economic
development. However, a weak state would have difficulty in achieving it. In the same
way, Skocpol (1985) also supported Migdal (1985) from the Weberian perspective.
Finally, Paul Hutchcroft (1994) predatory oligarchy of the Philippine financial
system theory, or what he also coined as “booty capitalism,” utilized also a Weberian
approach in terms of promoting economic development. However, argued that the
weakness and autonomy of the State were due to patrimonialism and as such
particularistic interests aside from oligarch interests was a major stumbling block in the
economy's continued growth. This was also supported by the study of Rivera (1994). As
he argued that the Philippine state was not autonomous from the precolonial period up to
the Marcos government since the power elites were influencing state policy-making in
favor of their vested interests. Further, this was also supported by Villacorta (1994) that
the root of the weakness of the Philippine state is its incapacity to sever itself from the
interests of the affluent class. The dominance of this ruling class supported the view that
the state is not autonomous in a capitalist system. Buendia concluded that the political
and economic institutions in the Philippines were both weak in the sense that the latter
dominates over the former. This was further compounded by post-colonial influences in
our state and economic policies which disrupted the country’s socio-economic
development.
including Chinese-Filipino capitalists, have availed themselves of this important resource.
In particular, several textile, cement, fertilizer, and pulp and paper companies received
(NIDC), and the Government Service Insurance System (GSIS). However, the framework
of Buendia was neo-Marxist while Hutchcroft’s framework was Weberian and was more
concerned with State and Patrimonial Relations that becomes a weakness for socio-
economic development particularly in the banking system.
The approaches of Buendia, Rivera, and Villacorta were influenced by
dependency and neo-Marxist frameworks.
In terms of social housing and housing finance, the study of Ebekozien (2020)
found that state policy impacts social housing in Southeast Asia. The survey of these
approaches within the region is conceivably not however satisfactory because of the gap
in housing demand-supply in their respective states. This survey assessed the state
arrangement in low-cost housing (LCH) in the region. Design/methodology/approach was
through an electronic look (ScienceDirect, Scopus, Web of Science, and Google
Researcher) was conducted utilizing the taking after look terms: “Low-Cost Lodging
arrangement in Southeast Asia.” Reference lists of distinguished were filtered and
distributed between 1991 and 2020 that centered either on the locale or nation inside the
locale were chosen. An independent analyst extricated data employing an
institutionalized framework (op.cit.).
However, the institutional economics framework that was used in the study was
different from the Weberian framework on Capitalist development that Hutchcroft

utilized in comparing nation-states. Moreover, Ebekozien's (2020) framework was more
economics orientated and studied more on the policy impact of nation-states on social
housing but did not examine why these states failed or succeed in their housing programs
about the kind of framework that Hutchcroft classified from Weber’s theory of the state.
The methodology of Yap (2015) acknowledged the impediments of the market for
housing the destitute and stresses government to recognize and upgrade informal
settlements and to create imaginative approaches to low-income earners in recent times,
most governments in Asia followed the “enabling state” framework because it had
demonstrated to be viable in conveying satisfactory housing to expansive segments of the
urban population. The procedure was not on confined activity, but the portion of a
broader plan of national and worldwide promotion of liberalization which had brought
quick financial development in Asia and an extension of its urban center lesson. Without
financial development, the enabling strategy may not have been as viable. However,
millions of urban destitute remain without satisfactory housing despite economic
advancements (op. cit.).
The research written by Whitehead & Tang (2019) distinguished three models of
reasonable housing conveyance utilized in Asia: 1 Public sector-led: strong intervention
of states in providing affordable housing supply with a well-developed monetary
framework (Hong Kong, Singapore, South Korea). This study was central to the high-
quality arrangement of reasonable housing in Hong Kong and Singapore. Public
mediation moreover ruled the position in South Korea for decades after the war. Be that
as it may, in later times there had been a declining part for South Korea’s central
government. 2 Private sector-led: strong private segment inclusion for reasonable housing
supply, with a created budgetary framework for both developers and customers. This
bunch includes China, Japan, Malaysia, and Thailand, all of whom have (or, within the
case of Japan, had) significant reasonable housing approaches. China is atypical in this
bunch since it has government-owned land, but private players overwhelmed housing
arrangements and allotment in all four countries. 3) Informal delivery model: dominated
by informal housing systems and underdeveloped financial systems, even though there
were some government policies in place. This group included India, Indonesia, Pakistan,
the Philippines, and Vietnam, as well as other countries not included in the study (such as
Bangladesh).
According to Llanto et.al. (1998) of the Philippine Institute of Development
Studies (PIDS), the real problem in Philippine housing was not on building more houses
since it will be a gigantic task for the government to provide such a massive budget for
the poor but access to housing. His methodology was to look into the government
subsidies in providing the poor access to housing. and concluded that the beneficiaries
of the housing subsidies were not the poor but those who belong to the upper bracket
(Llanto et.al.1998)
According to Rebullida (2016), by organizing and mobilizing community-based
and sectoral organizations, intervening by joined together NGOs, and the urban
community to push the government to give access to the urban poor One social housing
plot grasped by government, the Community Mortgage Program. Again, the framework
was “enabling the state” in the provision of social housing to the urban poor. The
methodology of Valte was based on research through documents and concluded that the
Philippine state assumed the "enabling" role, whose definition was distorted by the
National Shelter Program when the government ultimately became the provider of
funds to "enable" others to build and sell houses. According to Arcilla (2019), the need
for affordability could be a persistent issue in socialized housing programs in the
Philippines. Affordability could be a critical component of the correct to satisfactory
housing. Without access to reasonable housing, the destitute are constrained to make
homes in unsafe spaces and slums. This arrangement brief handles the issue of the
reasonableness of socialized housing inside a human rights framework.
However, the framework of Hutchcroft was based on Weber’s Patrimonial theory
of the state based on the efficacy of the bureaucracy, organization, and autonomy of the
state from certain classes or particularistic interests in promoting socio-economic
development. Thus, the researcher anchored this study on the theoretical lens or
theoretical framework of Hutchcroft (1994). Nevertheless, the research gap of the
framework of Hutchcroft (1994, 1998) is that his theory was more on the weak state in
the banking industry but this study is more on the weak state in Philippine social
housing finance. Whereas the focus of the work of Hutchcroft was the Philippine
Central Bank (Bangko Sentral ng Pilipinas), this study focuses on the GFIs
(Government Financial Institutions) led by HDMF.

Chapter Three
METHODOLOGY
Introduction
This chapter presents the methods to be employed in this study to answer
research questions. This chapter elaborates on the research methodology, data gathering
procedures, and analyses, as well as the framework to be applied.
Research Design
This study used the exploratory descriptive research design in determining the
nature of the Philippine State in pursuing to finance social housing. Furthermore, in
order
to answer the nature of the Philippine state in social housing finance, the researcher had to
rely on past researches and publications regarding the nature of the state in social
housing financing as there were no publications at all on the theory of the nature of the
state in housing finance. as can be differentiated from the banking system and the
patrimonial nature of the state of Hutchcroft (1994).
As such, since there were no previous studies as to the patrimonial nature of the
Philippine state in housing finance, the researcher utilized also the exploratory
descriptive
design by examining those actors that were able to benefit from favored loans despite the
fact that they had a poor payment record to the GFIs (Government Financial Institutions).
Moreover, documents and publications regarding the performance of building and
financing houses were examined to determine the strengths and weaknesses of their
performance. This was so because the researcher wanted to determine the social
stratifications of the houses built and financed and their implications to the nature of the
Philippine state. Also, other documents and publications regarding Philippine presidents
and their social and state relations had been examined as to their impact on housing
financial developments. Since it was an exploratory descriptive design, the picture
of the nature of the State cannot be conclusive since it only represented a part of it.
However, in terms of determining the accomplishments of the state in terms of
social houses built and financed, this had been answered conclusively by this study.
through examining historical data from 1987 to 2019.
Philosophical Stance
This study was anchored on the theory of Structural-Functionalism. The
structural-functional paradigm- credited largely to August Comte, Emile Durkheim, and Talcott-
Parsons– which adopts a macro (broad focus on structures that shape society as whole
view of society as a complex system whose parts work together to promote solidarity and
stability. Humans are believed to be able to thrive under these conditions. The focus is on
society as an entity that can flourish, and make things like unity, cohesiveness, stability,
and order fundamental necessities for social existence.
Chaos, instability, and alienation disrupt society’s functioning and are considered
undesirable (Durkheim, 1968).
Hempel’s methodology (Hempel, 1968, 1973) is based on the concept of
empirical
science which is very applicable particularly in the physical sciences. According
to this view:
“… all explanation is achieved ultimately by reference to causal or correlation

antecedents.
In the case of the fields of psychology and the social and historical disciplines according
to some, even in biology – the establishment of causal or correlation connections, while
desirable and important, is not sufficient. Proper understanding of the phenomena studied
in these fields is held require other types of explanation (Hempel,
1973: p. 179).”
As such, according to Hempel, one of the explanatory methods that have
been developed for this aim is that of functional analysis. This method of analysis has
somewhat found some problems in the area of social science or management because
whereas in physics, experimentation can be made in a laboratory, it is difficult to isolate
variables in the social sciences and form an experiment. Thus, the school of thought may
not be practical to use in the social sciences.
May Brodbeck’s article on “Methodological individualism: Definition and
Reduction”, (Brobbeck, 1968: pp. 280-304) somewhat supported Hempel’s approach of
scientific analysis as applied to sociological problems. As Brodbeck would argue that to
compare Indians who are red-skinned with Indians is disappearing. She opined that in the
former, every Indian is said to be red-skinned, while in the latter Indians as a
group is said to be disappearing, that is, diminishing in population.
As such, according to Brodbeck, when a property is attributed to a group
collectively so that the group itself is logically the subject of the proposition, rather than
distributive, in which case, every member of the group could logically be the subject of
the proposition, then we have a group property. There is no issue about the occurrence of
group properties.
Thus, Brodbeck had a point here in terms of defining and differentiating
individual properties from group properties. On the other hand, Emile Durkheim (1968:
pp. 245-254) contend that essentially individuals were and are born with existing social
structures which influence the individual.
As Durkheim argued:
“But in reality, there is in every society a certain group of

phenomena which may be differentiated from those studied by the other
natural sciences. When I fulfill my obligations as brother, husband, or
citizen, when I execute my contracts, I perform duties that are defined,
externally to myself and my acts, in law and custom. Even if they
conform to my sentiments and I feel their reality subjectively, such reality
is still objective, for I did not create them; merely inherited them through
my education. How many times it happens, moreover, that we are
ignorant of the details of the obligation’s incumbent upon us, and that to
acquaint ourselves with them we must consult the law and its authorized
interpreters! Similarly, the church member finds the beliefs and practices
of his religious life ready-made a birth; their existence before his own
implies their existence outside of himself (Durkheim, 1968: p. 245).”
As such, Durkheim emphasized the existence of social facts and properties that
already existed as a social structure that affected the behavior of individuals. Also,
these structures were outside or external to the individual.
In another school of thought, Ernest Gellner (1968: pp. 254-269) as written in his
essay entitled, Holism versus Individualism”, argued that certain situations encourage
disposition or balance between holism and individualism. As Gellner put it:
“To the individualist, his position appears as true that it barely

needs the confirmation of actually carried out eliminations, whilst, he
gleefully points out that in practice the holist can and does only approach
his institutions, etc., through what concrete people can do, which seems to
the individualists a practical demonstration and implicit confession of the
absurdity of holism. By contrast (and with neat symmetry) the holist sees
in the fact that the individualist continues to talk in holist terms a practical
demonstration of the unworkability of individualism, and he certainly not
consider the fact that he can only approach groups and individuals to be
something which he had implicitly denied and which could count against
him. Both sides find comfort in the actual practices of the opponent
(Gellner, 1968: p. 256).”
What is at issue here is the ontological status of the entities referred to by the
holistic terms. As the notion of ontological status is not clear as it might be in the debate
between holism versus individualism, Gellner pointed to something which is important to
a reductionist and which to him is an index of existence --- namely, causation.
Gellner further writes:
“He does not wish to allow the Whole could ever be a cause and to insist
that explanations which make it appear that it is can be translated into
others. That which is a mere construct cannot causally affect that which
“really exists”; this is, I suspect, the feeling of the individualist, the
reductionist. This is in conjunction with the truism that a whole is made up
of its parts, that nothing can happen to a whole without something
happening to either some at least of its parts or their mutual relations
(Gellner, 1968: p. 256).”
Thus, the holistic counter-argument works in reverse: if something (a) is a
causal factor (b) cannot be reduced, then in some sense, it really and independently exists.
Thus, Gellner called for a balance between holism and individualism. He argued
that not all things can be reduced to individualistic terms. On the other hand, not all things
can be explained in social or group terms.
In another perspective, Watkins (1968) does not exactly agree with Gellner
and even with Hempel. As he argued:
“I am not an advocate of mechanism but I have mentioned it

because I am an advocate of an analogous principle in social science, the
principle of methodological individualism. According to this principle,
the ultimate constituents of the social world are individual people who act
more or less appropriate in the light of their dispositions and
understanding of their situation. Every complex social situation,
institution, or event is the result of a particular configuration of
individuals, their dispositions, situations, beliefs, and physical resources,
and environment. There may be unfinished or halfway explanations of
such large-scale phenomena until we have deduced an account of their
statements about the dispositions, beliefs, resources, and inter-relations of
individuals. And just as the mechanism is contrasted with the organicist
idea of physical fields, so methodological individualism is contrasted with
sociological holism or organicism (Watkins, 1968: pp. 270-271).”
From holism’s point of view, social systems constitute ‘wholes’ in the sense that
some of the large-scale behavior is governed by macro-laws which are in essence
sociological in the sense they were ‘sui generis’ and not to be explained as just
regularities
or tendencies resulting from the interaction of individual behaviors. The behavior of
individuals according to sociological holism can be explained at least partly in terms of
such laws. An example of this sociological factor was the long-term cyclical wave in
economic life which was supposed to be self-propelling, uncontrollable, and
unexplainable
in terms of human activity.
Watkins argued that social tendencies are the product of human characteristics,
activities, and situations, of people’s ignorance and laziness as well as their knowledge
and ambition. He also mentioned that there are two areas where methodological
individualism does not work. The first is a probability situation where accidental and
unpredictable irregularities in human behavior have a fairly regular and predictable result.
The second kind of social phenomenon to which methodological individualism is
inapplicable is where some kind of physical connection between people’s nervous systems
short-circuits their intelligent control and causes automatic, and perhaps in some sense
appropriate bodily responses (Watkins, 1968).
The methodology of this study was anchored on sociological holism structural-
functionalism. It is the position of the researcher that social phenomena can be more
explained from a social systems point of view. Although it would be agreeable,
in a sense, collective individual behavior would form certain social tendencies (e.g., the
liquidity preference behavior of investors in the event of lower interest rates in the
financial system), most social phenomena could be explained in holistic forms such as
traditions, cultures, social stratification, laws, financial system, administrative, and
political structure. The study utilized the historical-structural and functional analysis of
the housing finance system, In conducting this historical study, on the one hand, the
researcher can neither manipulate norcontrol any of the variables. On the other hand,
there was no way the researcher can affect eventsof the past; what had happened had
happened. The researcher, however, applied scientific objectivity in attempting to
determine exactly what did happen.
Data Gathering Activities and Methods of Analysis
The study used primary data through the conduct of surveys to five hundred (500)
housing finance beneficiaries.
Under a qualitative study design, the researcher had done archival, document-
based research and analysis, and internet-based research, concentrating on primary and
secondary sources such as legislative documents, academic journals, research studies, and
media articles that involved the role of the State in policy formulation for socio-
economic development focusing on social house financing. In the case of the documents from
1987
to 1998, the researcher personally received the housing documents from HDMF and
HUDCC in Makati, Metro-Manila.
Interviews
In addition, the researcher conducted open but guided interviews with six (6)
senior staff of the HDMF and HUDCC but on the condition that the interview was
anonymous (see Interview Form and Interview Results in Appendix A and Appendix B).
Data Gathering Method
The data collection and gathering of this study were based on searches in the
internet since itis the only way to gather data worldwide. The data comes from the
websites of the following sources:
1. HUDEC
2. HDMF
3. The World Bank
4. Other Philippine Government Agencies
5. Journals, publications, and digital news.
Ensuring Research Quality
Accuracy
As depicted in the above table (Data Gathering Activities and Methods of
Analysis,
the accuracy of the study stems from the methods of the collection of data. Primary data
in the form of interviews will be gathered only from the key actors involved in social
house financing. As for the secondary data, documents and statements will be collected
from reliable sources directly from HDMF and HUDCC. As for the quantitative method,
the data were accurate since these were taken from reliable sources on the internet. Most
of the data came from valid sources such as The World Bank, Asian Development
Bank, UnitedNations Development Programme, International Monetary Fund, HDMF
Reports, HUDCC, and other and Philippine Government Agencies.
Reliability
Reliability in development research was challenging. In the case of the qualitative

aspect of research, the researcher selected data and information from reliable sources. In
the case of the quantitative method of this study, reliable data were extracted from
reliable
sources.
Validity
While there are various methods to measure the validity of the study, this paper will
apply construct validity to measure the logical relationships among variables.
Ethics
Ethics is important in social research since students should be able to know
and feel thatthey are morally responsible in writing research. It is possible that students
can violate ethics in research and as such, they should be concerned with this as they
plan
their research as well during their contact with respondents. In the universality stance of
ethics, ethical precepts mustn't be violated and that research respondents should not be
treated as a means to an end. Thus, the researcher‘s right to know should be balanced
with the rights of the respondents such as their privacy, dignity
, and self-determination.
Furthermore, in writing a research project, all the respondents will be briefed about
the topicand its restrictions and assurance will be guaranteed in terms of verbal and
nonverbal information provided according to the Data Protection Act of 1998. It is
further important to be ethical in research in terms of reliability of data, its validity, and
generalizability as it is important in ethics about the truthfulness of the study.
Researchers are legally required for their data to be protected.
In the UK Data Protection Act of 1998, personal data must be: obtained for
specific, explicit,and lawful purposes and should not be further processed if these are
incompatible with those purposes. The data must be adequate, relevant, and not
excessive
about the objectives. The data must also be accurate and a generally updated
requirement is suspended in the caseof anonymized research data. This data must be
secured in a form that allows identification of data subjects for no longer than is
necessary
four ethical principles should be observed in research. Firstly, the researcher must avoid
harm to participants. Secondly, there must be informed consent from them.
Thirdly, the researcher must avoid invasion of their privacy. Fourthly, there must be the
avoidance of deception. Participants must be informed about the information that is
needed
for them to decide whether or not they wish to join in a study.
This information should be what the research is about and why it is being
undertaken. They should also be informed of who is funding the research. Information of
what is exactly the participant ‘s role in the study should be clear to avoid
misunderstanding. Privacy issues in research ethics are linked to anonymity and
confidentiality and this can be problematic in qualitative research wherein rich
contextual
is provided by participants. The respondents should be protected in terms of anonymity
in their comments in the interviews since their identities can easily be revealed if they are
not protected by the researcher. This can be done by not stating their names as well as
possibly the organization where they came from especially if there are only a few people
in the organization or department where they came from.

Chapter Four
PRESENTATION OF DATA, ANALYSIS, AND DISCUSSION
Part 1
Performance of the GFIs (Government Financial Institution in Financing Social
Housing - Corazon Aquino and Ramos Administration, 1987-1998
The Government Financial Institutions under the United Home Lending Program
were able to produce 91,858 houses from 1987 to 1992 during the Aquino administration.
The average production was 15,310 houses per year. The total loan granted for the same
period was 14.124billion pesos which averaged 2.354 billion pesos per year.
On the one hand, the Ramos administration from 1993 to 1998 posted a total of
263,939 houses built during the period. These averaged 43,990 houses per year which
were almost three times higher than the Aquino administration. Overall, a total of
355,798 houses were built under the United Home Lending Program from 1987 to 1998
which averaged 29,650 units per year built during the twelve years. Also, a total of
66.417 billion pesos of loans were granted during the same period.
Thus, the figures from 1987 to 1998 showed the performance of the Ramos
administration
in terms of the houses built and loans granted were much better than the Aquino
administration.
However, its efficacy of producing and financing social housing for the poor
versus
its plan wasstill below the level expected of a strong state.

The Ramos State and the Beginning of the Estrada State from 1993 to 1998
Planned Versus Actual Housing Units by Programs, 1993-1998
The planned Direct Housing Program output (see Table 1) by the United Home
Lending Program (UHLP) from 1993 to 1998 was 506,510 units but the actual
performance was only 263,939 units. These resulted in a shortage or gap versus a plan of
242,571 units or a staggering poor output which was 68 percent short of the plan.
Table 1 The Ramos State 1993 to 1997 and the Beginning of the Estrada State 1998
1993 to 1st Semester of 1998

Program Planne Actu Gap/Exc % to
dd al ess Plan
Direct Housing 506,51 263,9 -242,571 48

0 39
Indirect Housing 418,25 363,0 -55,254 13

4 00
Resettlements/C 315,38 175,0 -140,329 44

MP 8 59
Total 1,239,7 800,0 -439,700 35

02 02
Sources of Primary Data: HDMF, HUDCC
In terms of the Indirect Housing Program, the planned output was 418,254 units
but the actual performance output was only 363,000 units. The shortage or gap was
55,204 units or 13percent of the planned output. As far as the Resettlements/Community
The Mortgage Program (CMP) was concerned the planned output was only 175,061
units.
These resulted in a shortage or gap vis-à-vis the plan of 140,327 units or 44 percent
versus
the plan. In all the programs, the total planned output was 1,239,702 units but the actual
performance was 800,002 units. These showed a gap or shortage of 439,700 units or 35
percent versus the planned output.
Thus, overall, the state failed in terms of achieving its housing targets, and it
was very clear that the state was weak and ineffective in improving the social housing
needs
of millions of Filpinos.
The Ramos State 1993 to 1997 and the Beginning of the Estrada State 1998:
Housing Need, Planned Housing Units, and Actual Performance
The planned output for housing for 1993 was 118,713 units and the actual
average
of 133,333 units was higher by 14,620 units or 12 percent higher than the plan. However,
in 1994,the planned output of 147,176 units was not met because the actual performance
in terms of theactual average was only 133,333 units. These resulted in a shortage or gap
of 13,843 units or 9 percent versus the plan. Again, based on, the planned output for
1995 which was 214,591 units versus the actual performance average which was only
133,333 units showed a gap or shortage of 81,258 units. The shortage versus the plan
further increased from 9 percent in 1994 to 38 percent in 1995. In 1996, the shortage
between
the planned output of 234,000 units and average performance balloonedto 100,667 units
of 43 percent versus the plan.
From 1997 to 1998 the shortage increased much further to 46 percent, and 52
percent respectively. The gap versus the plan from 1993 to 1998 was 439,702 units based
on the planned output of 1,239,702 units and the actual performance which were only
800,000 units.Thus, the overall shortage in percent was 35 percent versus the plan.
Comparing these figures versus the housing need, the picture was much worst.
Based on a housing need of 3,724,000 units from 1993 to 1998, the annual average for
housing need was 620,666 units, as such, the gap or shortage versus the plan was much
wider. Comparing the average annual performance from 1993 to 1998 which was
133,333 units to the annual average housing need which was 620,666 units, the gap or
shortage
was a staggering 365 percent. In totality, for the same period, the actual performance
output which was 800,000 units were short by 2,924,000 units compared to the housing
need. As such, the state fell miserably versus its targets of providing houses for the poor
majority of its constituents. A strong or developmental state can achieve its targets and
plans for its peoplebut here in the Philippines, the state was weak and its failure was not
only minimal but staggering as the figures showed.
The Ramos State 1993 to 1997 and the Beginning of the Estrada State 1998
Planned Direct Housing Units Versus Actual Performance
The planned housing units by the United Home Lending Program or direct
housing program (see Table 2) for 1993 were 43,792 units but the actual performance for the
year
was only 13,002 units. This resulted in a shortage of 30,790 units. In 1994, the planned
housing units were supposed to be 54,651 units but the program only produced 23,450
units for the year resulting in a shortage of 31,201 units. In 1995, the planned housing units
to be produced were 85,442 units but the actual performance was only 34,171 units
resulting in a big shortage or gapof 51,271 units.
In 1996, the planned production of direct housing was supposed to be 103,612 units
but the program actually produced only 57,518 units. Again, these left a shortage of
46,094
units. In 1997, the planned output were only 74,342 units which left a gap or shortage of
31,271 units. In 1998, the planned output was supposed to be 34,275 units but the actual
output were only 7,261 units (data for the first semester of 1998). These resulted in a
shortage of 51,994 units.
Table 2 The Ramos State 1993 to 1997 and the Beginning of the Estrada State 1998:
Direct Housing Program, Planned Housing Units vs. Performance
Year Planned Actual Performance Gap
1993 43,792 13,002 -30,790
1994 54,651 23,450 -31,201
1995 85,442 34,171 -51,271
1996 103,612 57,518 -46,094
1997 105,613 74,342 -31,271
1998 113,400 61,456 -51,994

Total 506,510 263,939 -294,515
Sources of Primary Data: HUDCC, HDMF
Overall, from 1993 to 1998, the planned output for direct housing was supposed to
be 506,510 units. However, the actual performance was only 263,939 units for the same
period. These resulted in a shortage or gap of 294,515 units. Again, government money
intended for the housing needs of Filipinos was not available by almost one-half of its
target since the weak state did not have the political will to achieve its social housing
program.
Planned Housing Expenditure Versus Actual Housing Expenditures
The planned housing expenditure for 1993 (see Table 3) in the Direct Housing
Program or the United Home Lending Program (UHLP) was 10.06 billion pesos.
However,
the actual expenditure for the same year was 2.536 billion pesos which resulted
to huge gap or shortage of 7.524 billion versus the plan or 75 percent versus the planned
expenditure.
In 1994, the planned expenditure was 11.311 billion pesos but the actual
expenditure was only 4.72 billion pesos. These left a wide gap or shortage of 6.591
billion
pesos or 58 percent versus the plan. In 1995, the planned expenditure for the said
program
was 20.228 billion but the actual expenditure fell very short again with only 7.034 billion.
This resulted in another widegap which was 13.194 billion pesos or 65 percent short of
the plan. From 1996 to 1998 the comparison between planned the planned and actual
expenditures revealed the same story. The planned expenditure in 1996 was 21.871
billion
pesos but the actual expenditure was only13.586 billion pesos resulting in a wide
gap that was 38 percent short of the plan. In 1997, the planned expenditure was only
17.156 billion pesos. These left a big shortage or gap of 11.8 billion pesos or 41 percent
short of the plan. The worst year was in 1998 where only 7.261 billion pesos were
spent for this program compared to the 34.725 billion pesos of planned expenditure.
These left the highest shortage or gap of P27.464 billion or 79 percent shortof the plan.
In summary, the total planned expenditure for the period 1993 to 1998 was a
heavy shortage of 74.895 billion pesos or 59 percent short of the plan.

Comparative Analysis Between Planned and Actual Expenditures (in millions)
Year Planned Actual Ave. Social Ave. Ave. Social Exp. Ave.
Exp. Exp. Housing Vs. Actual Exp. Social

Exp. Exp.
%
Vs.
Plan
1993 10,060 2535 8,715 510.55 1,493 17% 14.80%
1994 11,311 4.720 8,715 613.32 1,493 17% 13.20%
1995 20,228 7,034 8,715 652.25 1,493 17% 7.38%
1996 21,871 13,586 8,715 2,657.15 1,493 17% 6.80%
1997 28,993 17,156 8,715 4,101.49 1,493 17% 5.15%
1998 34,725 7,261 8,715 426.21 1,493 17% 4.30%
Total 127,188 52,293 52,293 8,960.98 8,960 17% 7.04%

Planned Versus Actual Expenditure-Direct Housing
The planned housing expenditure for 1993 in the Direct Housing Program or the
United Home Lending Program (UHLP) was 10.06 billion pesos. However, the actual
expenditure for the same year was 2.536 billion pesos which resulted in a huge gap or
shortage of 7.524 billion versus the plan or 75 percent versus the planned
expenditure.
In 1994, the planned expenditure was 11.311 billion pesos but the actual
expenditure was only 4.72 billion pesos. These left a wide gap or shortage of 6.591
billion
pesos or 58 percent versus the plan. In 1995, the planned expenditure for the said
program
was 20.228 billion but the actual expenditure fell very short again with only 7.034 billion.
This resulted in another widegap which was 13.194 billion pesos or 65 percent short of
the plan. From 1996 to 1998 the comparison between planned the planned and actual
expenditures revealed the same story. The planned expenditure in 1996 was 21.871
billion
pesos but the actual expenditure was only13.586 billion pesos resulting in a wide
gap that was 38 percent short of the plan. In 1997, the planned expenditure was only
17.156 billion pesos. These left a big shortage or gap of 11.8 billion pesos or 41 percent
short of the plan. The worst year was in 1998 where only 7.261 billion pesos were
spent for this program compared to the 34.725 billion pesos of planned expenditure.
These
left the highest shortage or gap of P27.464 billion or 79 percent shortof the plan.
In summary, the total planned expenditure for the period 1993 to 1998 was
127.188 billionpesos but the actual expenditure were only 52.293 billion pesos which left
a heavy shortage of 74.895 billion pesos or 59 percent short of the plan.
United Home Lending Program Expenditures and Social Housing
The planned and actual expenditures of the United Home Lending Program from
1993 to 1998 were analyzed above. In this section, these expenditures will also be
analyzed
about the social housing component of the program. The actual expenditure that
went to social housing from 1993 to 1998 (see Table 3) was 8.961 billion pesos. As
compared to the total actual expenditure for the same period which was 52.293 billion,
the social housing expenditures averaged only 1.494 billion pesos a year for the same
period.
Compared to the planned expenditure in the United Home Lending Program
(UHLP), the average social housing expenditure was only 14.80 percent versus the plan
in 1993. In 1994, theaverage social housing expenditure declined to only 13.20 percent of
the plan while in 1995, it further shrunk to only 7.38 percent versus the plan. The
average
social housing expenditure versus the plan further declined to only 6.80 percent in 1996.
In 1997, it further declined to 5.15percent and the worst was in 1998 wherein the ratio
declined to the lowest at 4.30 percent.
In totality, the actual social housing expenditures from 1993 to 1998 were only 7.04
percentversus the planned expenditure for the same period.The state’s housing program
which was meant to mainly benefit the poor through social housing was allocated only a
meager 7 percent of the total funds for housing. Indeed, it is paradoxical to note that the
weak state in the social housing program in the Philippines favoredthe higher income
groups rather than the poor majority which badly needed the funds for housing. These
weaknesses will further be discussed in the succeeding sections.

Comparative Analysis Between Planned and Actual Expenditures (in millions)
Year Planned Actual Ave. Social Ave. Ave. Social Exp. Ave.
Exp. Exp. Housing Vs. Actual Exp. Social

Exp. Exp.
%
Vs.
Plan
1993 10,060 2535 8,715 510.55 1,493 17% 14.80%
1994 11,311 4.720 8,715 613.32 1,493 17% 13.20%
1995 20,228 7,034 8,715 652.25 1,493 17% 7.38%
1996 21,871 13,586 8,715 2,657.15 1,493 17% 6.80%
1997 28,993 17,156 8,715 4,101.49 1,493 17% 5.15%
1998 34,725 7,261 8,715 426.21 1,493 17% 4.30%
Total 127,188 52,293 52,293 8,960.98 8,960 17% 7.04%

The Ramos State 1993 to 1997 and the Beginning of the Estrada State 1998
Social Housing Production, 1993-1998
The social housing constructed in 1993 were 4,903 units and increased to 5,293
units in 1994. In 1994, the social housing units built increased to 6,098
units and in 1996 jumped to 17,650 units. In 1997, it further increased to 28,828 units.
However, in 1998, itdropped drastically to 2,896 units.
In comparing social housing production to total planned United Home Lending
Program production totaled 506,510 units from 1993 to 1998, the total social
housing production of 65,673 units for the same period was only a meager 13 percent of
the plan. About theactual housing units produced by the United Home Lending
Program for the same period, socialhousing was only at 25 percent.
Housing Loan Takeouts By Interest Rate and Loan Value
The Home Development Mutual Fund (HDMF) housing loan takeouts by interest
rate (seeTable 5) showed that in terms of the loan value from 1995 to 1998, the 9 percent
interest category (with a loan value of P180,000 and below for social housing) were only
27.6 percent ofthe total loan value of 23.205 billion pesos for the same period. The loan
value for the percent category was 652.258 million pesos in 1995.
These increased to 1.250 billion pesos in 1996 and 1997 these further increased
to 2.716 billion pesos. In 1998, however, these dropped to 1.789 billion pesos. These
summed up to 6.407 billion pesos for social housing for the same period which was again
only 27.6 percent of the total loan value for the period.
The loan value for the 12 percent category (loan value ranging above P180,000 to
P225,000 or economic housing) was 663.947 million pesos in 1995 and increased to
1.759 billion but these declined to 2.154 billion pesos in 1998 which summed up to
8.835 billion
pesos for the period. These comprised 39.6 percent for the economic housing category out
of the total loan value of 23.206 billion pesos.
In terms of the 16 percent interest rate category (loan value ranging above P225,000 to
P375,000 or market housing category), the loan value in 1995 was 536.456 million pesos
and these increased to 1.178 billion pesos in 1996. In 1997, these increased to 3.102
billion pesos, however, it declined to 1.769 billion
pesos in 1998. These summed up to 6.585 billion pesos from 1995 to 1998 and
comprised
28.4 percent of the total loan value for the same period, In the 17 percent interest rate
category (above P375,000 to P500,000 loan range) which were still considered under
market housing, the loan value in 1995 was only 95.079 million pesos. These increased to
238.695 million pesos in 1996 and further augmented to 605.988 million pesos in 1997.
This category decreased to 438.873 million pesos in 1998 and for the period 1995 to 1998
summed up to 1.379 billion pesos which comprised only 5.9 percent of the total loan value
for all categories. However, the combined market housing category in interest rates (16
percent and 17 percent) posted a hefty 34.3 percent in all categories. The Social Security
System (SSS), and the Government Service Insurance System (GSIS) under the United
Home Lending Program (UHLP) contributed a loan value of 1.818 billion pesos (see
Table
6) in 1996 in the 9 percent interest rate category. In 1997, these declined to 1.386 billion
pesos and drastically dropped to only 113.910 million pesos in 1998. These summed up to
3.317 billion pesos which comprised 25 percent of the total loan value of 13.283 billion
pesos for the same period.
In terms of the 12 percent interest rate category, 2.923 billion pesos of loan value
were released in 1996 and 1.946 billion pesos in 1997. In 1998, these dropped to 171.078
million pesos. These totaled 5.040 billion pesos from 1996 to 1998 which comprised 37.9
percent for economic housing out of the total loan value for all categories for the same
period. The 16 percent interest rate category (above P225,000 to P375,000 loan range)
which were in the market housing classification posted a loan value of 3.083 billion
pesos in 1996. In 1997, these declined to 1.682 billion pesos and much further went
down to 160.439 million pesos in 1998. These totaled 4.926 billion pesos from 1996 to
1998 which comprised 37 percent of the total loan value for the same period. Thus, the
share of social housing in terms of loan value averaged the lowest share at 26.3 percent
out of the total loan value from the Home Development Mutual Fund, Social Security
System, and the Government Service Insurance System from 1995 to 1998. The
economic housing category averaged a high of 38.75 percent share from the loan
takeouts of the three Government Financial Institutions (GFIs) while market housing
also averaged a high share

of 35.65 from these institutions.
Thus, the government housing money for the poor majority instead went more
the coffers of the higher income echelon of Philippine society. The weak state is indeed
pro-poor only in words but not in deed.

.
Housing Loan Takeouts By Interest Rate and Number of Accounts
Under the United Home Lending Program (UHLP), the Home Development
Mutual Fund, released loan takeouts (see Table 8) in 1995 to 6,098 accounts in the 9
percent interest rate or social housing category. In 1996, these increased to 9,835
accounts
and in 1997, these more than doubled in increase to 19,709 accounts. However, in 1998,
these totaled 47,656 accountswhich comprised 41.8 percent of the total accounts for the
same period.
In the 12 percent interest rate or economic housing category, the Home
Development Mutual Fund released to 3,267 accounts in 1995. These soared to 8,531
accounts in 1996 and jumped to 20,443 accounts in 1997. In 1998, the release in loans in
terms of accounts declined to 10,005. The total number of accounts that benefitted from
this category was 42,246 accounts for the same period. The economic housing category
posted a share of 37.1 percent out of the total of 113,861 accounts. Compared to the
planned expenditure in the United Home Lending Program (UHLP), the average social
housing expenditure was only 14.80 percent versus the plan in 1993.
In 1994, theaverage social housing expenditure declined to only 13.20 percent of
the plan while in 1995, it further shrunk to only 7.38 percent versus the plan. The
average social housing expenditure versus the plan further declined to only 6.80 percent in
1996.
In 1997, it further declined to 5.15percent and the worst was in 1998 wherein the ratio
declined to the lowest at 4.30 percent.

1999 to 2010: The Estrada and Arroyo States Housing Performance
From 2001 to 2011, housing production in the high-end, mid-end, and low-cost
categories increased, while production of houses in economic and socialized housing was
relatively flat. From 2000 to 2011, economic, socialized, and low-cost housing cornered
close to 70% of total housing production. During this same period, the socialized
segment accounted for 27%, the economic segment accounted for 29%, and the low-cost
segment 13%.
As of 2011, there were 3,164 players in the housing industry. Despite the huge
number of firms engaged in housing, only a few firms dominate the industry. Most of
these
firms were highly integrated developers that were engaged in various real estate
developments besides housing. Many other firms are into retail real estate, hotels,
commercial office buildings, and industrial estate development.
The Subdivision and Housing Developers’ Association (SHDA) was still the
largest
organization of housing developers in the Philippines, counting 160 members from its
chapters in Luzon, Visayas, and Mindanao. Other industry participants were members of
the Chamber of Real Estate and Builders’ Associations (CREBA), the Real Estate
Brokers
Association of the Philippines, Inc. (REBAP), the Philippine Association of Real Estate
Brokers (PAREB), the National Real Estate Association of the Philippines (NREA), and
the Organization of Socialized Housing Developers of the Philippines (OSHDP).
The housing backlog was 3.9 million households. Assuming that production of
housing units would average 200,000 units every year from 2012 to 2030, the backlog
would persist and hit 6.5 million households by 2030. The highest demand would
come from the economic housing segment, followed by socialized housing, and lastly by
low-cost housing. As such, even during the time of Arroyo and Benigno Aquino III, the
The state failed to meet the housing needs of the poor Filipinos and will continue to do so
based on the new housing need from 2012 to 2030 (see Table 9 and 10). The backlog for
housing is estimated to be 3,087,530 based on a new need average of 345,941 housing
units per year.
Table 5 Housing demand and supply profile, 2001-2011
Market Segment Housing Demand Housing Supply Surplus (Deficit)
Socialized Housing 1,143,048 479,765 (663,283)
Economic Housing 2,503,990 541,913 (1,962,077)
Low Cost Housing 704,406 242,246 (462,160)
Mid Cost Housing no need 250,403 0
High End Housing no need 224,011 0
Backlog: 3,087,520, excluding 832,046 households that cannot afford
Source of Data: Housing - Securing the Future of Philippine Industries (industry.gov.ph)

The Housing Accomplishment of the Benigno Aquino 111 State
The Aquino State For the period July 2010 to December 2015 provided housing
assistance to 894,569 families valued at P313.607 billion as shown in Table 6.

Table 6 Housing Accomplishment of the Benigno III State 2010 to 2016
ACCOMPLISHMENT
AGENCY (July 2010 – December 2015)
No. of Units Values
(in Billion Pesos) Source:
HUDCC
NHA 528,500 105.362
SHFC 82,239 6.308
HDMF 283,830 201.937
TOTAL 894,569 313.607
In addition to the direct housing assistance provided by the above key shelter agencies, the
Home Guaranty Corporation (HGC) guaranteed P222.026 billion. worth of housing loans
extended by private commercial and rural banks as well as other financing companies
equivalent to about 127,500 housing units.
Housing Accomplishment under the Duterte State
In 2016, the country has an accumulated housing need totaling 1,242,800. This
is comprised of the housing need of informal settler families residing in marginalized
dwelling units, homeless and doubled-up households. The 2016 accumulated housing
represents 19% of the projected housing need of 6,571,387 for the period 2017-2022
based on the study conducted by the Philippine
Statistical Research Institute (PSRTI). Of the total estimated housing need, the
the housing sector will prioritize to address the accumulated housing need of 1,439,550
until the end of 2022 as presented in Table 7.
Table 7 Housing Accomplishments from 2014 to 2019

HOUSING ACCOMPLISHMENT UNDER THE AQUINO iii AND DUTERTE
STATES
AGENCY July 2014 to July 2016 To Percentage
June 2016 May 2019
NHA 241,214 187,609 78%
SHFC 44,984 33,666 75%
HDMF 122,356 250,368 205%
HGC 55,602 112,710 203%
TOTAL 464,156 584,353 126%
Source: HUDCC 2020

Part II
Factors Which Affected the Performance of the Government Financial Institutions
For Social Housing
According to the interviews with six (6) senior officials who wanted to remain
anonymous when they were asked: Why were the social housing targets not met? their
common answers were:
“Government budget was not enough to provide for the deficit in housing supply
especially for the poor.”
“Most of the huge loans went to some favored people which caused the bankruptcy of
the National Home Mortgage Finance Corporation.”
“The bureaucracy was not efficient enough to administer the housing program and
certain flaws such as giving subsidies to the private banks thru the Home Guaranty
The program must be corrected.”
In totality, the actual social housing expenditures from 1993 to 1998 were only
7.04 percentversus the planned expenditure for the same period. The state’s housing
program which was meant to mainly benefit the poor through social housing was
allocated
only a meager 7 percent of the total funds for housing. Indeed, it is paradoxical to note that
the weak state in the social housing program in the Philippines favored higher income
groups rather than the poor majority which badly needed the funds for housing. These
weaknesses will further be discussed in the succeeding sections.

Government Financial Institutions: Commitment Versus Actual Released
The planned housing expenditure shortage can be explained through the failure of
the state banks or government financial institutions to stick to their commitment to
funding
the housingprogram. As such, public funds intended to fund housing for the poor were
intentionally not released and diverted to other financial programs. The weak state in the
Philippine housing finance can be reflected through the government financial
institution’s
reluctance to fund the need housing which was much needed for shelter by millions
of Filipinos. The Social Security System (SSS), the Government Service Insurance
System
(GSIS), and the Home Development Mutual Fund (HDMF) committed to releasing from
1993 to 1998 81.4 billion pesos but these government financial institutions releasedonly
41.9 billion pesos or only 51.5 percent (almost one half) of their commitments to the
Unified Home Lending Program. From the year
Performance of the Home Insurance Guaranty Corporation (HIGC): Housing for the
Rich and Not the Poor
“They were not performing well since private banks were profit-oriented. The banks
agreed to join the housing program because of the subsidies given to them by the
government (see Appendix B: Anonymous interview with six (6) senior staff of HDMF
and HUDCC (20 July 1999).”
The policy of encouraging private banks to participate in the National Shelter
The program led to the creation of the Home Insurance Guaranty Corporation (HIGC).
This Government Financial Institution was responsible for guaranteeing mainly for the
private banks to accommodate loans or wholesale or retail to benefit the lowest 30
percent
of the population. The figures in this study showed that this was not the case.
The planned output of the Home Insurance Guaranty Corporation were 33,921 units in
1993and 44,326 units in 1994. In 1995, 1996, 1997, and 1998, the planned output was
74,256 units,73,167 units, 85,400 units, and 107,176 units respectively.
These totaled 418,254 units from 1993 to 1998. The actual units produced were
363,000 units for the same period averaging 60,500 units per year. These resulted in a
shortage of 13 percent versus the planned output. The social housing component
(P180,000 and below) figured 72,600 units from 1993 to 1998 averaging 12,100 units per
year which shared only 20 percent of the total actual output for the same period. The
above
P180,000 to P375,000 loan range showed a figure of 181,500 units averaging 30,250
units
for the same period. This category captured 50 percent of the total housing output
guaranteed by the program. The above P375,000 to P3,000,000 category posted108,900
units averaging 18,150 units per year for the same period. These resulted in a share of 30
percent out of the total output of 363,000 units from 1993 to 1998
From the 363,000 loans in peso terms generated by the program, only 7.5 percent
went to social housing (P180,000 and below) while the above P180,000 to P375,000 loan
bracket was able to get 19 percent of the total loan. The balance of the portfolio was
loans ranging from above P375,000 to P3million which captured a hefty share of 74.5
percent of the guarantee line. Even from 2010 to 2015, the HIGC guaranteed P222.026
billion. worth of housing loans extended by private commercial and rural banks as well as
other financing companies equivalent to about 127,500 housing units. Also, from 2016 to
2019, HIGC added 112,710 housing units (see Table 7) which catered more to the
economic and upper echelons of society.
a complex between the industrial and banking sector. He wrote:
“Not only do the landed families dominate the manufacturing sector; they also control the
leading private commercial banks in the country. Of the top 10 local private banks in 1986,
six, including the largest private banks in 1986, including the oldest and largest, the Bank
of the Philippine Islands, was controlled by landed capitalist families (Rivera, 1994,
p.50).
In other words, the main beneficiaries which were supposed to be the social
housing categorywas only able to benefit a minimal amount or share of only 7.5 percent
of the total guarantee line while the bulk of the guarantee line went to the middle and
upper
the class bracket of Philippine society. Again, guarantee money designed for the poor
went
to the coffers of the upper classes for housing.
Profits and Interest Rates in the Philippine Financial System
In this section, the structure of the State and the Philippine Financial System from
1987 to1998 will be analyzed as it relates to the Philippine housing finance sector.
The financial system in the Philippines provides enormous profits to those
financial institutions and banks that were primarily in the business of banking for the
sake of banking
profits. According to a World Bank study (World Bank, 1988: iii 73), pre-tax profit
margins in the Philippines were roughly 300 percent higher than the average of such
margins in eight others. The World Bank’s analysis concentrates on the distinction that
must be made between the profit structures of the stronger and weaker banks in the
Philippine banking system: the more efficient banks pricing their products and services
concerning the cost structure of the smaller banks, a practice which effectively enabled
them to capture higher profits. In early 1991, savings deposit rates were at 11 percent per
annum, while prime lending rates surpassed 23 percent interest per annum.
Analysis of interest rates from 1987 to 1998 would show the samepattern of high
spreads as was in 1991. These large spreads guarantee high levels of profitabilityfor
financial institutions and banks. The interest spread to savings ratio was 196 percent in
1987 and 290 percent in 1988. In 1989, the interest spread to savings ratio was 215
percent and dropped gradually to 90 percent in 1997. Nevertheless, the spreads were still
too high in the banking system.
Philippine banks were highly profit-oriented from 1987 to 1998. As such, the
policy of encouraging private banks through guarantees by the Home Insurance
Guaranty Corporations only resulted to loan portfolios with higher loan ranges and
higher interest rates. Moreover, the state which was supposed to guarantee social housing
for the lowest 30 percent income bracket of Filipinos granted a huge majority of its
housing loan portfolios to market housing (upper-classbracket) with higher interest rates.
Thus, guaranteeing high profits for the state banks except for the Home Mortgage
Finance Corporation which was almost milked to death in 1995 by private developers.
However, with improvements in monetary policy and lowering lending rates in
2017, rising expansion began to put a strain on the BSP's accommodative money-related
strategy, and the swelling rate outperformed in mid-2018 the 4 percent roof of the
swelling objective reach. Credit proceeded with its quick development in 2017 however
facilitated in the final quarter. The pressing factor from the increasing swelling rate
expanded in 2017 while the key arrangement rate stayed unaltered. Regardless of a
recently rebased shopper value record (CPI) arrangement, the feature expansion rate
moved from a normal of 1.3 percent in 2016 to 2.9 percent in 2017, preceding arriving at
4.3 percent in March 2018, which was past the roof of the BSP's swelling objective reach
(Figure 11). Food expansion drove practically 50% of the CPI swelling expansion in
2017 due to more exorbitant costs of fish, meat, and organic product items. Energy costs
rose to pair with the worldwide expansion in unrefined petroleum costs and changes in
nearby power costs. Barring the unstable food and energy things, center swelling
likewise rose pointedly, mostly because of the pass-through impact of a more vulnerable
peso. It could likewise demonstrate expanding request side pressing factor because of the
economy working at its latent capacity, which could be an early indication of the
economy overheating. Regardless of rising homegrown inflationary pressing factor and
the three vertical changes of the U.S. Government Funds rate in 2017, the BSP financial
board kept the strategy rate fixed at 3.0 percent consistently, while it brought down the
save prerequisite proportion by one rate point as of March 2, 2018.18
Credit development stayed solid in 2017. Complete credit development sped up
from a yearly normal of 14.3 percent in 2016 to 17.8 percent in 2017, reflected generally
by domestic liquidity (M3) increment from a normal of 12.5 percent year-on-year in
2016 to a normal of 13.2 percent year-on-year in 2017. Also, credit to firms developed
from
13.5 percent year-on-year in 2016 to 17.4 percent year-on-year in 2017, while the
development in family advances was supported at a yearly pace of 20.3 percent in 2017,
which was marginally lower than the 20.5 percent expansion in 2016 (Figure 12). The
sectoral piece of firms' advance portfolios has remained extensively unaltered, as credit
development kept on preferring the land and discount and retail exchange areas. Among
utilization advances, the biggest credit expansion in 2017 was for engine vehicle
advances,
which developed at a yearly pace of 24.6 percent (51.0 percent of all-out utilization
advances), trailed by a 19.1 percent (20.5 percent) yearly expansion in credit for
compensation-based advances and 16.5 percent (24.9 percent) for Mastercard debt.19
The credit-to-GDP proportion proceeded to consistently ascend from a normal of 61.0
percent
in 2016 to a normal of 64.6 percent in 2017.
The Philippines' monetary framework stays steady and versatile. The portion of
non-performing credits declined from a normal of 2.2 percent of all-out advances in 2016
to 1.9 percent in 2017. Philippine banks were very much promoted, with an absolute
capital sufficiency proportion at 15.3 in September 2017, well over the 10%
administrative least. Moreover, banks' profit from value somewhat diminished from a
normal of 10.0
percent in 2016 to 9.9 percent in 2017. Additionally, the portion of interest payments to
add up to working pay expanded from a normal of 73.1 percent in 2016 to 74.7 percent
in 2017, while net interest edges stayed unaltered at a normal of 3.3 percent liquidity in
the financial system, and observed that the BSP had ample scope to mitigate the potential
liquidity impact of a phased reduction in the reserve requirement via offsetting auction-
based monetary operations (see Figures 3 and 4).
Nevertheless, despite the improvements in the Philippine Financial System,
private
banks' performance in providing social housing remained small (see Table 7). As such, the
market housing approach by the Philippines to social housing was a failure.
Figure 3: Inflation Rose Sharply and Figure 4: Credit Has Sustained Its
Surpassed in March 2018 the Ceiling Double-digit Growth Rates
of the Central Bank’s Target Range

Source: PSA, BSP. Source: BSP.
Part III
The Nature of the Philippine State in the Social Housing Financing Sector
“Yes, there were some favored particular people or developers who were closed to
the administration and they were well connected with the powers that be, we have no
choice but to approve them (see Appendix B: Anonymous interview with six (6) senior
staff of HDMF and HUDCC (20 July 1999).”
“No, the budget for social housing was not enough for a long long time since even the HDMF
would prefer to invest their money in profitable real estate ventures and other high earning
investments (see Appendix B: Anonymous interview with six (6) senior staff of HDMF
“We feel that HDMF should be profitable so that it will be self-sustaining in the long-run
(see Appendix B: Anonymous interview with six (6) senior staff of HDMF and HUDCC
(20 July 1999).”
“Since our congress and even our presidents belong to the upper class and there was
a lot of pressure for the congressmen and senators to increase the housing budget but
the government prefer the switch to market housing since this will be too heavy for
the budget and free huge funds for more profitable ventures such as exports and
other investments (see Appendix B: Anonymous interview with six (6) senior staff of
HDMF and HUDCC (20 July 1999).”

Distribution of Loans Among Private Developers and Banks: The Patrimonial
Nature of the Philippine State in Social Housing Financing
The Home Development Mutual Fund, the National Home Mortgage Finance
Corporation, the Social Security System, and the Government Service Insurance System
(under the United Home Lending Program) granted a total of 42 billion pesos in loans to
private developers, and private bankers from 1987 to 1996. Ranked as the number one
largest recipient of loans was C&P Homes owned by Manuel Villar with 7.7 billion
pesos. Villar’s group captured 18.50 percent of the total loan released. Ranked number two
largest recipient was the Extraordinary Development Corporation with 2.7 billion and
captured 6.8 percent of total loan released.
The E.B. Villarosa Group ranked as number three largest recipient of loans
received 2.5 billion pesos equivalent to 6.4 percent of total loans released. The Campos
Group ranked as number four largest recipient with .976 billion pesos equivalent to 2.3
percent of the total loanreleased.

Table 4b Distribution of Loans Among Private Developers and Banks 1987 to 1996
Housing Loan Percentage Rank Collection
Developer Borrowed (%) of Total Efficiency
from Loans Ratio (%)
NHMFC/
HDMF (Php)
C&P Homes 2.1 billion 60.80%
5.6 billion 18.50% 1 39.30%
Extraordinary 368.99 billion 6.80% 2 59.10%
2.498 billion 38.20%
E.B. Villarosa 2.5 billion 6.40% 3
Campos .976 billion 2.30% 4 58.20%
Group
Urban Bank
(Bartolome) .862 billion 2.00% 5
Baes Group .800 billion 1.90% 6 37.10%
Laxa Group .712 billion 1.70% 7
BPI Family
Bank (Ayala) .498 billion 1.20% 8
Stateland Inv. .476 billion 1.10% 9
Choa Group .417 billion 1.00% 10
Other entities 24.26 billion 57.10%
Source: Documents from HDMF 1999

Urban Bank (already closed shop) owned by the Bartolome family received .862
billion pesos and ranked as number five largest recipient. This bank received an
equivalent
of 2 percent of the total loan released. The Baes Group ranked number six received a
total
of .8-billion-peso equivalent to 1.9 percent of the total loan released.
The Laxa Group ranked number seven and received .712 billion pesos equivalent
to 1.7 percent of the total loan released. The BPI Family Bank of the Ayala family
ranked number eight and received .498 billion pesos in loans equivalent to 1.2 percent of the
total
loan released Stateland Investment ranked number 9. with .476 billion pesos in loans
received to 1.1 percent of total loans granted.
The Choa Group received .417 billion pesos equivalent to 1 percent of the total loan
released. The Group ranked number ten. The remaining balance went to other entities
which were not identified in the data and this is equivalent to 24.26 billion pesos or
57.10 percent of the total loan released.
The United Home Lending Program through the National Home Mortgage
Finance Corporation and the Home Development Mutual Fund provided loan takeout
amounting
to 2.1 billion pesos to C&P Homes from 1987 to the first semester of 1992 despite a low
collection efficiency rating of 60.8 percent during this period. These Government
Financial Institutions also granted loans to C&P Homes worth 5.6 billion pesos from the first
Figure 3 Distribution of Loans Among Private Developers and Banks
1987 to 1996
Source: Documents from HDMF 1999
semester of 1992 to 1996 despite the much lower collection efficiency ratio of 39.3
percent during this period.
The Extraordinary Development Corporation received a loan of 368.99 million
pesos from 1987 to the first semester of 1992 despite its loan efficiency ratio of 59.1
percent from 1987 to the first semester of 1992. However, surprisingly, it was given a
huge
loan takeout which jumpedto 2.498 billion pesos during the second semester of 1992 to
1996 despite its low collection efficiency ratio of 38.2 percent. The Campos Group
received .976 billion pesos in loans despite its poor collection efficiency ratio of 58.2
percent from 1987 to the first semester of 1992 and the Baes Group with a low collection
efficiency ratio of 37.1 percent from the second semester of 1992 to 1996.able to get Php
800 billion or 19 percent of the total loan.
Thus, it was very clear that these were favored loans to a particularistic class
since these loans were renewed even though their collection efficiency ratios were low.
Furthermore, the 30 percent income bracket of Filipinos granted a huge
majority
of its housing loan portfolios to market housing (upper-classbracket) with higher interest
rates. Thus, guaranteeing high profits for the state banks except for the Home Mortgage
Finance Corporation which was almost milked to death in 1995 by private developers. The
Home Development Mutual Fund is considered the premier housing finance institution
in the Philippines was the primary agency in implementing the United Home Lending
Program. Despite its huge bad debts, its profit and loss statement in 1996 showed a
highly lucrative income from interest on loans of almost 3 billion pesos. In 1997, its
interest income on loans jumped to almost 4 billion pesos. These resulted in a lucrative net
profit of 3 billion pesosin 1996 and 2.9 billion pesos in 1997. As such, both the private and
state banks were highly profit-oriented in the Philippines failing the social housing
program from 1987 to 1998.
Although the number of accounts for social housing which posted a share of 41.8
percent from 1995 to 1998, the loan value for the same period was only 27.6 percent out
of the total loan value released which was 23.026 billion pesos. The number of accounts
released nevertheless pointed to a hefty 58.2 percent for both the economic, and market
housing category.
The Social Security System, and the Government Service Insurance System
under
the United Home Lending Program released loans to 12,079 accounts in 1996 in the
social
housing category (see Table 6) or 9 percent interest rate loan bracket. However, the
number
of accounts which benefitted declined to 9,119 in 1997 and further dropped to a meager
749 accounts in 1998. These totaled 21,947 accounts from 1996 to 1998 which
comprised
36.5 percent from a total of60,050 accounts for the same period.
The 12 percent interest rate bracket (economic housing), posted 13,494 accounts
in 1996 anddeclined to 9,036 accounts in 1997. It further drastically dropped to 793
accounts in 1998. Thesetotaled 23,319 accounts which shared 38.8 percent of the total
accounts from 1996 to 1998.
The Social Security System and the Government Service Insurance System
(under the UnitedHome Lending Program) were able to release 9,343 accounts in 1996 in
the market housing category (12 percent interest rate bracket). In 1997, it declined to
4,954
accounts and in 1998posted only a minimal figure of 487 accounts. These totaled 14,784
accounts for the market housing category which shared 24.6 percent out of the total from
1996 to 1998. Overall, from 1996 to 1998, the United Home Lending Program released
accounts on the average to social housing at 39.15 percent out of the total accounts
granted
by the Government Financial Institutions. The economic and market housing category ate
up 60.85 percent of the accounts and was able to obtain 73.7 percent of the loan value
from 1995 to 1998.These figures were not consistent or in contrast with the policy of the
National Housing Program tocater to social housing which mainly composed the lowest
30 percent echelon of the population in the country.

The Political Economy under the Corazon Aquino, Ramos, Estrada, and Arroyo
States
In the present time, these practices continued in the Philippines, the state was still
being milked and influenced by a few oligarchs or interest groups in the housing sector
and this was also happening in other sectors and industries. The Philippine state was weak
and was still weak and continues to practice state patronage. Access to the state machinery
is important for most of theseoligarchs in the creation of more wealth. The low-cost,
socialized, and economic housing units account for a large share of housing production.
From 1999 to 2001, the Estrada administration despite his short administration more than
doubled the houses built for the poor than his predecessor. However, his administration
also was weak in the sense that he also succumbed to favoritism and corruption which led
to his fall.
During the Corazon Aquino organization, complete housing need was assessed at
2.6 million however government could just give 268,279 units of haven security. For the
period 1993-98, the assessed need had ascended to 3.72 million lodging units – including
1.2 million for the last 30%. (ADB, 2001) accordingly, the Ramos organization's National
Shelter Program (NSP) intended to give 1.24 million units of housing help (identical to
889,504 families). From January 1993 to September 1998, the NSP figured out how to
expand "1,357,025 units of housing help to 623,053 families." (HUDCC, 1999a) Under
the Estrada organization, HUDCC assessed complete housing need for 1999-2004 to be
over 3.3 million units, which incorporated "the 1995 overabundance of 1,126,203 units, a
development of around 2,223,739 units, and 12,407 unacceptable houses requiring
redesigning." The cut short Estrada administration oversaw 274,727 units in its more than
short-term rule. (ADB, operation. cit.) Compared to its archetypes, every one of which
served six-year terms, the Estrada organization's performance was exemplary: Besides
surpassing the number of families helped under the Corazon Aquino organization, its
normal yield each year was likewise better compared to what the Ramos organization
could achieve in six years. When estimated against the first objective of 237,339 families
to be aided in 1999 and 2000, as set out in the Medium-Term Philippine Development Plan
for Shelter (1999-2004), the area certainly beat itself. Be that as it may, it misses the mark
regarding the reconsidered, pretentious objective of 350,000 houses every year under the
aegis of the Presidential Commission on Mass Housing, whose creation in October 1999
set off the disputable acquiescence of then-HUDCC Chair Karina Constantino-David.
The political issues of then-President Estrada in 2000 gave an event to the
metropolitan poor to turn into an unmistakable political power. Playing up to his picture
as "the leader of the majority," Estrada went on an alleged land-circulation gorge
particularly in large metropolitan helpless networks to prepare support. Quit worrying
about that the "titles" were copies, did not contain the names of legitimate recipients, and
covered tasks that still couldn't seem to be finished, as what occurred in a few barangays
around there, the picture of Estrada offering area to the poor supported his remaining
before the last mentioned. It likewise offered assurance to the legend he was sustaining
that the rich and amazing ganged up upon him since he decided to take the side of poor
people. Neediness had become an exceptionally politicized issue.

The extra-sacred methods by which Gloria Macapagal-Arroyo came to control in
January 2001 and the exceptionally hyped nature of "Individuals Power II" as the result of
elitist ruse against the "leader of the majority" constrained the new organization to make a
solid responsibility "to take up arms against destitution." It was basic for the new president
to quickly win political focuses from by far most of the helpless who felt double-crossed
by the defeat of their golden calf. The blast of dissent among Estrada allies in May of that
the very year gave uplifted significance to destitution and particularly the metropolitan
helpless' absence of admittance to protect the security, with the end goal that tending to
these issues get not only a matter of social equity but rather, maybe more critically,
political endurance.
However, the government needs more than truthfulness and political will to address
the requirement for shelter security. In the light of lessening assets and the absence of the
ability to proficiently convey lodging, the government needs to go up against primary and
monetary insufficiencies that hamper the formation of a practical housing program.
As such, even the strong man state of Duterte cannot be able to fill the gap
considering the very minimal budget of 1% the government allotted for housing or even
to social housing. Villacorta (1994) also using the findings of the Ateneo Center for Social
Policy regarding the predominance of oligarchs in the Philippine House of Representatives
mentioned 25 congressmen owned or partially owned rural banks; 27 were connected with
commercial banks; with 17 having insurance businesses; and 28 had investments in
holding, management, and investment companies,
As such, Villacorta concluded that because of the elitist background of most

congressmen, the House of Representatives had become the power base of elite agenda
and so, the state’s role in terms of its relative autonomy over the economic base was weak.
Thus, this affected the policies, and programs for social housing because funds which
could be allocated for the poor competed with the financing needs of
businessmen and law- makers with access to the state machinery especially Government
Financial Institutions (GFIs).
Even during the present times, the house of representatives and even the senate
continue to have the same profile and since the members of congress were elitist, it
would not be surprising that only 1% of the government’s budget went to social housing
Again, taxes paid by the people were not used to build social houses for those who really
need it.
The Political Economy of the Aquino III State
The "genuine change" guaranteed by Rodrigo Duterte has clouded how much sure
change happened under the organization of Benigno Aquino III (2010–2016). Aquino's
guarantee to follow the "straight way" was work to both proper his mom's (Corazon
Aquino) saw respectability and draw a sharp difference with the unavoidable debasement
related to the organization of Gloria Macapagal Arroyo (2001–2010).
Notable accomplishments of the Aquino government included passing conceptive
well-being and "sin charge" change laws, carrying out twelve years of essential schooling,
broadening public account change, extending financial space and social spending, and
putting forth an attempt to give more prominent self-sufficiency to Muslims in Mindanao.

Gross domestic product development arrived at 6.5 percent, and by basically every action
the country's global standing improved essentially. Accordingly, Aquino stayed famous
all through the majority of his term.
Undoubtedly, there additionally were huge deficiencies and missteps.
Macroeconomic development was delayed to diminish neediness, and the public authority
could not quickly improve the framework, particularly in rush hour gridlock obstructed
Metro Manila. It did little to change broken food and agribusiness strategies and might
have accomplished more to fortify anticorruption foundations and to pass an opportunity
of data law. As far as administration, Aquino was broadly seen as legitimate, however,
in some cases esteemed steadfastness over capability and periodically appeared to do not
have the compassion that Filipinos anticipate from their political chiefs. His organization
likewise experienced smugness (because of the president's very own prominence), issues
conveying its achievements, and its inability to manage issues imparting its
achievements,
and its inability to make the Liberal Party a more reasonable and tough ideological group.
What's more, when it came time to pick a replacement, Aquino stayed focused on
supporting Manuel "Blemish" Roxas, his secretary of the Department of the Interior and
Local Government (DILG)— even though assessments of public sentiment reliably
showed that Roxas would not win.
The Aquino III export-led growth drove the Philippines to improved economic
performance from a GDP growth rate of 3.86% in 2011 to 6.35%.

The Philippine Political Economy under the Duterte State:
On May 10, 2016, Rodrigo Duterte, at that point 71 years of age, was chosen
president, winning 39% of the vote in a five-manner race. Charming, obtuse, and much of
the time profane, Duterte consolidated a Dirty Harry persona with a history as a fruitful
chairman of Davao City, Mindanao's biggest city. Even though Duterte may have
all the earmarks of being unsophisticated and rough, he is politically sagacious and
sensitive to the mentalities and worries of normal Filipinos. He ran on his standing as a compelling,
straightforward civic chairman of Davao who focused on lawfulness over
legitimate securities for supposed hoodlums. The general topic of Duterte's mission was
that his solid authority would deliver quick change. During his mission, he loaded analysis
on the Manila-based world-class, pledged to embrace a cross-country attack on unlawful
drugs and culpability, and vowed to change the public authority to a government
framework. His triumph over Mar Roxas, who set a removed second, flagged that the
guarantee of progress was more convincing than coherence. Even though Duterte
had been well known in Mindanao before he ran for president, his triumph showed that his
allure crossed areas and financial classes. The 16.6 million Filipinos who decided in favor
of him seemed to accept that he could convey genuine change (Timberman, 2019).
Duterte's triumph astonished numerous and stunned a few. In the wake of his
political decision, political examiners have wrestled with what it says about
contemporary
Philippine governmental issues. The reasons why he won are perplexing, proposing that
mindful and nuanced ends are justified. To begin with, the officeholder, Benigno
Aquino—the exemplification of reformist first-class majority rules system—couldn't run
briefly term. If he had the option to run, it may have been an altogether different
outcome.9 Second, the Philippine political race law has no arrangement for the
run-offs, so there is no motivating force to frame alliance tickets. Had Mar Roxas and
Senator Grace Poe, the two most similar competitors, united, they may have had the
option to crush Duterte. Third, Duterte ran a sharp and successful mission. He reported
his application late, so the media had a brief period to examine his record as civic
chairman and his adversaries had substantially less opportunity to assault him. His
mission activated huge quantities of volunteers and utilized online media well. Fourth,
each of the four of Duterte's rivals had critical negatives (op.cit.).
Conversely, Duterte, in light of his character and message, was an eye-catching
and convincing competitor, who had the option to take advantage of (and
somewhat control) working-class disappointments and "dormant tension," especially
about drugs and crime. Although the statements of working-class dissatisfaction appear
to be legitimate for any individual who has lived in Metro Manila, Cebu, or the modest
bunch of different urban communities that are home to the greater part of the Philippine
working class, the degree to which this feeling of dissatisfaction and nervousness was
public in the extension is generally less clear (op. cit.).
After accepting office on June 30, 2016, Duterte gathered a diverse bureau that
included graduate school colleagues, long-lasting partners from Davao, ex-military
officials, business pioneers, and delegates of the socialist left. His different alliances met
up through close-to-home faithfulness, local fondness, and political advantage. It
included numerous political figures who had been sidelined during the Aquino
organization, most eminently previous president Gloria Macapagal Arroyo and individuals
from the Marcos, Estrada, and Villar families (op. cit.).
Speaking of Villar (C &P Homes), he was also one of those who borrowed money
from the United Home Lending Program through the National Home Mortgage Finance
Corporation and the Home Development Mutual Fund (see Table 4b) provided loan
takeout amounting to 2.1 billion pesos to C&P Homes from 1987 to the first semester of
1992 despite a low collection efficiency rating of 60.8 percent during this period. These
Government Financial Institutions further granted loans to C&P Homes worth 5.6
billion pesos from the first semester of 1992 to 1996 despite the much lower collection
efficiency ratio of 39.3 percent during this period.
Duterte's perspective was vigorously affected by patriot and radical idea dating
from the 1960s and 1970s, just as by his 22 years of involvement as chairman of
Davao City. In Davao, he joined a hardline way to deal with the rule of law with socially
reformist and favorable to business approaches. As civic chairman, he was both a
paternalistic benefactor and a fearsome supervisor whose orders must be followed.
Therefore, he has little capacity to bear investigation or difficulties to this power.
He considers them to be assailed by existential dangers of medications, wrongdoing, and
defilement. As befits Philippine culture, his methodology is exceptionally personalistic:
he introduces himself as the lone pioneer solid and unequivocal enough to save the
country.
Duterte might be culpable to the standards of correspondence when he
introduces his comments with "mother lover," however he brings to the surface the
aggregate dissatisfaction many feel. He may not offer the clearest arrangement, yet he
advances the sincerest talk of compassion. Duterte's drain language sets up the
desperationof saving the republic. Counting "slaughter" and "demise" is crucial for the
president's jargon for the nation is at war, and his governmental issues of "I will"
requests fast, but excruciating, solutions.
The Duterte government's first concerns incorporate fighting unlawful
medications and wrongdoing, advancing fast foundation advancement, supporting
monetary development and making it more comprehensive, improving harmony
and improvement in Mindanao, and reorienting the Philippines' unfamiliar relations. To
help these objectives, the public authority has essentially expanded spending on the
ramework, raised the pay rates of government representatives, extended existing social
advancement programs, resuscitated the slowed down harmony measure with the Moro
National Liberation Front (MNLF) and the Moro Islamic Liberation Front (MILF), went
into dealings with the socialist extremists, and set up a nearer relationship with China.
Space imperatives do not allow a full conversation of the public authority's
homegrown and international strategies. All things considered, the accompanying
segments talk about three arrangement regions that offer bits of knowledge into the
Duterte organization—monetary policymaking, harmony and improvement in Mindanao,
and sacred change—and examine in more prominent detail the progressing battle on
drugs. Financial approaches and execution. As an applicant, Duterte showed little
interest in monetary approach issues. To console apprehensive homegrown and
unfamiliar organizations, his mission built up a ten-point financial plan that to a great
extent proceeded with the Aquino government's monetary approaches. Since getting to
work, Duterte's two head financial needs have been to speed up monetary development
and make it more comprehensive, and to essentially expand spending on the genuinely
necessary framework. Key highlights of the public authority's way to deal with the
economy incorporate running a bigger shortage, receiving a more statist way to deal with
foundation advancement, and proceeding with expansions in friendly spending.
In 2017, GDP development was 6.7 percent, and it is projected to be about 6.5
percent in 2018. The public authority, under its "Construct Build" program, has
fundamentally expanded spending on foundation and has aspiring designs to fabricate
new rail lines, a tram, roadways, and extensions in the coming years. To back spending
on the framework and social administrations, the public authority has left on a
multiphase duty change program.
The primary bundle of changes was endorsed into law in December 2017; the
second and more dubious bundle was with Congress. The swelling has been expanding,
averaging 4.8 percent from January to August and arriving at a nine-year high of 6.7
percent in September and October.13 Higher oil and food costs, extract charges related
to charging change, and the frail peso had all energized expansion.
The political climate in the Philippines, as always, stands on shaky grounds.
WhenPresident Rodrigo Duterte came into power in 2016, he has frequently complained
of the Philippine’s turtle-paced Internet speeds (Elliotte & Deck, 2020). As can be
gleaned from several speeches of the President, he has openly declared his disdain of the
country’s “oligarchs.” Accordingly, he has pointed out the existing duopoly in the
country’s telecom industry. That is, Globe Telecom and PLDT have dominated the
island’s telecom services for decades, without meaningful competition. Thus, in July
2019, a third telecom player was conceived--DITO Telecommunity. The company,
which was openly endorsed by the President himself in several of his live public
Speeches was a consortium that includes China Telecom. The major stakeholders of
DITO were Udenna Corporation and Chelsea Logistics, owned by Dennis Uy, a close
associate and campaign donor of President Duterte (Verdict.co.uk, 2020).
President Duterte’s “anger” towards “oligarchs” may have stemmed from the
“elite’s” dominance and control of the Philippines’s major industries. From mining, real
estate, and infrastructure industries, to name a few, there is a common stamp of elite
families that have household names. Whether this contempt is justified or not, the
“oligarchs” now have to face a new reality-- that a very popular and powerful man is not
going to “dance with them.” So that in a 2019 speech before a crowd in Quirino
Grandstand, he threatened to put Ayala and Pangilinan to jail. This was brought about by
a claim of the President that the companies of the two aforementioned personalities made
an “onerous” water deal with Maynilad and Manila Water, accusing them of syndicated
estafa (Maitem & Corrales, 2019). Moreover, Mr. Ernest Cu, President, and CEO of
Globe Telecom was threatened by the President himself, that he would be hanged on one
of his towers should he fail to improve Globe’s Internet services (Elliotte & Deck, 2020).
As Duterte made it clear that he was against the old oligarchy, just like Marcos,
he also created his cronies, new oligarchs, and particularistic interest particularly his
friends and classmates as well as those who financed his election campaign in May 2016
(see Appendix F) for the list of his cabinet members and their linkages to them)
Also, the Duterte debt-led economic growth with the Build Build Build (BBB)
the program that utilized fiscal policy to fuel construction and employment. The
TRAIN Law also greatly increased government revenues to support more public
spending. Thus, under the Duterte State GDP grew from 7.15% in 2016 to 6.04% in
2019 (see. Table 10).
However, even though his social housing program gave the best output so
far (see Table 7), the new housing need as based on the Philippine Development Plan
from 2012 to 2030 would be 6.2 million with a total new need average of 345,941
housing units per year (see Table 8).
Table 8 New Housing Need, 2012-2030
Market Segment Price Range Units Needed % of TOTAL Need
Can’t Afford/Needs Subsidy 400K & below1,449,854 23%
Socialized Housing 400K & below1,582,497 25%
Economic Housing 400K – 1.25M 2,588,897 42%
Low Cost Housing 1.25M – 3M 605,692 10%
Mid Cost Housing 3M – 6M No need
High End Housing > 6M No need
TOTAL Need 6,226,940
Total New Need Average: 345,941 housing units per year
Source: Philippine Development Plan 2012 to 2030

Table 10 The Aquino III State and the Duterte State:
Economic Performance Philippines GDP Growth Rate 2011 to 2019
Year GDP Growth (%) Annual Change
2019 6.04% -0.30%
2018 6.34% -0.59%
2017 6.93% -0.22%
2016 7.15% 0.80%
2015 6.35% 0.00%
2014 6.35% -0.40%
2013 6.75% -0.15%
2012 6.90% 3.04%
2011 3.86% -3.48%
Source: World Bank

Table 11 Philippines GDP Per Capita 2008 to 2019
GDP Per Capita Annual Growth
Year (US $) Rate (%)
2019 $3,485 7.16%
2018 $3,252 4.13%
2017 $3,123 1.61%
2016 $3,074 2.42%
2015 $3,001 1.40%
2014 $2,960 3.07%
2013 $2,871 6.57%
2012 $2,694 9.94%
2011 $2,451 10.52%
2010 $2,217 16.35%
2009 $1,906 -4.29%
2008 $1,991 14.13%
Source: World Bank

Social and Political Context: The State, Elites, and Patrimonialism
From 1935, when the Philippines turned into a semi-autonomous province, the
conduct of presidents and other amazing political and financial elites has intensely
affected the nature of the country's vote-based legislative issues and governance. The
Philippines is a unitary state with a champ bring home all the glory discretionary
framework, an administration that activates enormous control over spending plans and
arrangements, and intrinsically powerless ideological groups. Subsequently, the
president assumes a focal part in deciding strategy results, just as the standards and
conduct that shape governmental issues and administration (Timberman, 2019).
The second significant impact on vote-based system in the Philippines was the
country's amazingly versatile political and monetary tip top. The president is restricted to
a solitary six-year term, so the force and impact of individual presidents were passing.
Conversely, political and business families like the Marcoses, Cojuangcos, Aquinos, and
Ayalas—to give some examples—have had an imperative life span and adaptability.
They apply an amazing impact over races, enactment, policymaking, administrative
bodies, statute, and the dispersion of government assets (op. cit.).
For quite a long time, this elite class has obstructed the improvement of a weak
state by restricting the public authority's financial base and co-picking, adulterating, or
scaring the administration. It had hindered and misshaped the Philippine economy,
leaning toward arrangement and assurance over financial rivalry, and has been moderate
and particular in opening the economy to unfamiliar rivalry. Since elites influenced
administrative and policymaking measures, progressive governments had neglected to
embrace and execute financial arrangements that locate the requirements of poor people
and the working class. With a Gini coefficient of 0.43, the Philippines has for some time
been quite possibly the most inconsistent social orders in Asia, with probably the most
the significant level of destitution frequency among Asia's developing economies
(op.cit.).
manufacturers availed of low-interest long-term loans offered by government financial
including Chinese-Filipino capitalists have availed themselves of this important resource.
In particular, many textile, cement, fertilizer, and pulp and paper companies received
58).”
percent of its equity to a single corporation, the crony-controlled Construction and
Development Corporation of the Philippines (CDCP), and was later forced to convert
its loans into company equity upon default by CDCP on its outstanding debts (Rivera,
1994, p.58).
Insurance System (GSIS), was also the source of funds for pet projects of Marcos and
his cronies. Manapat (1991) writes: “The majority of investments and loans of the GSIS
in 1971 were policy, salary, and housing loans to GSIS members. These loans
represented 82% of GSIS investments. These loans to members, however, had
dramatically declined by 1980. Housing loans for members, for example, were phased
out. But during the same period, loans and investments of the GSIS in Marcos-connected
companies and Imelda-inspired projects rose to USD843 million or 65% of the USD 1.3
billion the GSIS earned as income by the end of 1980. The CDCP conglomerate of
Cuenca was a constant recipient of GSIS money, from the start of the construction boom
until the time that this conglomerate collapsed (Manapat 1991, p. 372).
Even after over a time of generally solid macroeconomic development, the
frequency of neediness diminished just a bit, to 21.6 percent in 2015. Today, by the
World
Bank's measurements the Philippines is a lower-center pay country with a for every
capita
pay of $3,600 and a utilization driven economy that has been developing at about 6.5
percent each year for the majority of the previous decade, filled by settlements and a
developing business measure reevaluating sector. subsequently, the nation's sizable,
overwhelmingly metropolitan, working-class presently includes 15 to 20 percent of the
population. In total, over the past 25 years, the rich have become more extravagant, the
working class has developed, however, stays shaky, and around one-fourth of the
populace stays poor.
Breaking from past unpredictability, the Philippines has arisen as a main
monetary entertainer in Asia and flaunts a-list social advancement drives just as striking
business developments. The solid presentation of the Philippine economy over the
previous decade withdraws from past episodes of macroeconomic shakiness and political
instability. As reflected in Figure 5 while the Philippine economy saw just humble yearly
development rates averaging 2.5 percent in the almost twenty years from 1980-1997, key
primary changes by the last part of the 1990s catalyzed higher development rates.
Development between 2010-2017 sped up to a normal of 6.4 percent yearly, surpassing
underlying and provincial friends. Floated by the solid economy, the nation has
embraced a scope of critical strategy drives that helped a huge number of Filipinos lift
themselves from destitution. Elite drives to convey results for the poor incorporate the
worldwide perceived restrictive money move program (one of the world's biggest and
best focused on) and high-sway sin tax changes that helped interest in well-being while
at the same time decreasing smoking commonness.
Marcos had his cronies as well as Corazon Aquino and Fidel Ramos as can be
implied in the distribution of favored loans with low collection efficiency ratios from
1987 to 1996 and number one on the list was the Villar family. Estrada had his cronies
too but one of them turned around and publicly announced the corruption of Estrada in
the “jueteng” issue that led to his downfall. By the way, although Estrada had a short
stint, his performance in housing was better than the Cory Aquino and Ramos
Administration combined. Also, Noynoy Aquino had his cronies too such as the ex-
PNP chief that led to the SAF 42 scandal which gave a black tint to his administration.
Although, Benigno C. Aquino III was a good bureaucrat and was also commendable in
his housing program, he was also a member of the rich and affluent Cojuangco family.
He could have increased the budget for housing after the SIN taxes were approved (since
there was a huge increase in the budget due to SIN taxes) but why did he not? The
answer can again be speculative since he was also a class of his own (sui generis) as part
of the “elite.” It can only be implied that he did not push for the bigger budget for
housing since his priority was for economic development which favored the “Capitalist
class” and hoping for the spiraling down of economic progress to the poor.
Finally, Duterte had also a good performance in the housing program comparable
to the previous administration but it was not enough compared to the huge gap of
housing needs for the poor. When the TRAIN law was approved, again, there was a huge
increase in the Philippine Fiscal Budget but until now he did not increase the budget
for the poor from a mere one percent more or less. Although he pronounced his war
against the old oligarchs, just like Marcos, he created his cronies. Much of the
budget was used to increase the PNP and the AFP salaries to protect his regime from a
potential coup or rebellion. He was also accused by the United Nations of violating
human rights for killing thousands of suspected drug addicts during the first few months
of his administration. He also imprisoned his political enemies such as Senator Laila de
Lima but released from jail Enrile, Estrada, and Revilla who were accused of graft.
These favors for them certainly came with certain conditions such as siding with him.
Some people can be called his cronies such as Bong Go, Peter
Lim (a suspected drug lord), and Dennis Uy, the chairman of DITO Telecommunity, Inc.
which broked the telecommunications oligopoly of Pangilinan’s PLDT and Ayala’s

Globe. Also, in his cabinet (see Appendix E), it can be found that these are people
who personally linked as friends in childhood or were former classmates or dormitory
mates.
At any rate, according to Habito (May 28, 2017):
Can the government do it? For it to happen, the government would have
to make a dramatic departure from the past public spending record in housing. I
have tracked cross-country data on public expenditures on housing over the years,
and have found a glaring fact: Our spending levels on this basic human need have
been pathetically lower than in most of our comparable neighbors (Habito May
28, 2017).
According to Habito (2021) who was a former NEDA director he had looked
at the nine countries and based on Asian Development (ADB), the original five ASEAN
members (Indonesia, Malaysia, the Philippines, Singapore, and Thailand), plus
Bangladesh, Mongolia, Nepal, and Sri Lanka. The numbers show that over the 15-year
period 2000-2014, public expenditures on housing averaged 0.75 percent of gross
domestic product for the other countries, ranging from Bangladesh’s 0.25 percent to
Singapore’s 1.6 percent. The Philippines, the smallest public housing spender in the
bunch, spent only 0.12 percent of GDP, even less than half of Bangladesh’s
proportionate allocation, and less than one-sixth of the group (Habito, 2017). Again, the
question was: Why did the Philippines prefer a minimal budget for something very
important to the country’s citizens especially the poor?

Furthermore, the research written by Whitehead & Tang (2019) distinguished
three models of reasonable housing conveyance utilized in Asia:
1 Public sector-led
Solid open intercession of the government in reasonable housing supply with a
well-developed monetary framework (Hong Kong, Singapore, South Korea). This study
was central to the high-quality arrangement of reasonable housing in Hong Kong and
Singapore. Public mediation moreover ruled the position in South Korea for decades
after the war. Be that as it may, in later times there had been a declining part for South
Korea’s central government (op. cit.).
2 Private sector-led
Strong private segment inclusion for reasonable housing supply, with a created
budgetary framework for both developers and customers. This bunch includes
China, Japan, Malaysia, and Thailand, all of whom have (or, within the case of Japan,
had)
significant affordable housing approaches. China is atypical in this bunch since it has
government-owned land, but private players had provided excellent entrepreneurial skills
in providing social housing in their country (op. cit.).
3) Informal delivery model
Dominated by informal housing systems and underdeveloped financial systems,
even though there were some government policies in place. This group included India,
Indonesia, Pakistan, the Philippines, and Vietnam, as well as other countries not included
in the study (such as Bangladesh) (op. cit.).
Thus, in most countries that were successful in their social housing programs
such as Hongkong, Singapore, and South Korea (except Hongkong which is a sub-
system of China) which were coined by Hutchcroft as “The Developmental States”
within Weber’s State and Capitalist Development framework were led by the
government not only in terms of an organized bureaucracy with a long-term plan but also
in providing a realistic and bigger budget for social housing (see Figure 6). Moreover, in
South Korea, their big government-owned banks GFIs also had done their fair share in
social housing financing aside from a well-developed private involvement in the housing
sector.
On the other hand, the private sector-led countries such as China, Japan,
Malaysia and Thailand, their “enabling state” framework worked because their countries’
were free from predatory oligarchs and particularistic classes that prey on their” states.”
There was an “embedded pact” (as coined by Evans, 1994) between the State and the
private capitalist class for socio-economic development and called these countries
“Developmental States” similar to the “Regulatory State” of Hutchcroft’s framework as
based on Weber’sTheory of the State and Capitalist Development. In addition, their
government also spent much bigger for social housing than the Philippines because of
their superior economic development undisrupted by elites and patrimonial influences
(see Figure 6 for public housing budgets as a percentage of GDP in the ASEAN).
Finally, the “Informal Delivery Model” as coined by Whitehead & Tang (2019)
was characterized by informal housing systems and underdeveloped financial systems
even with some state policies in place. According to Whitehead & Tang (2019), these
group included India, Indonesia, the Philippines, and Vietnam as well as other countries
not included in the study such as Bangladesh. However, among these countries, the
The Philippines had a very poor performance in closing the gap for the 6.2 million
housing needs of its constituents particularly the poor ones. Also, the Philippines had the
lowest public budget for social housing with only 0.12 percent (%) of GDP while the
average public spending for other countries in the ASEAN was 0.75 percent from 2000 t
o 2014. Even Bangladesh had 0.25 percent (%) which was even twice higher than the
Philippines.
Furthermore, aside from the patrimonial nature of the Philippine State, the
country did not have a long-term socio-economic development wherein other country
such as
Malaysia, Taiwan, South Korea, and China wherein whoever is the head of state, the
Bureaucracy would implement it. However, in the Philippines, the President only had a
six (6) year term and cannot be re-elected under the 1987 constitution. As such,
whenever a new head of state was elected, they brought with them their economic
agenda which usually differs from the previous administrations. As a result, socio-
economic development in the country fluctuated from time to time (see Figure 7).
Development in the Philippines had not been exceptionally comprehensive.
Further, monetary versatility, for example taking off from destitution and moving
upwards in the working class, has been restricted. As demonstrated in Figure 2, the
consolidated complete portion of the moderate poor and the financially powerless had
stayed consistent at around 50% of the populace throughout the previous 20 years, while
the portion of the monetarily secure has expanded humbly in the Philippines comparative
with adjoining nations. Also, just 9.2 percent of the Philippine populace had a for every
capita pay over the US$15/day "worldwide center pay" line in 2015 contrasted with
Malaysia (65.7 percent), Thailand (35.4 percent), and China (19.4 percent).
Due to this disparity between the rich and the poor and without a strong middle
class in the Philippines, it became apparent that the top five (5) percent of the population
were the “king-makers” particularly in presidential elections as well as those in Congress
(see Villacorta, 1994). Unfortunately, the “pawns” were the poor majority who were
supposed to be the “boss” as coined by former president Benigno Cojuangco III in his
Inaugural address after his election on June 30, 2010.
Figure 5 From Diosdado Macapagal to the Duterte State
Performance in terms of GDP Growth Rate 1961 to 2019
Source: The World Bank

Figure 6 ASEAN Public Housing Expenditure, 2000-2014
Source: ADB
Furthermore, the poor majority were the ones who needed affordable or social
housing but Part 1 of this chapter proved that it was the middle and upper echelons of
society who benefited more from the housing program of the government. It was a state
that played “booty capitalism” wherein the state where not autonomous from the,
oligarchs, cronies, and other particularistic classes that preyed on it.

Figure 7: Economic Mobility in the Philippines Compared to the Region
Source: East Asia and Pacific Team for Statistical Development.
Thus, it was argued by this study using the State and Capitalist Development
Framework as shown illustrated as had already been presented in Chapter 1: As Weber
wrote, "the patrimonial state lacks the political and procedural predictability. indispensable
for capitalist development, which is provided by the rational rules of modern bureaucratic
oriented capitalism, and on the lower portion of the matrix composed the two major
types of rent capitalism. The horizontal axis, it was important to note, is not a measure of
state autonomy. Because patrimonial states by definition lack a clear separation between
the private and the official spheres, they cannot be considered autonomous. By focusing
on cross-national differences such as those found in the typology, it was possible to
surprisingly, generally confined their discussions to micro-level behavior within "the
rent- seeking society." and had very little to say about the state structures in which this
behavior most thrived. To the extent that rent-seeking theorists did examine cross-
national differences, they tended to make the mistake of presuming that the degree of rent-
seeking was dependent on one simple variable: the more government intervention in the
economy, the more rent-seeking (Hutchcroft, 1998 pp. 99-102).
two major types of production- oriented capitalism, and on the lower portion of the matrix
comprise the two major types of rent capitalism. The horizontal axis, it was important to
note, was not a measure of state autonomy. Because patrimonial states by definition lacked
a clear separation between the private and the official spheres, they cannot be considered
autonomous (op. cit.).

Weber’s Capitalist Development Framework
State)
Source: Hutchcroft, 1994, 1998)
Thus, it was being argued by this study that Philippine State economic
development, particularly in social housing financing, was a Patrimonial Oligarchic State
(Booty Capitalism) as illustrated in the lower right of the matrix below. Consequently, if the
Philippine State transforms to the upper right or left (either Laissez-faire Capitalism) as a
Regulatory State or Statist Capitalism (Development State), the autonomy of the
Philippine State from the elites and particular classes can be immensely improved and
thereby provide the answer to the major question:

Chapter Five
CONCLUSIONS AND SUGGESTIONS FOR FURTHER

STUDIES
What was the performance of the GFIs (Government Financial Institutions in
financing social housing from 1987 to 2019 as compared to their targets?
In terms of housing finance, the state was argued to be weak as it was not
effective because there was a large gap or failure between the actual result or performance
in termsof housing units produced by the National Shelter Program versus its policies.
The state was weak as it was not effective because there was a large gap or failure
between the actual result or performance in termsof total housing expenditures, and
many housing units of the United Home Lending Program versus its policy/plan.
Furthermore, the state was argued to be weak as it was not effective because the
actual housing loan takeouts by interest rate/loan range granted by the UnitedHome
The lending Program in terms of the loan value, and number of accounts during this period
were minimal for social takeouts versus market housing about the total budget. The state
was weak as it was not effective because the mortgage financing takeouts for social
the housing of the United Home Lending Program in terms of the loan value, and number
of accounts were minimalabout the total budget. The state was weak as it was not
effective because the number of accounts, and loan value granted by the United Home
The LendingProgram was minimal in comparison to the housing needs of the Philippines;
The state was weak as it was not effective because the policy of encouraging the
participation of private banks under the Home Insurance Guaranty Program in peso terms
and number of loan accounts benefited minimally social housing, and more for market
housing; The state was weak as it was not effective because the policy of encouraging the
participation of private developers, and authorizingthem as loan originators by the United
Home Loan Program resulted in the granting of loans with state patronage to a few
particular class or interests as indicated by their huge share in loans granted with
the corresponding low collection efficiency ratio is accepted from 1987 to 1996.
The official goals or policy targets of the National Shelter Program were not met
with tremendous shortages or variances between the planned and actual performance of
the state. The primary objective of providing social housing to the lowest income echelon
of the population was not accomplished. Market housing for more affluent members of
society benefitted much more than social housing as evident in the findings of this study
What factors affected the performance of the Government Financial Institutions?
The planned housing expenditure shortage can be explained through the failure of
the state banks or government financial institutions to stick to their commitment to funding
the housingprogram. As such, public funds intended to fund housing for the poor were
intentionally not released and diverted to other financial programs. The weak state in the
Philippine housing finance can be reflected through the government financial institution’s
reluctance to fund the need housing which was much needed for shelter by millions
of Filipinos. The Social Security System (SSS), the Government Service Insurance System
(GSIS), and the Home Development Mutual Fund (HDMF) committed to releasing from
1993 to 1998 81.4 billion pesos but these government financial institutions releasedonly
41.9 billion pesos or only 51.5 percent (almost one half) of their commitments to the
Unified Home Lending Program. From the year
Performance of the Home Insurance Guaranty Corporation (HIGC): Housing for the
Rich and Not the Poor
“They were not performing well since private banks were profit-oriented. The banks
agreed to join the housing program because of the subsidies given to them by the
government (see Appendix B: Anonymous interview with six (6) senior staff of HDMF
The policy of encouraging private banks to participate in the National Shelter
The program led to thecreation of the Home Insurance Guaranty Corporation (HIGC).
This Government Financial Institution was responsible for guaranteeing mainly for the
private banks to accommodate loans or wholesale or retail to benefit the lowest 30 percent
of the population. The figures in this study showed that this was not the case.
The planned output of the Home Insurance Guaranty Corporation were 33,921 units in
1993and 44,326 units in 1994. In 1995, 1996, 1997, and 1998, the planned output was
74,256 units,73,167 units, 85,400 units, and 107,176 units respectively.
These totaled 418,254 units from 1993 to 1998. The actual units produced were
363,000 units for the same period averaging 60,500 units per year. These resulted in a
shortage of 13 percent versus the planned output. The social housing component
(P180,000 and below) figured 72,600 units from 1993 to 1998 averaging 12,100 units per
year which shared only 20 percent of the total actual output for the same period. The above
P180,000 to P375,000 loan range showed a figure of 181,500 units averaging 30,250 units
for the same period. This category captured 50 percent of the total housing output
guaranteed by the program. The above P375,000 to P3,000,000 category posted108,900
units averaging 18,150 units per year for the same period. These resulted in a share of 30
percent out of the total output of 363,000 units from 1993 to 1998
From the 363,000 loans in peso terms generated by the program, only 7.5 percent
went to social housing (P180,000 and below) while the above P180,000 to P375,000 loan
bracket was able to get 19 percent of the total loan. The balance of the portfolio was
loans ranging from above P375,000 to P3million which captured a hefty share of 74.5
percent of the guarantee line. Even from 2010 to 2015, the HIGC guaranteed P222.026
billion. worth of housing loans extended by private commercial and rural banks as well as
other financing companies equivalent to about 127,500 housing units. Also, from 2016 to
2019, HIGC added 112,710 housing units (see Table 7) which catered more to the
economic and upper echelons of society.
a complex between the industrial and banking sector. He wrote:
“Not only do the landed families dominate the manufacturing sector; they also control the
leading private commercial banks in the country. Of the top 10 local private banks in 1986,
six, including the largest private banks in 1986, including the oldest and largest, the Bank
of the Philippine Islands, was controlled by landed capitalist families (Rivera, 1994,
p.50).
In other words, the main beneficiaries which were supposed to be the social
housing categorywas only able to benefit a minimal amount or share of only 7.5 percent
of the total guarantee line while the bulk of the guarantee line went to the middle and upper
the class bracket of Philippine society. Again, guarantee money designed for the poor went
to the coffers of the upper classes for housing.
Profits and Interest Rates in the Philippine Financial System
In this section, the structure of the State and the Philippine Financial System from
1987 to1998 will be analyzed as it relates to the Philippine housing finance sector.
The financial system in the Philippines provides enormous profits to those financial
institutions and banks that were primarily in the business of banking for the sake of banking
profits. According to a World Bank study (World Bank, 1988: iii 73), pre-tax profit
margins in the Philippines were roughly 300 percent higher than the average of such
margins in eight others.The World Bank’s analysis concentrates on the distinction that
must be made between the profitstructures of the stronger and weaker banks in the
Philippine banking system: the more efficient banks pricing their products and services
concerning the cost structure of the smaller banks,a practice which effectively enabled
them to capture higher profits. In early 1991, savings deposit rates were at 11 percent per
annum, while prime lending rates surpassed 23 percent interest per annum.
Analysis of interest rates from 1987 to 1998 would show the samepattern of high
spreads as were in 1991. These large spreads guarantee high levels of profitabilityfor
financial institutions and banks. The interest spread to savings ratio was 196 percent in
1987 and 290 percent in 1988. In 1989, the interest spread to savings ratio was 215 percent
and dropped gradually to 90 percent in 1997. Nevertheless, the spreads were still too high
in the banking system.
Philippine banks were highly profit-oriented from 1987 to 1998. As such, the
policy of encouraging private banks through guarantees by the Home Insurance Guaranty
Corporations only resulted to loan portfolios with higher loan ranges and higher interest
rates. Moreover, the state which was supposed to guarantee social housing for the lowest
30 percent income bracket of Filipinos granted a huge majority of its housing loan
portfolios to market housing (upper-classbracket) with higher interest rates. Thus,
guaranteeing high profits for the state banks except for the Home Mortgage Finance
Corporation which was almost milked to death in 1995 by private developers.
However, with improvements in monetary policy and lowering lending rates in
2017, rising expansion began to put a strain on the BSP's accommodative money-related
strategy, and the swelling rate outperformed in mid-2018 the 4 percent roof of the swelling
objective reach. Credit proceeded with its quick development in 2017 however facilitated
in the final quarter. The pressing factor from the increasing swelling rate expanded in 2017
while the key arrangement rate stayed unaltered. Regardless of a recently rebased shopper
value record (CPI) arrangement, the feature expansion rate moved from a normal of 1.3
percent in 2016 to 2.9 percent in 2017, preceding arriving at 4.3 percent in March 2018,
which was past the roof of the BSP's swelling objective reach (Figure 11). Food expansion
drove practically 50% of the CPI swelling expansion in 2017 due to more exorbitant costs
of fish, meat, and organic product items. Energy costs rose to pair with the worldwide
expansion in unrefined petroleum costs and changes in nearby power costs. Barring the
unstable food and energy things, center swelling likewise rose pointedly, mostly because
of the pass-through impact of a more vulnerable peso. It could likewise demonstrate
expanding request side pressing factor because of the economy working at its latent
capacity, which could be an early indication of the economy overheating. Regardless of
the rising domestic inflationary pressing factor and the three vertical changes of the
U.S. Government Funds rate in 2017, the BSP financial board kept the strategy rate fixed
at 3.0 percent consistently, while it brought down the save prerequisite proportion by one
rate point as of March 2, 2018.18
Credit development stayed solid in 2017. Complete credit development sped up
from a yearly normal of 14.3 percent in 2016 to 17.8 percent in 2017, reflected generally
by domestic liquidity (M3) increment from a normal of 12.5 percent year-on-year in 2016
to a normal of 13.2 percent year-on-year in 2017. Also, credit to firms developed from
13.5 percent year-on-year in 2016 to 17.4 percent year-on-year in 2017, while the
development in family advances was supported at a yearly pace of 20.3 percent in 2017,
which was marginally lower than the 20.5 percent expansion in 2016 (Figure 12). The
sectoral piece of firms' advance portfolios has remained extensively unaltered, as credit
development kept on preferring the land and discount and retail exchange areas. Among
utilization advances, the biggest credit expansion in 2017 was for engine vehicle advances,
which developed at a yearly pace of 24.6 percent (51.0 percent of all-out utilization
advances), trailed by a 19.1 percent (20.5 percent) yearly expansion in credit for
compensation-based advances and 16.5 percent (24.9 percent) for Mastercard debt.19 The
credit-to-GDP proportion proceeded to consistently ascend from a normal of 61.0 percent
in 2016 to a normal of 64.6 percent in 2017.
The Philippines' monetary framework stays steady and versatile. The portion of
non-performing credits declined from a normal of 2.2 percent of all-out advances in 2016
to 1.9 percent in 2017. Philippine banks were very much promoted, with an absolute
capital sufficiency proportion at 15.3 in September 2017, well over the 10%
administrative
least. Moreover, banks' profit from value somewhat diminished from a normal of 10.0
percent in 2016 to 9.9 percent in 2017. Additionally, the portion of interest payments to
add up to working pay expanded from a normal of 73.1 percent in 2016 to 74.7 percent in
2017, while net interest edges stayed unaltered at a normal of 3.3 percent liquidity in the
the financial system, and observed that the BSP had ample scope to mitigate the potential
liquidity impact of a phased reduction in the reserve requirement via offsetting auction-
based monetary operations.
Nevertheless, despite the improvements in the Philippine Financial System, private
banks' performance in providing social housing remained small. As such, the market
housing approach by the Philippines to social housing was a failure.

What was the nature of the Philippine state which affected the financing of social
houses? Answering the central question: Why was Philippine socio-economic
development particularly in social houses financing in such a longstanding
lag?
Private banks, as well as Government Financial Institutions, were profit-oriented.
The beneficiaries of huge loans were a few favored particular private developers which
had bad collection efficiency ratios.
The findings and evidence would imply that the state was weak in terms of
implementing its official goals and it was not autonomous from a favored particular group
who had been able to benefit from the housing program at the expense of the state which
accumulated huge bad debts. It cannot be understood or reconcilable why the Government
Financial Institutions persisted to lend billions of pesos loans to a favored few who in the
first place proved to be bad debtors as evident in their poor collection efficiency ratios.
Moreover, these particular interest groups milked the funds of the state banks and it pushed
the National Home Mortgage Finance Corporation to the brink of bankruptcy.
The Home Development Mutual Fund, the National Home Mortgage
Finance Corporation,the Social Security System, and the Government Service Insurance
System (under the United Home Lending Program) granted a total of 42 billion pesos in
loans to private developers, and private bankers from 1987 to 1996. Ranked as the number
one of the largest recipients of loans was C&P Homes owned by Manuel Villar with 7.7
billion pesos. Villar’s group captured 18.50 percent of the total loan released. Ranked
number two largest recipients were the Extraordinary Development Corporation with 2.7
billion and captured 6.8 percent of the total loan released.
The E.B. Villarosa Group ranked as number three largest recipient of loans
received 2.5 billion pesos equivalent to 6.4 percent of total loans released. The Campos
Group ranked as number four largest recipient with .976 billion pesos equivalent to 2.3
percent of the total loan released.to 1.7 percent of total loan released. The BPI Family Bank
of the Ayala family ranked number eight and received .498 billion pesos in loans
equivalent to 1.2 percent of the total loan released. Stateland Investment ranked number
nine with .476 billion pesos in loans received to 1.1 percent of total loans granted. The
Choa Group received .417 billion pesos equivalent to 1 percent of the total loan released.
The Group ranked number ten. The remaining balance went to other entities which were
not identified in the data and this is equivalent to 24.26 billion pesos or 57.10 percent of
the total loan released. The United Home Lending Program through the National Home
Mortgage Finance Corporation and the Home Development Mutual Fund provided loan
takeout amounting to 2.1 billion pesos to C&P Homes from 1987 to the first semester of
1992 despite a low collection efficiency rating of 60.8 percent during this period. These
Government Financial Institutions alsogranted further loans to C&P Homes worth 5.6
billion pesos from the first semester of 1992 to 1996 despite the much lower collection
efficiency ratio of 39.3 percent during this period.
The Extraordinary Development Corporation received a loan of 368.99 million
pesos from 1987 to the first semester of 1992 despite its loan efficiency ratio of 59.1
percent from 1987 to the first semester of 1992. However, surprisingly, it was given a huge
loan takeout which jumpedto 2.498 billion pesos during the second semester of 1992 to
1996 despite its low collection efficiency ratio of 38.2 percent. The Campos Group
received .976 billion pesos in loans despite its poor collection efficiency ratio of 58.2
percent from 1987 to the first semester of 1992 and the Baes Group with a low collection
efficiency ratio of 37.1 percent from the second semester of 1992 to 1996.able to get Php
800 billion or 19 percent of the total loan.
Thus, it was very clear that these were favored loans to a particularistic class since
these loans were renewed even though their collection efficiency ratios were low.
Historically, although it was back during the Marcos regime, Rivera (1994) also
mentioned in his study that the affluent class as represented by local manufacturers availed
of low-interest, long-term loans offered by government financial institutions (GFIs) and
these had proven to be an indispensable source of capital for them.
including Chinese-Filipino capitalists have availed themselves of this important resource.
In particular, several textiles, cement, fertilizer, and pulp and paper companies
received substantial loans from GFIs like the Development Bank of the Philippines (DBP),
the Philippine National Bank (PNB), the National Investment and Development
Corporation (NIDC), and the Government Service Insurance System (GSIS) (Rivera,
1994, pp, 57-58).”
1994, p.58).
Insurance System (GSIS), was also the source of funds for the pet projects of Marcos and
his cronies. Manapat (1991) writes: “The majority of investments and loans of the GSIS
in 1971 were policy, salary, and housing loans to GSIS members. These loans represented
82% of GSIS investments. These loans to members, however, had dramatically declined
by 1980. Housing loans for members, for example, were phased out. But during the same
period, loans and investments of the GSIS in Marcos-connected companies and Imelda-
inspired projects rose to USD843 million or 65% of the USD 1.3 billion the GSIS earned
as income by the end of 1980. The CDCP conglomerate of Cuenca was a constant recipient
of GSIS money, from the start of the construction boom until the time that this
conglomerate collapsed (Manapat 1991, p. 372).
Another factor to consider was that the term presidents after the Marcos regime
were limited to only six (6) years. As such, there can be no continuity for socio- economic
development particularly in social housing. However, why was it that only a meager one
percent of the budget was allocated to housing? Again, based on the findings of
Villacorta (1994) as based on the study of the Ateneo Center for Policy Studies,
Congressmen themselves belong to the affluent class. As such, how can you expect the
The budget for housing to be increased since it was also in competition for their “rich”
agenda.
The social housing finance problem in the Philippines cannot be solved if the
The budget will continue to be that small at one percent and the implication was that the
Philippine State was not autonomous from certain particularistic classes which included
The House of Representatives controlled the budget and policies of the government.
As the research of this study was exploratory descriptive design, the researcher
went to the HDMF office in Makati on July 1999 and was able to gather first-
hand documents from them regarding those favored developers that we're able to borrow
money from National Home Mortgage Finance Corporation (NHMFC) which went
bankrupt since these favored developers were not able to pay the bulk of these loans as
proven through their low collection efficiency ratios. Sad to say, it was during the
administration of Corazon Cojuangco Aquino and Fidel Ramos from 1987 to 1996 (see
Table 4b).
Marcos had his cronies as well as Corazon Aquino and Fidel Ramos as can be
implied in the distribution of favored loans with low collection efficiency ratios from
1987 to 1996 and number one on the list was the Villar family. Estrada had his
cronies too but one of them turned around and publicly announced the corruption of
Estrada in the “jueteng” issue that led to his downfall. By the way, although Estrada had
A short stint, his performance in housing was better than the Cory Aquino and Ramos
Administration combined. Also, Noynoy Aquino had his cronies too such as the ex-
PNP chief that led to the SAF 42 scandal which gave a black tint to his administration.
Although Benigno C. Aquino III was a good bureaucrat and was also commendable in
his housing program, he was also a member of the rich and affluent Cojuangco family.
He could have increased the budget for housing after the SIN taxes were approved (since
there was a huge increase in the budget due to SIN taxes) but why did he not?
The answer can again be speculative since he was also a class of his own
(sui generis) as part of the “elite.” It can only be implied that he did not push for the
bigger budget for housing since his priority was for economic development which
favored the “Capitalist class” and hoping for the spiraling down of economic progress to
the poor.
Finally, Duterte had also a good performance in the housing program comparable
to the previous administration but it was not enough compared to the huge gap of
housing needs for the poor. When the TRAIN law was approved, again, there was a huge
increase in the Philippine Fiscal Budget but until now he did not increase the budget
for the poor from a mere one percent more or less. Although he pronounced his war
against the old oligarchs, just like Marcos, he created his cronies. Much of the
budget was used to increase the PNP and the AFP salaries to protect his regime from a
potential coup or rebellion. He was also accused by the United Nations of violating
human rights for killing thousands of suspected drug addicts during the first few months
of his administration. He also imprisoned his political enemies such as Senator Laila de
Lima but released from jail Enrile, Estrada, and Revilla who were accused of graft.
These favors for them certainly came with certain conditions such as siding with him.
Many people can be called his cronies such as Bong Go, Peter Lim, and Dennis Uy, the
chairman of DITO Telecommunity, Inc. which broke the telecommunications oligopoly
of Pangilinan’s PLDT and Ayala’s Globe. Also, in his cabinet (see appendix), it can be
found that these were the people who were personally linked as friends in childhood or
were former classmates or dormitory mates.
Even going back to an earlier time from 1935, when the Philippines turned into a
semi-autonomous province, the conduct of presidents, and other amazing political and
financial elites have intensely affected the nature of the country's vote-based legislative
issues and governance. The Philippines was a unitary state with a champ bring home all
the glory discretionary framework, an administration that activates enormous control over
spending plans and arrangements, and intrinsically powerless ideological groups.
Subsequently, the president assumes a focal part in deciding strategy results, just as the
standards and conduct that shape governmental issues and administration (Timberman,
2019).
The second significant impact on vote-based system in the Philippines was the
country's amazingly versatile political and monetary tip top. The president is restricted to
a solitary six-year term, so the force and impact of individual presidents were passing.
Conversely, political and business families like the Marcoses, Cojuangcos, Aquinos, and
Ayalas—to give some examples—have had an imperative life span and adaptability. They
apply an amazing impact over races, enactment, policymaking, administrative bodies,
statute, and the dispersion of government assets (op. cit.).
For quite a long time, this elite class has obstructed the improvement of a weak
state by restricting the public authority's financial base and co-picking, adulterating, or
scaring the administration. It had hindered and misshaped the Philippine economy,
leaning toward arrangement and assurance over financial rivalry, and has been moderate
and particular in opening the economy to unfamiliar rivalry. Since elites influenced
administrative and policymaking measures, progressive governments had neglected to
embrace and execute financial arrangements that locate the requirements of poor people
and the working class. With a Gini coefficient of 0.43, the Philippines has for some time
been quite possibly the most inconsistent social order in Asia, with probably the most
the significant level of destitution frequency among Asia's developing economies (op.cit.).
He wrote: “Both the landed and non-landed segments of the manufacturing class, including
Chinese-Filipino capitalists have availed themselves of this important resource. In
particular, many textile, cement, fertilizer, and pulp and paper companies received
58).”
1994, p.58).
Insurance System (GSIS), was also the source of funds for the pet projects of Marcos and
his cronies.
According to Habito (2021) who was a former NEDA director he had looked
at the nine countries and based on Asian Development (ADB), the original five ASEAN
members (Indonesia, Malaysia, the Philippines, Singapore, and Thailand), plus

Bangladesh, Mongolia, Nepal, and Sri Lanka. The numbers show that over the 15-year
period 2000-2014, public expenditures on housing averaged 0.75 percent of gross
domestic product for the other countries, ranging from Bangladesh’s 0.25 percent to
Singapore’s 1.6 percent. The Philippines, the smallest public housing spender in the
bunch spent only 0.12 percent of GDP, even less than half of Bangladesh’s
proportionate allocation, and less than one-sixth of the group (Habito, 2017). Again, the
question was: Why did the Philippines prefer a minimal budget for something very
important to the country’s citizens especially the poor?
Furthermore, the research written by Whitehead & Tang (2019) distinguished three
models of reasonable housing conveyance utilized in Asia: : 1 Public sector-led. Solid state
intercession of the government in reasonable housing supply with a well-developed
monetary framework (Hong Kong, Singapore, South Korea). This study was central to
the high-quality arrangement of reasonable housing in Hong Kong and Singapore. Public
mediation moreover ruled the position in South Korea for decades after the war. Be that
as it may, in later times there had been a declining part for South Korea’s central
government (op. cit.).2 Private sector-led. Strong private segment inclusion for reasonable
housing supply, with a created budgetary framework for both developers and customers.
This bunch includes China, Japan, Malaysia, and Thailand, all of whom have (or, within
the case of Japan, had) significant affordable housing approaches. China is atypical in this
bunch since it has government-owned land, but private players had provided excellent
entrepreneurial skills in providing social housing in their country (op. cit.).3) Informal
delivery model. Dominated by informal housing systems and underdeveloped financial
systems, even though there were some government policies in place. This group included
India, Indonesia, Pakistan, the Philippines, and Vietnam, as well as other countries not
included in the study (such as Bangladesh) (op. cit.).
Thus, in most countries that were successful in their social housing programs
such as Hongkong, Singapore, and South Korea (except Hongkong which is a sub- system
of China) which were coined by Hutchcroft as “The Developmental States” within
Weber’s State and Capitalist Development framework was led by the government not
only in terms of an organized bureaucracy with a long-term plan but also in providing a
realistic and bigger budget for social housing (see Figure 6). Moreover, in South Korea,
their big government-owned banks GFIs also had done their fair share in social housing
financing aside from a well-developed private involvement in the housing sector.
On the other hand, the private sector-led countries such as China, Japan, Malaysia
and Thailand, their “enabling state” framework worked because their countries were free
from predatory oligarchs and particularistic classes that prey on their” states.” There was
an “embedded pact” (as coined by Evans, 1994) between the State and the private capitalist
class for socio-economic development and called these countries “Developmental
States” similar to the “Regulatory State” of Hutchcroft’s framework as based on Weber’s
Theory of the State and Capitalist Development. In addition, their government also spent
much bigger on social housing than the Philippines because of their superior economic
development undisrupted by elites and patrimonial influences (see Figure 6 for public
housing budgets as a percentage of GDP in the ASEAN).
Finally, the “Informal Delivery Model” as coined by Whitehead & Tang (2019)
was characterized by informal housing systems and underdeveloped financial systems
even with some state policies in place. According to Whitehead & Tang (2019), these
groups included India, Indonesia, the Philippines, and Vietnam as well as other countries
not included in the study such as Bangladesh. However, among these countries, the
The Philippines had a very poor performance in closing the gap for the 6.2 million housing
needs of its constituents particularly the poor ones. Also, the Philippines had the lowest
public budget for social housing with only 0.12 percent (%) of GDP while the average
public spending for other countries in the ASEAN was 0.75 percent from 2000 to 2014.
Even Bangladesh had 0.25 percent (%) which was even twice higher than the Philippines.
Furthermore, aside from the patrimonial nature of the Philippine State, the country
did not have a long-term socio-economic development wherein other country such as
Malaysia, Taiwan, South Korea, and China wherein whoever is the head of state, the
Bureaucracy would implement it. However, in the Philippines, the President only had a
six (6) year term and cannot be re-elected under the 1987 constitution. As such, whenever
a new head of state was elected, they brought with them their economic agenda which
usually differs from the previous administrations. As a result, socio-economic
development in the country fluctuated from time to time (see Figure 7).
Development in the Philippines had not been exceptionally comprehensive.
Further, monetary versatility, for example taking off from destitution and moving
upwards in the working class, has been restricted. As demonstrated in Figure 2, the
consolidated complete portion of the moderate poor and the financially powerless had
stayed consistent at around 50% of the populace throughout the previous 20 years, while
the portion of the monetarily secure has expanded humbly in the Philippines comparative
with adjoining nations. Also, just 9.2 percent of the Philippine populace had a for every
capita pay over the US$15/day "worldwide center pay" line in 2015 contrasted with
Malaysia (65.7 percent), Thailand (35.4 percent), and China (19.4 percent).
Due to this disparity between the rich and the poor and without a strong middle
class in the Philippines, it became apparent that the top five (5) percent of the population
were the “king-makers” particularly in presidential elections as well as those in Congress
(see Villacorta, 1994). Unfortunately, the “pawns” were the poor majority who were
supposed to be the “boss” as coined by former president Benigno Cojuangco III in his
Inaugural address after his election on June 30, 2010.
Furthermore, the poor majority were the ones who needed affordable or social
housing but Part 1 of this chapter proved that it was the middle and upper echelons of
society who benefited more from the housing program of the government. It was a state
that played “booty capitalism” wherein the state was not autonomous from the
oligarchs, cronies, and other particularistic classes that preyed on it.
Thus, it was argued by this study using the State and Capitalist Development
Framework as shown illustrated as had already been presented in Chapter 1: As Weber
wrote, "the patrimonial state lacks the political and procedural predictability. indispensable
for capitalist development, which is provided by the rational rules of modern bureaucratic
oriented capitalism, and on the lower portion of the matrix composed the two major types
of rent capitalism. The horizontal axis, it was important to note, is not a measure of state
autonomy. Because patrimonial states by definition lack a clear separation between the
private and the official spheres, they cannot be considered autonomous. By focusing on
cross-national differences such as those found in the typology, it was possible to
surprisingly, generally confined their discussions to micro-level behavior within "the rent-
seeking society." and had very little to say about the state structures in which this behavior
most thrived. To the extent that rent-seeking theorists did examine cross- national
differences, they tended to make the mistake of presuming that the degree of rent- seeking
was dependent on one simple variable: the more government intervention in the economy,
the more rent-seeking (Hutchcroft, 1998 pp. 99-102).
two major types of production- oriented capitalism, and on the lower portion of the matrix
comprise the two major types of rent capitalism. The horizontal axis, it was important to
note, was not a measure of state autonomy. Because patrimonial states by definition lacked
a clear separation between the private and the official spheres, they cannot be considered
autonomous (op. cit.).
Thus, it was being argued by this study that Philippine State economic development
particularly in social housing financing was a Patrimonial Oligarchic State (Booty
Capitalism) as illustrated in the lower right of the matrix below. Consequently, if the
Philippine State transforms to the upper right or left (either Laissez-faire Capitalism) as a
Regulatory State or Statist Capitalism (Development State), the autonomy of the

Philippine State from the elites and particular classes can be immensely improved and
thereby provide the answer to the major question: Why was it that Philippine socio-
economic development particularly in social housing financing in such a long-standing
lag?
Suggestions for Further Studies
Since this study is exploratory descriptive in design, a part of the picture was
already studied and researched upon but the central question of the study was:
Why was Philippine socio-economic development particularly in social houses
financing in such a longstanding lag? The researcher attempted to answer the “what”
the question in terms of the performance of the Philippine State in social houses
financing and concluded that the State was weak in pursuing to finance social housing in
the Philippines from 1987 to 2019. However, what was the reason that it failed from
the standpoint of class analysis or from the particularistic class analysis was somewhat
not completely answered in terms of the continuity from the Marcos years to the Duterte
administration.
As such, it is suggested that more research or studies should be conducted in
order to determine the nature of the Philippine state in social houses finance. Probably
after the pandemic, personal interviews with government officials who had first hand
knowledge on the favored cronies and affluent class during the time of Arroyo, Aquino,
and Duterte should further be conducted to improve the research gap in this
study.
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APPENDICES
APPENDIX A
Interview Questions Guide for HDMF and HUDCC for six (6) Senior Staff (anonymous)
1. Why were the social housing targets not met?
2. Where there some particular people who received favored loans? Who were they?
3. How much were the loans provided to these people or private developers and how much
were the collection efficiency ratios?
4.Why were these private developers given favored loans by the billions and yet were
Renewed by even much bigger amounts despite their low collection efficiency ratios?
5.What was the performance of the private banks through the home guaranty program? and
6. In the over-all, do you think the state or the government was giving enough budget in
order to provide solution to the huge gap in housing supply especially for the poor
majority? Why do you think they were not providing the right budget?
APPENDIX B INTERVIEW RESULTS
On July 20, 1999 on a Tuesday, the researcher went to the headquarters of HDMC and
HUDCC..in Makati City, Metro-Manila
Before the interview, the researcher brought a letter of authorization from my
former adviser, the late Dr. Edberto Villegas that the researcher was Ph.D. candidate from
DLSU-Manila and the topic of the thesis was about social housing Financing. Thus, this is
the reason why that these anonymous senior officers of HDMF and HUDCC agreed for
these interviews (The interviewees sometimes answered in tagalog-english (taglish) but the
researcher translated it into English).
1. Why were the social housing targets not met?
Common Answer:
“Government budget was not enough to provide for the deficit in housing supply especially
for the poor.
“Most of the huge loans went to some favored people which caused the bankrupty of the
National Home Mortgage Finance Corporation.”
“ The bureaucracy was not efficient enough to administer the housing program and certain
flaws uch as giving subsidies to the the private banks thru the Home Guaranty Program
must be corrected.”
2. Where there some particular people who received favored loans? Who were they?
Common Answer:
“ Yes, there were some favored particular people or developers who were closed to the
administration and they were well connected with the powers that be, we have no choice but
to approve them.”
At this point, (six senior staff of HDMF and HUDCC, showed me a document that listed the
private developers, the loans received and their collection efficiency ratios. These were
confidential documents so they told me, I can just copy them in my own handwriting since
these were sensitive documents and they do not want to lose their jobs. So I agreed and copied
the document in my own handwritin as can be seen in Table 4b in the results. They swore
that the data were authentic.
3. How much were the loans provided to these people or private developers and how much
were the collection efficiency ratios?
They did not answer these question since it was already answered io the document they
showed to me.
4.Why were these private developers given favored loans by the billions and yet were
renewed by even much bigger amounts despite their low collection efficiency ratios?
Common Answer: They said that their answer would be the same as their answer to question
# 2.
5.What was the performance of the private banks through the home guaranty program? and
Common Answer:
“They were not performing well since private banks were profit-oriented. The banks agreed
to join the housing program because of the subsidies givent to them by the government.”
Then they gave a copy of the document regarding the performance of private banks (see
analysis and discussion on the performance of the private banks in social housing.
6. In the over-all, do you think the state or the government was giving enough budget in
order to provide solution to the huge gap in housing supply especially for the poor
majority? Why do you think they were not providing the right budget?
Common Answer:
“No, the budget for social housing was not enough for a long long time since even the HDMF
would prefer to invest their money in profitable real estate ventures and other high earning
investments.”
“ We feel that HDMF should be profitable so that it will be self-sustaining in the long-run.”
“ Since our congress and even our presidents belong to the upper class and there was a lot
of pressure for the congressmen and senators to increase the housing budget but the
government prefer the switch to market housing since this will be too heavy for the budget
and free huge funds for more profitable ventures such as exports and other investments.”
End of Interview
Finally, the researchers asked them if they can be able to be quoted with their names
and position in the interviews but begged not to include their names and to remain
anonymous since they might lose their jobs. So the researcher thanked them for their time
APPENDIX C
This document was personally handed to the researcher by the HUDCC staff on July 20,
1999 There were no internet data such as this during that time.
Government Financial Institutions and Housing Policies and Programs
The State housing finance responsibility was assigned to three key government financial
institutions: The Home Development Mutual Fund (HDMF), the Social Security System (SSS),
and the Government Service Insurance System (GSIS). Among the three agencies, the Home
Development Mutual Fund or Pag-IBIG Fund played a key role in the National Shelter Program.
The Social Security System, and the Government Service Insurance System contributed funds to
the Home Development Mutual Fund for implementation in housing finance under the United
Home Lending Program (UHLP).
Thus, the Pag-IBIG Fund or Home Development Mutual Fund, the premier state housing finance
institution (together with SSS and GSIS with supportive roles under the United Home Lending
Program managed by HDMF) in relation to the housing policies, and the organizational set-up of
the National Shelter Program would be a significant institution to focus on this study.
The National Shelter Program (NSP), which regulates housing production, regulation and
financing, is the Philippines’ banner program for low-income housing provision. The NSP divided
housing into ‘socialized’ (valued at less than USD 6,000, targeted at households up to the 30th
income percentile) and ‘economic’ housing units (valued at up to USD 40,000, targeted at
households up to the 50th income percentile).
Current housing efforts remain inadequate, with figures showing an acute housing shortage
estimated at over one million units – still probably a gross underestimate. On average, the NSP has
only delivered 26 per cent of its target, or less than 10 per cent of total housing need. Moreover,
the housing backlog is likely to worsen due to worsening poverty and increasing urbanization.
Several factors had contributed to hindering the outreach and sustainability of the NSP programs.
First, following the Philippines’ general decentralization trend, the UDHA makes local
government units (LGUs) responsible for being the UDHA’s main implementer. But most LGUs
lack the capacity and resources for shelter and urban management. Moreover, LGUs are not often
keen to accept low-income migrants for relocation, due to limited social services and economic
opportunities, and housing maintenance costs.
Second, resettlement costs were increasing, increasing LGUs’ dependence on national subsidies.
Lack of coordination between the lead national agency on resettlement – the National Housing
Authority (NHA), LGUs and other national agencies further hinders the success of resettlement
projects. Another problem is beneficiaries abandoning or transferring the home-lots they were
awarded, due to a lack of opportunities and services.

Third, identifying suitable beneficiaries of government housing programs was difficult. LGUs lack
incentives to develop databases for beneficiary registration, so the awarding of home-lots was often
ad hoc and politically dependent. Tracking down the awardees of housing units had also proven
difficult, due to lack of a monitoring system.
Fourth, under the UDHA, both the government and the community must eradicate professional
squatters and squatting syndicates. But actual enforcement – arrests and prosecutions, had been
sloppy, partly because of weak coordination between authorities and communities.
Fifth, the awarding of home-lots is often delayed by bureaucratic legalism and valuation issues.
The establishment of eviction guidelines for urban poor settlements has been one of the highlights
of the UDHA, providing informal settlers with some legal rights to the land they occupy. But these
rights are sometimes disregarded, specifically in private lands, and monitoring has been weak,
because no central agency or quasi-judicial body exists to ensure compliance.
Sixth, housing finance programs have limited outreach. For example, the Social Housing Finance
Corporation‘s ‘Community Mortgage Program’ had been helpful, but lacks sufficient funding to
expand operations. On the other hand, the Home Development Mutual Fund’s ‘Socialized Loan
Program’, geared towards salaried workers, has not greatly benefited the poor
Not only does the Philippines had one of the lowest mortgage penetration ratios, but public
expenditure on housing was one of the lowest in Asia, at less than 0.1 per cent of GDP on average.
The aim of CISFA was to strengthen the NSP through regular and higher annual budget
appropriations between 1995-2002, but only 52 per cent of this allotted increase in NSP funding
was actually released. The entry of housing microfinance had been limited
Moreover, private sector funds remained considerably untapped. The UDHA intended to entice
private investment in socialized housing through tax exemptions and regulation, but the
incentives’s benefits were not clear. The UDHA also required developers without socialized
housing projects to set aside 20 per cent for low-income housing programs, but compliance had
not been adequately monitored.For the housing sector to be more responsive to the needs of the
poor, several key reforms were required.
First, a reliable and sustainable poverty database system was needed at the local level. with clear
and measurable parameters to identify suitable beneficiaries. The Department Of Interior and Local
Government was currently working on a monitoring system to generate baseline information on
poverty; this system could also be adopted for shelter programs.
Related to this, establishing a national resettlement policy ensured a common framework for
resettlement approaches, housing packages, and entitlement. NHA’s role as lead agency should be
strengthened, with funds from the various resettlement agencies integrated into a common fund.
Second, a system of incentives should have encouraged and capacitate LGUs to perform their roles
in shelter as identified in the UDHA. LGUs and the national police should also be empowered to
more effectively curtail squatting syndicates.
Third, the Philippine government should develop a public-private partnership as a key strategy to
resettlement projects. The tax incentive scheme for shelter needs to rationalize and made more
responsive. At the same time, the government must increase public expenditure on housing,
ensuring that the subsidy scheme is transparent and well-targeted.
Finally, NSP success required a favorable environment for housing finance. Thus, the government
must ensure the financial health of state-owned housing finance institutions, and encourage the
entry of housing microfinance institutions, including foreign-based microfinance. Scale and
sustainability will only come through developed capital markets, not continuously using
government funds. On the demand side, government should try to improve the bankability of the
poor through community and livelihood development programs.
The Home Development Mutual Fund
The Home Development Mutual Fund, more popularly known as Pag-IBIG Fund was created on
June 11, 1978 by virtue of Presidential Decree 1530. The fund was basically conceptualized to
address two of the country’s basic concerns: generation of savings and provision of shelter for the
workers.
Funds generated under Presidential Decree 1530 were administered by two agencies: The Social
Security System (SSS) from private employees; and the Government Service Insurance System
(GSIS) from government workers. Contributions were pegged at 1% of Fund Salary which
comprised of the basic salary and cost of living allowance of employees.
On March 1, 1979, Executive Order 527 took effect which transferred the administration of the
fund to the National Home Mortgage Finance Corporation (NHMFC). NHMFC was one of the
operating agencies of the then Ministry of Human Settlements.
To further strengthen the stability and viability of the two funds, Executive Order 538 was issued
on June 4. 1979. The said order merged the two funds into what is now known as Pag- IBIG Fund.
On December 14, 1980, Presidential Decree 1530 was amended by P.D. 1752. This made Pag-
IBIG a corporation, independent from NHMFC, and made membership mandatory for all SSS and
GSIS member-employees.
Due to the clamor from some sectors, Pag-IBIG contributions were suspended from May to July
1986. However, on August 1, 1986, President Corazon C.Aquino, recognizing the merits of the
Fund’s existence, directed its resumption under Executive Order No. 35.
January 1, 1987 marked the return of Pag-IBIG to a voluntary program under Executive Order
90. The next eight years witnessed the growth of Pag-IBIG as a voluntary fund. On June 17, 1994,
91. President Fidel V. Ramos signed Republic Act 7742 which reverted the nature of Pag- IBIG
92. membership to mandatory. Covered by the new law which became effective on January 1, 1995,
93. are SSS and GSIS members with monthly compensation of P4,000 and above.
However, employees earning below P4,000 have the option to sign up with the fund as voluntary
members. Pag-IBIG is an acronym which stands for Pagtulungan, Ikaw, Bangko, Industriya at
Gobyerno. In effect, Pag-IBIG harnesses these four sectors of our society to provide its members
with adequate housing through an effective savings scheme.(Based on interviews and documents
provided by HDMF and HUDCC, 1999).
The Ramos State National Shelter Program 1993 to 1998
1993-1998 Estimated Housing Need
The shelter problem in the Philippines was characterized by a shortage of 3.72 million housing
units for the period covering 1993 to 1998. This was broken down into the following components:
1. A backlog of 873,000 units composed of:
 444,000 households doubling-up with other households in view of inability to
 afford separate dwelling units;
 422,000 dwelling units needed to replace those occupied by households

located
 in danger areas or those living on land which was needed by government for a
 major infrastructure project or in areas where there was a court order for
eviction/demolition;
 7,000 housing units for individuals or households living in parks, along
 sidewalks, and all those without any form of shelter.
2. A future need of 2,853,000 units composed of:
 1,498,000 new dwelling units needed to supply the demand of new

households
 formed; and
 1,355,000 housing units needed for upgrading substandard houses, tenure
 status, etc.
Funding Requirements
At an average cost of P150,000 per dwelling unit, a total of P558.6 billion pesos were needed to
finance the housing need of 3.72 million units.
The Housing and Urban Development Coordinating Council (HUDCC) decided to target
1,239,702 homes for the same period.
Legal Mandates
The implementation of the National Shelter Program (NSP) was guided by the following Executive
Issuances, Laws, etc.
Executive Order No. 90

Executive Order 90 issued on December 17, 1986 created the Housing Urban Development
Coordinating Council (HUDCC) and identified the government agencies essential in the
implementation of the NSP and defined their respective functions. EO 90 mandates the HUDCC
to formulate goals and strategies for housing at the national level; coordinate agencies in housing;
monitor housing projects; encourage private sector participation; propose new legislation;
formulate policies for asset disposition; and ensure the implementation of the National Shelter
Program (NSP).
The National Shelter Program was a comprehensive program that aims to provide the lowest 30
percent of the income population with adequate housing facilities through affordable housing
packages.
Executive Order No. 357
Executive Order No. 357 signed on May 24, 1989 further strengthens the existing coordinating
mechanism of the National Shelter Program. This order mandates the HUDCC to exercise overall
administrative supervision over the housing agencies, i.e. the National Housing Authority (NHA),
National Home Mortgage Finance Corporation (NHMFC), Home Insurance Guaranty Corporation
(HIGC), Housing and Land Use Regulatory Board (HLURB) subject to the control and supervision
of the President of the Philippines.
Urban Development and Housing Act of 1992
The Urban Development and Housing Act of 1992 became effective on March 29, 1992. This Act
aims to address the housing shortage of the country. It lays down the groundwork for a
comprehensive and continuing urban development and housing program. It is envisioned to:
1. prioritize provision of decent shelter to the poorest of the poor;
2. provide the framework for the development and use of urban lands;
3. encourage people and community involvements and initiatives in urban
4. development and shelter construction;

5. improve and maximize local government unit participation especially in socialized
6. housing; and
7. tap private sector resources for socialized housing.
Comprehensive and Integrated Shelter Financing Act of 1994
The Comprehensive and Integrated Shelter Financing Act of 1994 (R.A. 7835) was signed on
December 16, 1994 which aims to provide sustained funding to the NSP through increased annual
appropriations, strengthen the financial capability of the government housing institutions and
effect more efficient housing delivery, and encourage private sector funds into the mainstream of
housing finance. The five major components of the Act were as follows:
1. increase in the capitalization of NHMFC from P500 million to P5.5 billion;
2. increase in the capitalization of HIGC from P1 billion to P2.5 billion;
3. increase in the appropriations for the NSP, specifically Resettlement Program,
4. Community Mortgage Program, Medium-Rise Public, and Private Housing Program;
5. creation of the Local Housing Program; and
6. Abot-Kaya Pabahay Fund Program
Organizational Structure
The agencies involved in the government housing delivery system were as follows:
 The Housing and Urban Development Coordinating Council acted as the highest
policy
 making body on shelter and provided overall direction in the implementation of the
 National Shelter Program.
 It was a 19-man Council which was composed of the heads of the four key housing
 agencies, heads of the three fund source agencies and six representative of the private
 sector.
Key Housing Agencies
 National Housing Authority (NHA) - the sole government producer of shelter for low
 and marginal income groups;
 National Home Mortgage Finance Corporation (NHMFC) - the major home mortgage
 finance institution;
 Home Insurance Guaranty Corporation (HIGC) – the guaranty and credit insurance arm
 to mobilize private sector funds;
 Housing and Land Use Regulatory Board (HLURB) – the sole regulatory board for
 housing and land development.
Government Financial Institutions/Fund Source Agencies
 Home Development Mutual Fund (HDMF) - mandatory savings scheme for those
 earning P4,000 and above. Otherwise known as the Pag-IBIG Fund, it is considered as
 the premier housing institution in the country;
 Social Security System (SSS) – primary provider of funds for home mortgages of
 private sector employees;
 Government Service Insurance System (GSIS) – primary provider of funds for home
 mortgages of government sector employees.
Government Housing Programs/Projects
Under the National Shelter Program, several programs were implemented which addressed the
needs of various groups. These were:
1. Development of Resettlement Sites – This involved the development of sites to

generate
2. serviced home lots by the National Housing Authority for families displaced from sites
3. earmarked for government infrastructure projects and the Mt. Pinatubo eruption or those
4. occupying danger areas such as waterways, esteros, railroad tracks, and the likes.
Under
5. Presidential decree 2015, the beneficiaries pay only a minimum of P30.00 to P50.00 a
6. month for a 60 square-meter lot.
7. Community Mortgage Program – It was a financing scheme which enabled slum
8. dwellers and residents of blighted areas, or areas for priority development to own the
9. lot they occupy where owners were willing to sell, reblock their structures and
10. introduced facilities or utilities like water, electricity, drainage, and sewerage through a
11. community mortgage. Under the scheme, whole plots of privately owned and publicly
12. held lands were subdivided among qualified beneficiaries of the area which were
13. organized into a

community organization. The loanable amounts under this scheme were P30,000 per
underdeveloped lot at 6 percent interest per annum, P45,000 per developed lot at 6 percent
interest
per annum, and P80,000 per house and lot at 6 percent per annum.
14. Direct Housing Provision – This involved the provision of financial assistance directly
15. to the target beneficiaries of the National Shelter Program who were either members
of
16. SSS, GSIS, or HDMF.
17. Indirect Housing Provision – This involved the provision of development loans to
18. private developers and land owners who were in need of fund augmentation enabling
19. them to mobilize their land and other production resources for shelter delivery. This
20. mobilizes financing for shelter either via direct loans or through a system of
guarantees
21. to financial institutions for the use of their funds. This was possible through
22. Developmental Loan and Government Pabahay Fund Program of HDMF and the
23. Guaranty and Municipal Finance Program of the Home Insurance Guaranty
Corporation
24. (HIGC) (Based on Interviews and documents provided by HUDCC, 1999).
Housing Policies and Strategies Policies
The Housing and Urban Development Coordinating Council (HUDCC) had adopted an eight
(8) policy thrusts to guide the delivery program as follows:
1. Housing as a means of social intervention and catalyst for economic activity;

2. People-centered and aided self-help approach to housing;
3. Maximum multi-sectoral participation;
4. Easier land access for housing;
5. Development of regional growth poles;
6. Sustainability and matching of housing finance with beneficiaries’ affordability
7. Maintenance of ecological balance in urban development and housing; and
8. Improvement of housing delivery system.
Strategies
With the policy thrusts mentioned above as the guide, the Housing and Urban Development
Coordinating Council (HUDCC) enumerated the following as their strategies:
1. Long-term and continuing financial support for social housing production;
2. New and appropriate housing technology;
3. Linkages with livelihood programs;
4. Creation of housing cooperatives;
5. Incentives and enabling mechanisms for all private sectors/NGO participation;
6. Capability building of Local Government Units and other sectors in housing
development;
7. Land banking;
8. Rationalized land use and town planning;
9. Streamlining of procedures on and related to land access;
10. Provision of housing support services;
11. Creation of enabling conditions supportive to development of growth poles;
12. Conversion and coverage broadening of Abot-kaya Pabahay Fund;
13. Reversion of Pag-IBIG Fund to mandatory membership;
14. Automatic 5-year loan agreement with United Home Lending Program (UHLP)
agencies;
15. Active participation of private banks as mortgage originators;
16. Adoption of alternative non-traditional and innovative fund sourcing mechanisms;
17. Integration of environmental concerns in planning and development
18. Establishment of monitoring and feedback mechanisms;
19. Establishment of one-stop shops; and

20. Regionalization.
APPENDIX D PHILIPPINE HOUSING DEVELOPMENT PLAN 2011-2016 AND

ACCOMPLISHMENT REPORT 2004-2010
The researcher obtained this document from the internet as it was already available in
the
Web on April 4, 2021.
Strategic Plan and Focus
The housing sector is guided by the theme: Gaganda ang buhay kung may bahay at
hanap-buhay (Life will improve with housing and livelihood.) The vision is to provide a
holistic framework of a home and eventually a harmonious community through
provision of housing infrastructure, integration of basic services, and implementation of
appropriate housing/construction standards. It targets the provision of some 1.47 million
housing units for the Plan period 2011- 2016.
To address the housing needs and gaps in basic services, especially for the poor and
marginalized:
a. Accelerate mass housing programs with alternative housing technologies,
schemes and approaches to ensure decent and affordable homes. In relation to
this, the following will also be undertaken:
• Employ labor-intensive method in the implementation of housing

projects wherever feasible to generate employment in the beneficiary
communities;
• Develop and implement the appropriate standards in the construction of
the housing units to incorporate DRRM and CCA;
• Explore vertical expansion in the construction of housing units taking
into consideration the basic geographical location, soil quality and other
environmental considerations; and
• Explore the use of indigenous and recyclable materials as environment-
friendly alternatives to reduce cost in building houses.
b. Integrate basic infrastructure support to resettlement sites and emerging regional
sustainable communities, such as provision of potable water, safe and sufficient
electricity, access roads to the nearest commercial centers, and ICT, among
others;
b. Ensure that all government infrastructure projects integrate the relocation and
resettlement requirements of affected families into their plans and costing in
collaboration with other concerned agencies;
c. Develop a financing framework for relocation and resettlement, including
workable PPP schemes for socialized housing development; and
d. Support LGUs efforts to develop a system of land inventory to better identify
areas for urban growth and planned areas for human settlements through their
Comprehensive Land Use Plans (CLUPs).
Social Development
Housing and Urban Development Assessment and Challenges
With an enormous total housing need of 3.7 million as of 2010, a total of 812,463
housing and shelter security units (i.e., house and/or lot) were provided from 2004 to
2010.
Indirect housing assistance, such as provision of retail and developmental guaranties,
issuance of licenses-to-sell, and assistance in comprehensive land use planning, delivered
mixed accomplishments. Against a target of 115,556 retail and developmental guaranties,
the Home Guaranty Corporation (HGC) only guaranteed a total of 62,418 housing loans
(54.01%). However, the Housing and Land Use Regulatory Board (HLURB) issued a
total of 767,872 licenses-to sell, indicating a robust construction and completion of
housing
units. The HLURB also assisted 419 LGUs in updating and formulating their
Comprehensive Land Use Plans (CLUPs) against a target of 432 LGUs (Table 8.4).
The government provided housing tenure assistance through the following reform
measures: (a) loan interest-rate reductions that brought down the lowest socialized
housing package to 3 percent per annum; (b) extension of payment terms for all housing
loans from 25 up to 30 years; (c) reduction of loan requirements from 15 to eight; and (d)
reduction of loan processing time from three months to seven working days for
developer accounts with buy-back guarantee, and 30 days for retail and developer
accounts without buy-back guarantee.
The housing sector, however, confronts the following key challenges:
Meeting the enormous housing need and demand
Total housing need, which includes housing backlog and housing for new households, is
estimated to reach about 5.8 million units by 2016 (Table 8.5).
The National Urban Development and Housing Framework (NUDHF) 2009- 2016
indicates that Regions 3, 4B, and NCR account for about half of the total housing need.
The rapid growth of informal households and settlements
Informal settlements have grown by leaps and bounds. In Metro Manila, households in
informal settlements increased by more than 81 percent between 2000 and 2006. With
rural-urban migration expected to continue, and six out of ten Filipinos living in urban
areas, addressing the housing problem must be embedded within a larger urban
development framework for environmental sustainability. While the MDGs on access to
safe drinking water and sanitary toilets have already been achieved, land use and green
technology for housing construction have can be tackled only within an action plan for
climate change adaptation including disaster risk management.
Strained basic shelter, and urban services, and fiscal constraints
The phenomenon of urban slums and informal settlements have been characterized by
unsanitary conditions, congestion, and limited access to basic urban services, like health
centers, schools, waste disposal, and safe water supply. While the housing sector is
expected to contribute to attaining the MDG target on improving the lives of at least 100
million slum dwellers worldwide by 2020, the formulation of the National Slum
Upgrading Strategy and the setting of national targets for urban renewal and slum
upgrading efforts should allow a more systematic and detailed assessment of the
Philippines’ contribution to the global goal in the coming years.
The annual public expenditure for housing in the Philippines, which is approximately
less than 1 percent of the total government expenditures, accounts for less than 0.1
percent of GDP, which is one of the lowest in Asia (Habito, 2009). The limited budget,
unclear compliance of the provision of the Urban Development and Housing Act (i.e.,
allocation of at least 20 percent of the total project cost in every housing development for
socialized housing finance), and reliance on the social insurance system to finance
housing needs effectively limit the access of the poor to housing assistance. Government
shelter strategies are focused on increasing housing production either by direct provision
of housing units/loans or by giving incentives to developers who cater mainly to the
formal sector and the middle/high-income households. These approaches do not address
the fundamental issues of land supply constraints and financing weak institutional
mechanisms in housing construction and the financial environment, and unclear focus on
poverty reduction (Ballesteros, 2010).
The HGC must be strengthened through equity infusion from the government to establish
a stronger guaranty system that will encourage the funding of socialized and low-cost
housing projects by the private sector and housing developers. Funds for housing can be
secured and sustained, only if there is a viable system of guarantees for both the
government and private financial institutions that cater to the funding requirements of
housing production and end-user financing. The HGC can guaranty loans granted by
financial institutions and developers for housing up to 20 times its net worth.
Housing and Urban Development Target
The housing sector targets the provision of 1.47 million units of direct housing assistance from
2011 to 2016. This target for direct and indirect housing provision is identified in Table 8.10.
The global MDG on ensuring environmental sustainability aims to achieve significant
improvement in the lives of at least 100 million slum dwellers worldwide by 2020. This
will guide the plans and programs on urban renewal or slum upgrading, which is a key
component of the socialized housing program. The identification and development of
new relocation/resettlement sites for the marginalized and vulnerable sectors will be
adopted, and program targets will likewise be set. The National Slum Upgrading
Strategy that will be formulated will identify the national targets for the programs
addressing the needs of slum dwellers.
Strategies
Housing and Urban Development
To rapidly address the housing problem, particularly the proliferation of slums and
informal settlements, the government shall formulate a National Slum Upgrading
Strategy that will set the targets for slum upgrading programs. Expanded slum upgrading,
onsite upgrading or in city resettlement shall be pursued as strategies by government and
stakeholders.
Government shall pursue the following reforms to scale up and sustain slum upgrading:
(a) supporting other forms or modalities of security of tenure such as usufruct and lease
rights; (b) developing PPPs for onsite upgrading and resettlement; (c) stimulating
housing micro finance for end-user financing; and (d) strengthening community
partnerships and stakeholdership through capacity development. Through the PPPs,
urban renewal shall also be promoted for sustainable urban development, to ensure
balanced provision of revitalized infrastructure that would support social sectors,
including socialized housing.
LGUs shall lead the efforts in shelter planning, since housing and human settlements will
be localized in terms of identifying solutions and programming. Thus, LGUs shall
develop a land inventory system to identify areas for urban growth and planned areas for
human settlements through their Comprehensive Land Use Plans (CLUPs).
Building capacity for effective urban planning systems, data management, and disaster
risk management especially among the LGUs shall be established . The following
policies and strategies shall be pursued:
Housing
1. Create alternative funds and mobilize resources, to spur housing production
through the revival of the SSS, GSIS and GFIs’ contribution in the housing
sector pool; reinstate the entitlements of the housing sector under the
Comprehensive and Integrated Shelter Finance Act
(RA 7835); involve rural banks, cooperatives and microfinance institutions in
implementing a housing micro-finance program, catering to the marginalized sector and
rural homebuyers; and develop an effective and viable secondary mortgage market and
rationalization of the guarantee system;
2. Build strong partnerships with LGUs to accelerate housing production
through land use and local shelter planning, land inventory and creation of Local
Housing Boards (LHB); re-channel development funds to LGUs for housing
projects for their constituents; and set aside lands forsocialized housing in
accordance with the Urban Development and Housing Act (RA 7279);
3. Engage NGOs (e.g., Gawad Kalinga, Habitat for Humanity, ABS-CBN
Foundation) and the private sector in building and scaling up socialized housing
projects;
4. Promote the use of “green” technology and materials in housing construction
and in building “disaster resilient homes”; and

5. Develop a strong, cohesive and responsive shelter team (e.g., key shelter
agencies and stakeholders) to bring significant changes and institutional reforms,
including simplifying loan application processing for development and
homebuyer’s loans, and reducing red tape in the issuance of land titles and
housing and development permits, at the national and local levels; and ensure
transparency and good governance in the housing sector
Urban Development
1. Formulate an action plan implementing the National Urban Development and
Housing Framework (NUDHF) 2009-2016, to achieve urban competitiveness
and sustainability, housing affordability, poverty alleviation, and effective and
performance-oriented governance through a participatory process; and
2. Prioritize slum improvement under a policy of maximum retention and
minimum dislocation; and vigorously implement the National Slum Upgrading
Strategy through a
3. National Slum Improvement Action Plan for 2011-2016 that comprise specific
targets, programs and activities to provide secured tenure to urban informal
settlers, especially those in danger area
Legislative Agenda
Creation of the Department of Housing and Urban Development (DHUD)
This seeks to ensure an adequate and coherent institutional framework for a holistic
management of the housing and urban development sector.
Balanced Housing Requirement for Condominium Projects
This seeks to require developers of proposed condominium projects to develop
socialized housing projects (costing at least 20 percent of the projects) as compliance

with the 20 percent balanced housing requirement for subdivisions, per Section 18 of the
Urban Development and Housing Act or RA 7279.
Establishment of Local Housing Boards
This seeks to create Local Housing Boards in every city and municipality that shall serve
as the focal unit in the delivery of housing services, local shelter planning and
disposition of underutilized assets of shelter agencies and national government.
National Land Use Act (NALUA)
This seeks to establish a national land use framework that will define the indicative
priorities for land utilization and allocation. NALUA shall integrate efforts, monitor
developments related to land use, and evolve policies, regulations and directions of land
use planning processes.
The NALUA mandates the formulation of national planning and zoning guidelines and
standards,
to guide LGUs in the formulation of their CLUPs and enactment of zoning ordinances.
Comprehensive and Integrated Shelter Finance Act (CISFA) II
This seeks to enact the continuation of CISFA or RA 7835, to increase budget
appropriation for
the socialized housing program of the government, and significantly increase the
provision of housing and tenure security to poor informal settlers, and in order to attain
the MDGs.
APPENDIX E HOUSING POLICIES UNDER DUTERTE
The ultimate goal of the Housing and Urban Development Coordinating Council
(HUDCC) under the leadership of Chairperson Eduardo D. Del Rosario was to improve
access of a significant number of homeless and underprivileged Filipino families to a
decent, affordable and climate resilient housing in sustainable communities through the
collaborative efforts of the housing agencies, the private sector and other stakeholders.
To put the house in order and to ensure the attainment of the overall goal of the housing
sector, the HUDCC Chairperson has spearheaded the formulation and launching of the
housing sector’s roadmap dubbed as “BALAI Filipino” Housing Program.
BALAI Filipino is the collective goal of all the Key Shelter Agencies (KSAs) under the
lead of the Housing and Urban Development and Coordinating Council HUDCC).
BALAI Filipino Stands for Building, Adequate, Livable, Affordable and Inclusive
Filipino Communities.
Anchored on the 2017-2022 Philippine Development Plan (PDP), and the “Biyaya ng
Pagbabago” initiative of the Duterte administration, the BALAI Filipino envisions strong
family togetherness, thriving in vibrant, culturally diverse, resilient and secure
communities.
BALAI Filipino program targets the provision of housing Assistance to at least
1.5 Million Filipino families by the end of 2022 and seeks to enhance the synergy of the
housing agencies along with our partners in the private sector, civil society organizations,
other national government agencies and Local Government Units.
To achieve the overall objectives of BALAI Filipino Housing Program, the housing
sector has adopted eight (8) policy thrusts, as follows:
1. Develop Synergy through complementation of the various housing programs
offered by the KSAs from planning, housing production, financing and
regulations.
2. Accelerate Housing Production by strengthening partnership with the private
developers, LGUs, NGOs, CSOs and the beneficiaries.
3. Affordable Home Financing Schemes thru the adoption of housing finance
modalities.
4. Implement Anti Red-Tape measures through the G2G arrangements and
development of an online housing portal to speed up the process flow and
eradicate corruption.
5. Build Disaster-resilient and Sustainable Communities through strict compliance
with the National Building Code and utilization of geo-hazards data.
6. Scale-up Public-Private Partnerships (PPP) by entering into innovative
engagements with the private sector for the generation of funds, housing
production
7. and delivery of services.
8. Ensure Compliance to Balanced Housing by private developers through
transparent implementation of the Balanced Housing Act.
9. Maintain an updated Housing Sector Statistics on housing demand and supply and
land suitable for housing.
BALAI Filipino supports the present administration’s thrust to alleviate poverty
and reduce unemployment. For the period July 2016 to May 2019, the housing agencies
under the BALAI Filipino program have provided security of tenure to 584,353 low-
income Filipino households. This is 26.0% higher than the 464,156 households provided
with security of tenure for the period July 2014 to June 2016, as shown below:
The 584,353 low-income households provided with security of tenure account to 41% of
the accumulated housing need of 1,439,550 households until the end of 2022.
APPENDIX E Housing Policies under the Duterte Administrationj
The ultimate goal of the Housing and Urban Development Coordinating
Council (HUDCC) under the leadership of Chairperson Eduardo D. Del Rosario was to
improve access of a significant number of homeless and underprivileged Filipino
families to a
decent, affordable and climate resilient housing in sustainable communities through the
collaborative efforts of the housing agencies, the private sector and other stakeholders.
To put the house in order and to ensure the attainment of the overall goal of the housing
sector, the HUDCC Chairperson has spearheaded the formulation and launching of the
housing sector’s roadmap dubbed as “BALAI Filipino” Housing Program.
BALAI Filipino is the collective goal of all the Key Shelter Agencies (KSAs) under the
lead of the Housing and Urban Development and Coordinating Council HUDCC).
BALAI Filipino Stands for Building, Adequate, Livable, Affordable and Inclusive
Filipino Communities.
Anchored on the 2017-2022 Philippine Development Plan (PDP), and the “Biyaya ng
Pagbabago” initiative of the Duterte administration, the BALAI Filipino envisions strong
family togetherness, thriving in vibrant, culturally diverse, resilient and secure
communities.
BALAI Filipino program targets the provision of housing Assistance to at least
1.5 Million Filipino families by the end of 2022 and seeks to enhance the synergy of the
housing agencies along with our partners in the private sector, civil society organizations,
other national government agencies and Local Government Units.
To achieve the overall objectives of BALAI Filipino Housing Program, the housing
sector has adopted eight (8) policy thrusts, as follows:
10. Develop Synergy through complementation of the various housing programs
offered by the KSAs from planning, housing production, financing and
regulations.
11. Accelerate Housing Production by strengthening partnership with the private
developers, LGUs, NGOs, CSOs and the beneficiaries.
12. Affordable Home Financing Schemes thru the adoption of housing finance
modalities.
13. Implement Anti Red-Tape measures through the G2G arrangements and
development of an online housing portal to speed up the process flow and
eradicate corruption.
14. Build Disaster-resilient and Sustainable Communities through strict compliance
with the National Building Code and utilization of geo-hazards data.
15. Scale-up Public-Private Partnerships (PPP) by entering into innovative
engagements with the private sector for the generation of funds, housing
production
16. and delivery of services.
17. Ensure Compliance to Balanced Housing by private developers through
transparent implementation of the Balanced Housing Act.
18. Maintain an updated Housing Sector Statistics on housing demand and supply and
land suitable for housing.
BALAI Filipino supports the present administration’s thrust to alleviate poverty and
reduce unemployment. For the period July 2016 to May 2019, the housing agencies
under the BALAI Filipino program have provided security of tenure to 584,353 low-
income Filipino households. This is 26.0% higher than the 464,156 households provided
with security of tenure for the period July 2014 to June 2016, as shown below:
The 584,353 low-income households provided with security of tenure account to 41% of
the accumulated housing need of 1,439,550 households until the end of 2022.
APPENDIX F
Table 2.12. Housing Need Per Region, 2005-2010

Source:
HUDCC
Annual Backlog + New Households
Region
Backlog 2005 2006 2007 2008 2009 2010 Total
NCR 58,412 82,182 82,434 82,689 82,946 83,206 83,469 496,928
CAR 1,309 6,494 6,589 6,685 6,783 6,882 6,984 40,416
I 5,556 25,027 25,446 25,874 26,310 26,757 27,212 156,626
II 4,078 17,725 18,032 18,346 18,667 18,995 19,330 111,094
III 12,569 71,938 73,837 75,798 77,821 79,909 82,064 461,368
IV 23,827 127,872 131,742 135,757 139,920 144,239 148,718 828,248
V 12,267 28,288 28,557 28,830 29,109 29,392 29,679 173,855
VI 16,816 36,941 37,255 37,574 37,898 38,227 38,561 226,455
VII 10,578 45,880 46,865 47,877 48,918 49,988 51,087 290,616
VIII 7,281 18,766 18,940 19,116 19,294 19,476 19,660 115,252
IX 7,642 21,824 22,133 22,449 22,772 23,101 23,438 135,717
X 5,912 18,880 19,164 19,455 19,751 20,054 20,364 117,668
XI 11,158 41,922 42,722 43,542 44,384 45,248 46,134 263,952
XII 6,661 18,033 18,270 18,511 18,758 19,009 19,266 111,847
ARMM 5,126 22,800 23,482 24,190 24,926 25,691 26,484 147,574
CARAGA 5,942 12,791 12,902 13,016 13,131 13,248 13,367 78,456
Total 195,133 597,362 608,370 619,708 631,389 643,422 655,821 3,756,072
Table 2.13. Number of Shelter Security Units Constructed, Financed
and/or Administered by the Government
Year NHA NHMFC HDMF HGC Total

1996 27,828 14,668 69,265 71,898 183,679
1997 45,793 14,591 88,148 84,134 232,666
1998 32,875 11,102 52,670 48,962 145,609
1999 40,201 6,286 33,273 11,000 90,760
2000 42,807 6,088 23,944 75,282 148,121
2001 27,350 9,457 25,947 33,241 95,995
2002 22,683 12,331 19,125 28,651 82,790
2003 16,132 14,026 48,636 35,012 113,806
2004 11,443 14,137 56,550 17,167 99,297
2005 43,229 12,710 53,421 5,496 114,856
Targets for 2005* 55,000 15,360 44,716 24,822 139,898
Accomplishment
Rate (%) 78.60 82.75 119.47 22.14 82.10
Construction Source: HUDCC; Philippine Statistical Yearbook (2007); * MTPDP Chapter on Housing
Table 2.12. Housing Need Per Region, 2005-2010
Annual Backlog + New Households

Region
Backlog 2005 2006 2007 2008 2009 2010 Total
NCR 58,412 82,182 82,434 82,689 82,946 83,206 83,469 496,928

CAR 1,309 6,494 6,589 6,685 6,783 6,882 6,984 40,416
I 5,556 25,027 25,446 25,874 26,310 26,757 27,212 156,626
II 4,078 17,725 18,032 18,346 18,667 18,995 19,330 111,094
III 12,569 71,938 73,837 75,798 77,821 79,909 82,064 461,368
IV 23,827 127,872 131,742 135,757 139,920 144,239 148,718 828,248
V 12,267 28,288 28,557 28,830 29,109 29,392 29,679 173,855
VI 16,816 36,941 37,255 37,574 37,898 38,227 38,561 226,455
VII 10,578 45,880 46,865 47,877 48,918 49,988 51,087 290,616
VIII 7,281 18,766 18,940 19,116 19,294 19,476 19,660 115,252
IX 7,642 21,824 22,133 22,449 22,772 23,101 23,438 135,717
X 5,912 18,880 19,164 19,455 19,751 20,054 20,364 117,668
XI 11,158 41,922 42,722 43,542 44,384 45,248 46,134 263,952
XII 6,661 18,033 18,270 18,511 18,758 19,009 19,266 111,847
ARMM 5,126 22,800 23,482 24,190 24,926 25,691 26,484 147,574
CARAGA 5,942 12,791 12,902 13,016 13,131 13,248 13,367 78,456
Total 195,133 597,362 608,370 619,708 631,389 643,422 655,821 3,756,072
Source: HUDCC
.
APPENDIX G
https://asia.nikkei.com/Spotlight/The-Big-Story/Crony-capital-How-Duterte-embraced-
the-oligarchs
Nikkei Asia
Crony capital: How Duterte embraced the oligarchs President Rodrigo Duterte promised
to destroy the Philippines' elite. Instead, he chose his own

AURORA ALMENDRAL, Contributing writerDECEMBER 4, 2019 15:10 JST
MANILA/DAVAO, Philippines -- The day Rodrigo Duterte became president, Roberto
Ongpin was one of the Philippines' richest men. Ongpin had survived -- and prospered --
under six presidential administrations by trading favors and greasing friendships with
politicians. He had a full arsenal of luxuries at his disposal, including a billionaire's island
dotted with villas, serviced by butlers and accessible
by a fleet of private jets, and an exclusive club at the center of the capital's business district,
where the whiskey was poured each day at precisely 5 p.m. and far into the night.
During his populist campaign for president in 2015 and 2016, Duterte
took aim at the corruption and excesses of wealth-hoarding ruling families like Ongpin's. He
called them "a cancer on society," and "illustrious idiots" who flew around in private planes
while the Filipino
people suffered.
Then, just four days into his term, Duterte unloaded. "The plan is to destroy the oligarchs
embedded in the government," he said. "I'll give
you an example publicly: Ongpin, Roberto."
Shares of Ongpin's public companies plummeted. By Duterte's second
month in office, the tycoon had stepped down as chairman of PhilWeb, his online
gambling company. "He knew the game was up," Apa Ongpin, Roberto's nephew and former
executive at PhilWeb, recounted in an interview with the Nikkei Asian Review.
The stunning takedown of a man who was a fixture in the murky borderlands between
Philippine politics and business sent waves of shock and fear through the country's elite.
Three years on, what Duterte framed as a systemic transformation has come to look more like a
personal vendetta. One prominent tycoon who spoke on condition of anonymity
described the takedown of Roberto Ongpin as ultimately insignificant -- "a grain of sand."
Rather than sending a clear message to the country's business oligarchs, the episode left many
believing that Duterte has simply opened the door to a new wave of businesspeople and loyalists,
who have been given access to political power and lucrative government contracts.
"The cast of characters is not changing," said Lala Rimando, a journalist, who is writing a book
on the Philippine business elite. "They're just being added to."
One former high-ranking elected official went a step further. Far from taking down a system
of businessmen and politicians working together for personal profit, Duterte is
"cultivating his own set of cronies," he said.
Davao connections
Few men have had a more spectacular rise than Dennis Uy.
Uy, a 45-year-old third-generation Chinese-Filipino from Davao del
Norte, is the son of provincial traders who dealt in copra, maize and bananas. As he
described in an interview with Nikkei in 2017, Uy met Duterte in Davao city, where he was
mayor for over two decades. The
men became friends. "He is a mentor in life [and] in leadership," Uy
said of Duterte.
Uy built Phoenix Petroleum Philippines, his fuel company, into one of
the largest in the country, capable of going head-to-head with Chevron.
He also expanded his business into shipping and logistics. By 2016, Uy
was one of Duterte's top presidential campaign donors. The next year, Duterte rang the bell at
the Philippine Stock Exchange on the 10th anniversary of Phoenix going public. Uy and Duterte
patted each other
on the shoulders and traded effusive public compliments.
Since then, Uy has embarked on a head-spinning acquisition spree: convenience stores, a digital
startup, a casino franchise, a bakery chain,
a Ferrari dealership, and a water utility -- H2O Ventures, which was
used to gain a backdoor listing on the stock exchange, and has since
been turned into a casino developer. On top of all that, he gained rights
to develop a 177-hectare multiuse city with office buildings, high-end
retail outlets, sport centers and a resort, rising from a former American
air base 90 km north of Manila.
Uy has racked up directorates and seats on the boards of companies, many of them owned
by old-money oligarchs eager to associate with a man so closely linked with Duterte. Before
Duterte became president, Uy was on the board of three public companies. By 2019, Dow
Jones research shows that he is CEO, chairman or director at 27 firms, and a member of
numerous professional and regional organizations. This year, he debuted on Forbes' list of the
richest Filipinos at number 22. He has, in the past, denied using his personal relationship with
Duterte for economic gain. Uy did not respond to multiple requests for an interview for this
article.
Even though Uy projects an image of soft-spoken, provincial humility, one tycoon who has had
dealings with him described a man fond of ostentatious displays of wealth and with a
penchant for sports cars and other luxuries.
"He has a Richard Mille watch that you should not be wearing when you've got so much debt to
the banks," he said, referencing timepieces that sell for six figures. He wants to be a "big shot,"
the tycoon said. "He wants to be the next taipan."
His rush to the top has been fueled partly by borrowing. Uy is estimated by Forbes Asia to have
amassed around $2 billion in debt.
Uy's next venture takes him into a sector that has long suffered from the concentration of power in
the Philippines' political and business communities: telecommunications. Dominated by two
companies headed by the country's richest families -- the Zobel de Ayala family, who are majority
stakeholders of Globe Telecom, and the tycoon Manuel V. Pangilinan of Smart
Communications -- the industry has long been a cautionary tale of regulatory capture, stifled
competition and the power of the oligarchy.
In 2016, at the start of Duterte's presidency, telecommunications service in the

Philippines was a hair-pulling combination of dropped calls, webpages that struggled to load,
unstable connections and buffering video broken up by brief spells of pixelated images. The
poor service was a drag on businesses dependent on internet services. In Asia, the only country
with slower service than the Philippines was Afghanistan, and access costs more than triple
the global average.
Duterte railed against the companies, referring to them as a price-controlling cartel and
threatening to break up the duopoly with foreign competition. The telcos responded to the
threats and speeds doubled within three years, but the Duterte administration pressed on with the
promise of a third telco anyway.
In the final round of bidding for the third license, a joint venture between Dennis Uy's
company, Mislatel -- now known as Dito Telecommunity -- and the Chinese
government-backed China Telecom remained as the sole contender. Mislatel won the deal
despite Uy having little or no experience in telecommunications. Critics cried foul, alleging
that some of Duterte's closest political associates had been spotted riding in Uy's private jets and
summering in his luxury mountain villa, and that they had sped up the bidding process.
"As it is, it's now oozing with preferential treatment and, at worst, cronyism," Antonio
Trillanes IV, a former senator and vocal critic of Duterte, said of the selection shortly after the
announcement of Mislatel's win.
Ronald Mendoza, dean at the School of Government at the Ateneo de Manila University, said that
the bidding process lacked transparency and the ultimate outcome -- that a company "very,
very much linked to the Duterte administration" emerged in the final stage as the sole
contender -- is "arguably the creation of yet another powerful force of economic
concentration."
The telco episode appeared to have traded on political favoritism and rent-seeking, the same
currency used by the existing telco companies, which resulted in the dismal state of
Philippine telecommunications.
The deal is not likely to be seen as a signal that change has come, Mendoza said. "In fact, what
that episode signaled is more of the same."
One businessman with knowledge of the sector had a different interpretation -- that Uy was
doing Duterte a favor. "The next five years is not, in any form, going to be a good
investment for anyone," he said. "Not for China Telecom, not for decades. But Dennis had to
do it, because there's going to be a lot of egg on the president's face if the third telco project
didn't happen."
Payback
As fellow Davao native Dennis Uy makes his name nationally, government funds are flooding
into Duterte's home province. Between 2016 to 2017, the budget for the Department of Public
Works and Highways Region XI, which encompasses Duterte's stronghold of Davao city, Davao
del Norte, Davao del Sur and Davao Oriental, increased by over 100%. By comparison, other
regions have had their DPWH numbers flatline, and the national average increased by 31%.
Backhoes, bulldozers and dump trucks are parked up on the sides of the roads next to piles of
gravel and rolls of geotextile. Men with their faces wrapped in T-shirts to keep off the sun
hoist scaffolding and sacks of cement onto their shoulders at dozens of public and private
construction sites scattered across Davao city.
Public infrastructure investment has boosted private businesses. Ayala Land, part of one of the
Philippines' most prominent family conglomerates, broke ground on a 20 billion peso ($393
million) mixed-use development in Davao city in 2017. Business delegations from China,
Singapore, the United Arab Emirates and Taiwan have visited Davao, scouting for
opportunities. According to data from the Davao City Chamber of Commerce and Industry,
new business registrations in the first half of 2019 indicate a sharp increase in
investments in the city, a development they credit to the increase in attention from the national
government.
For some, the money is there for the taking. In 2017, Don-don Opreza stumbled onto a group of
contractors while strolling the beach behind his house. They were struggling to find an access
point to a new coastal road project, causing delays. Opreza paid 30,000 pesos to a
neighbor for the access road. The contractors rewarded him with the rights to supply
construction materials to the coastal road.
Trucks started lining up outside his container box office, heaving with boulders, armor rocks
and backfill sand. As a middleman, Opreza tripled his earnings from his previous business
supplying itinerant harvesters and laborers to the region's banana plantations. In
comparison, counting the trucks coming in was easy money.
"I still can't believe the opportunity," Opreza said, who is settling into his new role as
patriarch of his extended family, sending nieces and nephews to college, paying for
vacations to the United States and buying up prime lots for his own mango and banana
plantations. Even as he praises Duterte for allowing small players like himself to chip off a piece
of wealth, he mentions a new supplier for the coastal road, someone close to a local
politician, with whom he was recently compelled to split volume, handing over what he
estimated to be 40% of the business.
"It's good, it's normal," Opreza said in defense of his competitor using political influence to gain
market share.
Despite all the money flowing in, progress has actually been stop-start, as companies with
capital and political connections capture projects they may not have the capacity to finish, leading
to delays.
In 2019, the Commission on Audit found more than 4,000 DPWH projects were delayed
nationwide, worth a total 118.4 billion pesos.
On a recent Wednesday afternoon at the new coastal road, among the largest projects
currently underway in Davao, there were few workers to be found. A lone backhoe shifted
rocks just by the coastline, and a black dog loped across the empty expanse of the
construction site while a toddler in diapers dug into the sand with a plastic shovel. Dean Ortiz,
spokesperson for DPWH Region XI, said that in 2019, the agency's goal was to complete 1.1 km
of the planned 18 km road.
John Carlo Tria, vice president of the Davao City Chamber of Commerce and Industry, said the
increased budgetary attention from the national government has spurred private
investment in Davao, but project delays were in danger of letting the moment slip away.
"People are seeing the potential, but they are apprehensive at the same time," Tria said.
While the region desperately needs infrastructure, at the moment only a small number of people
are benefiting from the influx of state funding.
A 2018 investigation by the Philippine Center for Investigative Journalism found that just a
handful of large companies have scooped up most of the infrastructure projects in the Davao
region, more than they could finish. The report singled out CLTG Builders, a company owned
by Desiderio Go, the father of Duterte's longtime special assistant and current senator,
Christopher Lawrence T. Go, who bears the same initials as his father's contracting
company. According to the PCIJ investigation, the construction company has won over 700
million pesos in contracts from DPWH since Duterte became president in 2016. At the time of
the investigation, all of CLTG's projects were delayed.
President Rodrigo Duterte campaigns as a candidate in Davao in 2016. © Reuters
Opposition politicians called for a Senate investigation into what appeared to be

preferential treatment given to the family members of Duterte's closest aide, an
accusation Go denies. Ortiz said the agency did not conduct an investigation, but
confirmed that following the accusation, CLTG did not bid for new contracts with DPWH
in 2019.
One contractor, who requested anonymity to protect his business, said that while his
company has grown steadily in recent years, he had not seen a spike in projects as a result of
the increase in government investments.
"Those funds are intended for the construction companies close to the politicians," he said.
"It's an open secret."
Emerging and midsize contracting companies like his cannot afford the bribes, which he said
typically ranged from 5% to 10% of the contract value. He said that the large contracting
companies should focus on complex projects of national importance and leave simple road
projects to smaller companies. "Of course progress is going to be slow," he said. "They're
clogging up the system."
The booming infrastructure industry in Davao could become another cautionary tale on the
dangers of an economic system run by rent-seeking oligarchs, with the result of poorer services
for average Filipinos, whether in roads, transportation, or telecommunications, critics say.
"This cycle of groups benefiting from political connections, but not necessarily
innovating, nor thriving in a competitive environment, will certainly hit consumers. But I think
that the most pernicious effect is in terms of job creation," Mendoza said. "Where rent- seeking
is rampant, and corruption is always a threat, that environment is not conducive to
sustained growth and job creation."
Vested interests
Despite his populist claims, Duterte has shown himself willing to work with the
Philippines' old-money families.
The Del Rosario-Floirendo clan in Davao del Norte has long stood for the provincial
consolidation of power in business and politics. For more than three decades, the keys to the
governor's mansion and the seats to Congress passed between members of the clan. They ran one
of the world's largest banana plantations on land leased from the government. The clan owned
the provincial banks, sold the farm inputs at high prices and bought the harvest at below- market
rates. After farmers defaulted on their loans, they came to own the farmers' land as well.
This year, in midterm elections, a new candidate stood against them. Edwin Jubahib, the son of
farmers, had to practice putting gel in his hair and walking in hard-soled leather shoes before
facing down the incumbent governor and scion of the ruling clan, Rodolfo del Rosario, Jr.
He tapped into the rising frustration among voters in Davao del Norte and won by a
landslide. Jubahib's spectacular takedown of one of the Philippines' most entrenched political
dynasties should have been the embodiment of Duterte's public support of populist ideals. Jubahib
even partially modeled himself on Duterte, copying his "open door" style of leadership, in which
constituents are able to visit his office and petition him directly.
In the midterms, however, Duterte backed the incumbent. Antonio Floirendo Jr. donated 75
million pesos -- the largest cash donation by far -- to Duterte's presidential campaign.
Paolo Duterte, son of Rodrigo Duterte and then-vice mayor of Davao, listens to his lawyer
during a Senate hearing on drug smuggling in 2017. © Reuters
Being close to Duterte is no guarantee of safety. Several of the president's friends and relatives
have come into government only to be arrested, compelled to step down, or investigated for
corruption.
Jesus Dureza, a friend of Duterte's since high school, resigned as presidential adviser after
two of his officers were fired for corruption. In September 2017, the president's son, Paolo
Duterte, vice mayor of their hometown, was hauled before a Senate inquiry into a $125 million
shipment of illegal drugs that came into the country through Manila. Four months later, Paolo
stepped down after a public fight with his daughter on social media. He has since been elected
to Congress.
Duterte's former foreign secretary, Perfecto Yasay, was arrested on charges of bank fraud. His first
secretary of justice, Vitaliano Aguirre, was accused by rival and gaming operator Charlie "Atong"
Ang of protecting Kim Wong, a casino magnate who was implicated in a billion-dollar heist
from the Bangladeshi central bank, whose perpetrators used bank accounts in the
Philippines to launder the money. Aguirre has denied the allegations.
The remaining old-money families, however, do not appear to be running scared.

Duterte's populism has proved hollow, with limited benefits for average Filipinos, and few real
implications for the elite. An October 2019 poll by Social Weather Stations, a local agency,
found Duterte's approval rating among the rich and middle class to be at its highest since the start
of his presidency, even as it slips among the poor.
"They have no real vision except disruption. They've anchored everything on disruption. Change
is coming," said Apa Ongpin, referring to Duterte's campaign slogan. "But what does that
change? They don't know."
An October 2019 survey by political polling agency Social Weather Stations found
Duterte's approval rating among the rich and middle class to be at its highest since the start of
his presidency, even as it slips among the poor. © Reuters
As for Roberto Ongpin, he is still one of the Philippines' richest men. Ongpin sold his shares
of PhilWeb at a deep discount to Gregorio Araneta III, the son-in-law of Ferdinand Marcos,
the former dictator, who along with his wife Imelda, created the blueprint in the
Philippines for cronyism and kleptocracy and whose family remains one of the
Philippines' most enduring political dynasties. Far from taking down the oligarchy,
Duterte's attack on Ongpin merely transferred some of his wealth to a more powerful family
with whom Duterte has maintained a strong alliance.
In the glittering, softly scented lobby of the Shangri-La Hotel, a luxury franchise his uncle
brought to the Philippines 30 years ago, Apa Ongpin thought for a moment about other wealthy
families who should fear Duterte's distinctive brand of populism. As he considered the question,
waiters in national costume quietly laid pressed-cloth coasters under glasses of sparkling water
and picked up dropped napkins.
"No," Apa said, "I can't think of a case of anyone who should be worried right now."
CLARIFICATION: The original version of this story stated that Dennis Uy had acquired a water
utility. His company did acquire H2O Ventures in 2017, using the business to gain a listing
on the Philippine Stock Exchange. H2O Ventures sold its water utility business and was
subsequently renamed PH Resorts, under which it develops real estate. We also stated that
Dennis Uy is on the board of 27 public companies. Dow Jones research shows that he is CEO,
Chairman or a Director on the board of 27 companies.
APPENDIX H
Noli de Castro to attend Senate housing scam probe A P R 7 , 2 0 1 4
7:06 PM PHT
AYEE MACARAIG
The broadcaster-turned-politician-turned broadcaster again sends word he will attend
the Senate hearin MANILA, Philippines – Former Vice President and housing czar Noli
de Castro confirmed that he will attend the Senate’s new investigation into the P6.6
billion housing scam involving Globe Asiatique (GA).Senate urban planning, housing
and resettlement committee chairman JV Ejercito said De Castro sent word accepting the
invitation to the hearing on Tuesday, April 8.As vice president during the Arroyo
administration, the broadcaster-turned-politician-turned media practitioner again was
chairman of the Housing and Urban Development Coordinating Council (HUDCC), and
ex-officio chairman of the Home Development Mutual Fund or Pag-IBIG Fund when the scam
allegedly occurred. He is now back as anchor of ABS-CBN's flagship newscast TV
Patrol. “Former Vice President Noli de Castro, former HUDCC chair in the previous
administration, has signified his intention to come tomorrow to air his side,” Ejercito said in
an interview on ANC on Monday, April 7.
The Senate is reopening its investigation into the scam, where Globe Asiatique and its
president Delfin Lee allegedly used ghost borrowers to obtain P6.6 billion loans from Pag-
IBIG Fund for housing projects in Pampanga from 2008 to 2011. Besides the use of ghost
borrowers, GA allegedly engaged in the double and triple sale of properties, leading to the loss
of homeowners’ hard-earned money.Ejercito said Lee will not attend the hearing because
his committee was unable to issue a subpoena for the property developer, who is detained
in Pampanga after his arrest on March 6. The senator said the committee sent an
invitation to the justice department but Lee is under the custody of the Pampanga
Regional Trial Court.Lee’s lawyer Willie Rivera said his client was willing to face the Senate
but they belatedly got the notice from the committee.“I am not expecting him tomorrow because
he is now under detention. We know that in these cases, there is a process we have to
follow … so tomorrow we will first establish the jurisdiction under this committee of this case so
we can invite the personalities including Mr Delfin Lee,” Ejercito added.Besides De Castro,
also attending the hearing are current housing officials including Pag-IBIG Fund
President and CEO lawyer Darlene Marie Berberabe, and Land Registration Authority (LRA)
officials in Pampanga.Victims of the scam and ghost buyers also confirmed their
attendance.Ejercito told Rappler that the committee will not summon then Pag-IBIG
President now Marikina Representative Romero “Miro” Quimbo of the ruling Liberal Party
(LP) because of inter-parliamentary courtesy.“I did not invite him but if he wants to come,
he is welcome. We are observing courtesy,” Ejercito said in a phone interview.Lee’s arrest,
‘delisting’ also to be probedThe Senate first investigated the scam in 2010 under the
leadership of then Senate committee on banks chairman Sergio “Serge” Osmeña III.
Osmeña’s committee found that mismanagement and corruption caused the scam, with Pag-
IBIG officials conniving with Lee.
After Lee’s arrest, Ejercito called for a new Senate investigation, saying he wanted to
investigate Pag-IBIG Fund’s policies on how the double sale and use of ghost borrowers occurred
to protect the public from the “manipulative and anomalous housing loan scheme.”On Monday,
Ejercito said he also wants to invite the leadership of the Philippine National Police (PNP) to
look into Lee's controversial arrest.“We also want them to shed light on the issue
regarding the arrest of Delfin Lee and the alleged intent to delist Mr Lee from the list of wanted
persons,” Ejercito added.Lee’s arrest was contentious because his lawyers clashed with the
police and Pag-IBIG Fund on whether the warrant was still valid after the Court of Appeals
cleared him in the syndicated estafa case. Yet Pag-IBIG Fund and the police argued that the
decision was under appeal before the Supreme Court, and the Pampanga court did not quash
the warrant.Now Pag-IBIG chairman Vice President Jejomar Binay also claimed that
“powerful people” were trying to save Lee. Oriental Mindoro Governor Alfonso Umali
of LP later admitted to calling the police chief to inquire about Lee’s arrest.Controversy also
surrounded the “delisting” of Lee from the police’s most wanted list, and the alleged
demotion of former Task Force Tugis head Senior Superintendent Conrad Capa, who led
the team that arrested Lee.Lee’s lawyer Rivera claimed that his client was “singled out” because
Lee’s daughter Divine was close to Korina Sanchez, wife of Interior Secretary Mar Roxas.
Roxas is Binay’s bitter political rival.Rivera added that other developers also availed
themselves of loans under Pag-IBIG Fund’s express funding window and would have
encountered the same controversy had Pag-IBIG cancelled their contracts as it did with
GA.Ejercito responded, “Why where the other developers able to settle their obligations and no
scandal erupted? That’s why we want to look into the matter because it seems it’s too good to
be true.”Incidentally, Ejercito is a political ally of Binay Pag-IBIG’s safeguardsIn a previous
statement, Binay’s office quoted Berberabe as saying that Pag-IBIG Fund already put in place
the following safeguards to avoid a repeat of the scam:
Noli de Castro to attend Senate housing scam probe
APR 7, 2014 7:06 PM PHT

AYEE MACARAIG
APPENDIX I
What Went Before: The NBN-ZTE deal
Philippine Daily Inquirer / 05:02 AM December 30, 2011
Former President Gloria Macapagal-Arroyo
On April 21, 2007, the government signed the $329-million National Broadband
Network (NBN) deal with China’s ZTE Corp.
The project, which called for the installation of a telecommunications network
linking government offices throughout the country, was signed in China by then
Communications Secretary Leandro Mendoza and ZTE vice president Yu Yong. It
was witnessed by then President Gloria Macapagal-Arroyo.
Read more: https://newsinfo.inquirer.net/119639/what-went-before-the-nbn-zte-
deal-2#ixzz6wQQMsdS1
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook

APPENDIX J
JULY 28, 20145:22 AMUPDATED 7 YEARS AGO
Spending scandal besetting Aquino could hurt Philippines' economy
By Manuel Mogato, Karen Lema
https://www.reuters.com/article/us-philippines-aquino/spending-scandal-besetting-
aquino-could-hurt-philippines-economy-idUKKBN0FW0R120140727
5 MIN READ
MANILA (Reuters) - The biggest political crisis that Philippine President Benigno
Aquino has faced in four years in power could damage his image as a crusader against
corruption and undermine his ability to deliver on reforms to sustain strong economic
growth.
Philippine President Benigno Aquino claps as he attends the conference "Daylight
Dialogue: The Good Governance Challenge" at the presidential Malacanang Palace in
Manila July 15, 2014. REUTERS/Aaron Favila/Pool
The Supreme Court this month declared partly illegal a 145 billion pesos ($3.34 billion)
economic stimulus fund that Aquino created in 2011 from budget savings, sparking a
storm of controversy that has distracted the government from its work.
Economists are also concerned the controversy is slowing public spending because
officials are more wary about accusations of recklessness and are subjecting
decisions to more scrutiny, putting at risk big infrastructure projects.
“If this leads to a slowdown in spending, the risk to growth is on the downside,” Shanaka
Jayanath Peiris, International Monetary Fund resident representative in the Philippines, said
on Friday.
The IMF on Friday cut its Philippine growth forecast to 6.2 percent from 6.5 percent set in
March, partly because of slower spending after the stimulus scandal broke. The
government has set a target of 6.5 to 7.5 percent gross domestic product growth this year,
after 7.2 percent last year.
First quarter GDP growth was at its slowest in two years, in part because of weaker state
spending which grew an annual 2 percent in the period against 10 percent growth a year
earlier.
Henry Schumacher, vice president at the European Chamber of Commerce of the
Philippines, said any more delays to much-needed infrastructure would be a “disaster”.
“There is an over-carefulness in a number of government offices not to move before they are
absolutely sure that every angle where integrity could be compromised has been looked at,”
Schumacher said.
APPENDIX K
For Philippine Family in Politics, Land Issue Hits Home
Workers loaded sugar for delivery last month at Hacienda Luisita, a Philippine plantation that is
owned by the family of former President Corazon C. Aquino.Credit...Jes Aznar for The New
York Times
By Norimitsu Onishi
March 14, 2010
HACIENDA LUISITA, the Philippines — Like his father before him, Buenaventura
Calaquian worked the sugar cane fields at Hacienda Luisita, a plantation owned by the family
of former President Corazon C. Aquino. In the long-running, sometimes bloody battle over
control of the land here, Mr. Calaquian, 58, has come out better than most.
For the last few years, he has illegally occupied 3.7 acres on which he cultivates rice and
vegetables. He spends most days watching his fields from a makeshift shack whose
thatched roof is patched with flattened cardboard boxes. Small profits from tomato sales have
allowed him to buy 50 ducks that now swim in a nearby creek.
“I never want to go back to sugar cane,” Mr. Calaquian said as his wife, Maria, 46, used a single
bucket to carry water from the creek over to several uneven rows of tomato vines. “This is
better.”
Despite the government’s assertion that a two-decade-old land distribution program has been a
success, most farmers in the Philippines have yet to benefit significantly. The uneven
ownership of land, this country’s primordial problem, continues to concentrate economic and
political power in the hands of large landowning families and to fuel armed insurgencies,
including Asia’s longest-running Communist rebellion.
The land problem has drawn fresh attention since Mrs. Aquino’s son, Benigno Aquino
III, declared his candidacy for the May 10 presidential election, running on his mother’s legacy
of “people power.” Though Mrs. Aquino made land reform a top priority, she allowed
landowning families to eviscerate her distribution program. Critics say there is no greater
example of the failure of land reform than her own family’s estate.
For the past five years, the family has been fighting in the Supreme Court a government
directive to distribute the 10,000-acre Hacienda Luisita — the second-biggest family- owned
piece of land in the Philippines, about 80 miles north of Manila — to 10,000 farmers.
APPENDIX L
VP Leni Robredo resigns as Housing Secretary
By CNN Philippines Staff
Published Dec 4, 2016 6:42:31 PM
Updated Dec 5, 2016 11:29:00 AM
A busy Wednesday for Vice President Leni Robredo today, as she started her day with
delivering a keynote message in the AIM Breakfast Forum – Brewing@AIM at the Asian
Institute of Management, Makati City.
Metro Manila (CNN Philippines) — Vice President Leni Robredo has announced that she is
resigning from the President's Cabinet.
In a statement issued on Sunday, the Vice President revealed that she is giving up her post as
Chairman of the Housing and Urban Development Coordinating Council (HUDCC) after she
received a text message from Cabinet Secretary Jun Evasco, Jr., relaying the President's
instruction through Bong Go for her to "to desist from attending all Cabinet meetings starting
December 5."
Robredo called the text "the last straw" in a series of efforts to derail her from doing her job.
Robredo said she is tendering her resignation tomorrow, December 5.
However, she stated that her resignation would not hinder her from continuing her duties as Vice
President
She said she would continue to support positive initiatives by the administration and oppose
those against the people's interest.
Robredo was appointed Chairman of the Housing Committee in July this year.
Below is her full statement:
"We had hoped this day would not come.
I had been warned of a plot to steal the Vice Presidency. I have chosen to ignore this and focus
on the job at hand. But the events of recent days indicate that this plot is now being set into
motion.
From the very beginning, the President and I had major differences in principles and values.
Since I assumed office, I have been consistent in my opposition to issues such as the burial
of former President Ferdinand Marcos in the Libingan ng mga Bayani, extra-judicial killings,
reinstating death penalty, lowering the age of criminal liability, and sexual attacks against
women.
But we both had a mandate to serve the people. I had hoped that this shared commitment to the
poor and marginalized would transcend the differences between us. So, I took the job of
Housing Secretary when it was offered to me.
In barely five months, we have solid accomplishments in HUDCC. This, despite the
obstacles thrown our way, which are:
One, the budget for all key shelter agencies in 2017 has been slashed by more than P19 billion.
Two, all our key shelter agency appointment recommendations have not been acted on. Three,
the Executive Order designed to make HUDCC effective was not signed.
Then, we received a text message last Saturday from Cabinet Secretary Jun Evasco, Jr., relaying
the President's instruction through Bong Go for me "to desist from attending all Cabinet
meetings starting this Monday, December 5."
This is the last straw, because it makes it impossible for me to perform my duties. Hence, I am
tendering my resignation from the Cabinet on Monday, December 5, 2016. With this
resignation, you can expect that I will continue to support the positive initiatives of this
administration and oppose those that are inimical to the people's interest.
However, as your duly elected Vice President, I will not allow the Vice Presidency to be stolen. I
will not allow the will of the people to be thwarted. I will continue to serve the Filipino family
and fulfill their dream for a better life."
Leni resignation letter

APPENDIX M
Low-cost housing backlog swells to 5.7M units
One-stop shop for processing, tax breaks urged
By: Amy R. Remo, Erika Sauler - @inquirerdotnet
Philippine Daily Inquirer / 12:16 AM August 17, 2016
Vice President Leni Robredo INQUIRER FILE PHOTO / NINO JESUS ORBETA
At least 2,600 homes will have to be built every day over the next six years if the new
administration intends to address the massive socialized housing backlog of 5.7 million units
before President Duterte steps down from office.
Stakeholders and government officials explained during the first Housing Solutions
Congress organized by the European Chamber of Commerce of the Philippines Tuesday that the
continued growth of the population, low incomes and the prohibitive costs of owning a home,
scarcity of suitable land and the general unattractiveness of engaging in the business of
socialized housing have been among the major roadblocks hampering the capabilities of both the
private and public sectors to address this backlog.
The government was looking at providing tax breaks to entice private developers to go into
socialized housing projects and help reduce the projected backlog of 5.7 million units, Vice
President and housing czar Leni Robredo said Tuesday.
Robredo warned, however, that the time for counting houses was over and the measure of each
project “will be determined by how many families are happily living in their own homes and
how many communities have been provided with a better way of life.”
In her keynote address at the Housing Solutions Congress, Robredo said the process would
be streamlined both for the beneficiaries and private sector partners.
“We’ll make it a lot easier for beneficiaries of public housing to process their papers. We are
looking at one-stop shop concept where they need to go to only one place, and much of the
paperwork will be done by the shelter agencies themselves,” Robredo said.
There were 1.5 million informal settler families (ISFs) nationwide and around 584,000 were in
Metro Manila, according to the 2011 survey of the National Housing Authority.
Initial figures gathered by HUDCC in 2015 based on shelter plans of local government units
showed that the number of ISFs increased to 2.2 million despite 1 million housing units
subsidized by the government since 2010, Robredo said.
“From 2011 to 2016, the total housing backlog could reach 5.7 million, a result of
accumulated need and future or recurrent need,” Robredo said.
“If we divide the projected backlog of 5.7 million by the number of days in the six years given to
us, we will find that we need to build 2,602 homes per day. And the clock is already
ticking,” Robredo said.
ECCP president Guenter Taus lauded the pronouncements of Robredo, who has sought to
create a more comprehensive roadmap to guide both the public and private sector; to conduct
an inventory of government property that could be converted into mass housing; find the right
model that could be patterned after the best practices of countries such as Hong Kong,
Singapore and Thailand; streamline processes on both the supply and demand side; create a
one-stop shop to expedite the processes involved, and provide tax breaks to make
socialized housing more attractive for local property developers.
Read more: https://business.inquirer.net/213602/low-cost-housing-backlog-swells-to-5- 7m-
units#ixzz6wQXciqfT
APPENDIX N
After ABS-CBN decision, Duterte 'happy' he 'dismantled' Philippine oligarchy
JUL 14, 2020 9:52 AM PHT
PIA RANADA
MANILA, PHILIPPINES
After the rejection of a new ABS-CBN license, President Duterte says he didn’t need to
declare martial law to ‘destroy’ oligarchs
Four days after the rejection of a new license for broadcast giant ABS-CBN, President
Rodrigo Duterte celebrated his supposed success in "dismantling" oligarchy in the
Philippines.
"Kaya ko mamatay, mahulog sa eroplano. I am very happy. Alam mo bakit? Without

declaring martial law, I dismantled the oligarchy that controlled the economy of the
Filipino people," he said on Monday, July 13, in front of soldiers in Jolo, Sulu.
(I can die, fall from a plane. I am very happy. You know why? Without declaring martial
law, I dismantled the oligarchy that controlled the economy of the Filipino people.)
Throughout his speech, he appeared to make no mention of ABS-CBN. But the speech,
aired only the next day, appeared edited.
But the aired version of the speech included a vague mention of powerful families who
controlled Philippine politics by backing electoral candidates who favored their interests.
"Itong mga mayayaman na ginagatasan ang gobyerno at mga tao. Without declaring
martial law, sinira ko 'yung mga tao na humahawak sa ekonomiya at umiipit at hindi
nagbabayad. They take advantage sa kanilang political power," he said.
(These rich who milk the government and the people. Without declaring martial law, I
destroyed the people who hold our economy and who don't pay. They take advantage of
their political power.)
Duterte spun his crackdown on oligarchs as part of his greater 2016 campaign promise to
weed out corruption in government.
He said flushing out corruption from the Customs bureau is small fry compared to
stopping corruption at the highest levels of government.
"Ang corruption na bilyon, sa taas (Corruption in the billions is up there)," said Duterte.
APPENDIX O
Crony capital: How Duterte embraced the oligarchs
President Rodrigo Duterte promised to destroy the Philippines' elite. Instead, he chose his own
AURORA ALMENDRAL, Contributing writerDECEMBER 4, 2019 15:10 JST
MANILA/DAVAO, Philippines -- The day Rodrigo Duterte became president, Roberto Ongpin was one of
the Philippines' richest men. Ongpin had survived -- and prospered -- under six presidential
administrations by trading favors and greasing friendships with politicians. He had a full arsenal of
luxuries at his disposal, including a billionaire's island dotted with villas, serviced by butlers and
accessible by a fleet of private jets, and an exclusive club at the center of the capital's business district,
where the whiskey was poured each day at precisely 5 p.m. and far into the night.
During his populist campaign for president in 2015 and 2016, Duterte took aim at the
corruption and excesses of wealth-hoarding ruling families like Ongpin's. He called them "a cancer
on society," and "illustrious idiots" who flew around in private planes while the Filipino people suffered.
Then, just four days into his term, Duterte unloaded. "The plan is to destroy the oligarchs
embedded in the government," he said. "I'll give you an example publicly: Ongpin, Roberto."
Shares of Ongpin's public companies plummeted. By Duterte's second month in office, the tycoon
had stepped down as chairman of PhilWeb, his online gambling company. "He knew the game was up,"
Apa Ongpin, Roberto's nephew and former executive at PhilWeb, recounted in an interview with the
Nikkei Asian Review.
The stunning takedown of a man who was a fixture in the murky borderlands between
Philippine politics and business sent waves of shock and fear through the country's elite.
Three years on, what Duterte framed as a systemic transformation has come to look more like a personal
vendetta. One prominent tycoon who spoke on condition of anonymity described the takedown of
Roberto Ongpin as ultimately insignificant -- "a grain of sand." Rather than sending a clear message
to the country's business oligarchs, the episode left many believing that Duterte has simply opened
the door to a new wave of businesspeople and loyalists, who have been given access to political power
and lucrative government contracts.
"The cast of characters is not changing," said Lala Rimando, a journalist, who is writing a book on the
Philippine business elite. "They're just being added to."
One former high-ranking elected official went a step further. Far from taking down a system of
businessmen and politicians working together for personal profit, Duterte is "cultivating his own set of
cronies," he said.
Davao connections
Few men have had a more spectacular rise than Dennis Uy.
Uy, a 45-year-old third-generation Chinese-Filipino from Davao del Norte, is the son of
provincial traders who dealt in copra, maize and bananas. As he described in an interview with Nikkei in
2017, Uy met Duterte in Davao city, where he was mayor for over two decades. The men became
friends. "He is a mentor in life [and] in leadership," Uy said of Duterte.
Uy built Phoenix Petroleum Philippines, his fuel company, into one of the largest in the country, capable
of going head-to-head with Chevron. He also expanded his business into shipping and logistics. By 2016,
Uy was one of Duterte's top presidential campaign donors. The next year, Duterte rang the bell at the
Philippine Stock Exchange on the 10th anniversary of Phoenix going public. Uy and Duterte patted
each other on the shoulders and traded effusive public compliments.
Since then, Uy has embarked on a head-spinning acquisition spree: convenience stores, a digital startup,
a casino franchise, a bakery chain, a Ferrari dealership, and a water utility -- H2O Ventures, which
was used to gain a backdoor listing on the stock exchange, and has since been turned into a casino
developer. On top of all that, he gained rights to develop a 177-hectare multiuse city with office
buildings, high-end retail outlets, sport centers and a resort, rising from a former American air base 90
km north of Manila.
Uy has racked up directorates and seats on the boards of companies, many of them owned by old-
money oligarchs eager to associate with a man so closely linked with Duterte. Before Duterte became
president, Uy was on the board of three public companies. By 2019, Dow Jones research shows that he
is CEO, chairman or director at 27 firms, and a member of numerous professional and regional
organizations. This year, he debuted on Forbes' list of the richest Filipinos at number 22. He has, in the
past, denied using his personal relationship with Duterte for economic gain. Uy did not respond to
multiple requests for an interview for this article.
Even though Uy projects an image of soft-spoken, provincial humility, one tycoon who has had dealings
with him described a man fond of ostentatious displays of wealth and with a penchant for sports
cars and other luxuries.
"He has a Richard Mille watch that you should not be wearing when you've got so much debt to the
banks," he said, referencing timepieces that sell for six figures. He wants to be a "big shot," the tycoon
said. "He wants to be the next taipan."
His rush to the top has been fueled partly by borrowing. Uy is estimated by Forbes Asia to have amassed
around $2 billion in debt.
Uy's next venture takes him into a sector that has long suffered from the concentration of power in
the Philippines' political and business communities: telecommunications. Dominated by two
companies headed by the country's richest families -- the Zobel de Ayala family, who are majority
stakeholders of Globe Telecom, and the tycoon Manuel V. Pangilinan of Smart Communications -- the
industry has long been a cautionary tale of regulatory capture, stifled competition and the power
of the oligarchy.
In 2016, at the start of Duterte's presidency, telecommunications service in the Philippines was a hair-
pulling combination of dropped calls, webpages that struggled to load, unstable connections and
buffering video broken up by brief spells of pixelated images. The poor service was a drag on
businesses dependent on internet services. In Asia, the only country with slower service than the
Philippines was Afghanistan, and access costs more than triple the global average.
Duterte railed against the companies, referring to them as a price-controlling cartel and
threatening to break up the duopoly with foreign competition. The telcos responded to the threats
and speeds doubled within three years, but the Duterte administration pressed on with the promise
of a third telco anyway.
In the final round of bidding for the third license, a joint venture between Dennis Uy's company, Mislatel
-- now known as Dito Telecommunity -- and the Chinese government-backed China
Telecom remained as the sole contender. Mislatel won the deal despite Uy having little or no
experience in telecommunications. Critics cried foul, alleging that some of Duterte's closest political
associates had been spotted riding in Uy's private jets and summering in his luxury mountain villa, and
that they had sped up the bidding process.
"As it is, it's now oozing with preferential treatment and, at worst, cronyism," Antonio Trillanes IV, a
former senator and vocal critic of Duterte, said of the selection shortly after the announcement of
Mislatel's win.
Ronald Mendoza, dean at the School of Government at the Ateneo de Manila University, said that the
bidding process lacked transparency and the ultimate outcome -- that a company "very, very much
linked to the Duterte administration" emerged in the final stage as the sole contender -- is
"arguably the creation of yet another powerful force of economic concentration."
The telco episode appeared to have traded on political favoritism and rent-seeking, the same currency
used by the existing telco companies, which resulted in the dismal state of Philippine
telecommunications.
The deal is not likely to be seen as a signal that change has come, Mendoza said. "In fact, what that
episode signaled is more of the same."
One businessman with knowledge of the sector had a different interpretation -- that Uy was doing
Duterte a favor. "The next five years is not, in any form, going to be a good investment for
anyone," he said. "Not for China Telecom, not for decades. But Dennis had to do it, because there's
going to be a lot of egg on the president's face if the third telco project didn't happen."
Payback
As fellow Davao native Dennis Uy makes his name nationally, government funds are flooding into
Duterte's home province. Between 2016 to 2017, the budget for the Department of Public Works
and Highways Region XI, which encompasses Duterte's stronghold of Davao city, Davao del Norte,
Davao del Sur and Davao Oriental, increased by over 100%. By comparison, other regions have had
their DPWH numbers flatline, and the national average increased by 31%.
Backhoes, bulldozers and dump trucks are parked up on the sides of the roads next to piles of gravel
and rolls of geotextile. Men with their faces wrapped in T-shirts to keep off the sun hoist
scaffolding and sacks of cement onto their shoulders at dozens of public and private
construction sites scattered across Davao city.
Public infrastructure investment has boosted private businesses. Ayala Land, part of one of the
Philippines' most prominent family conglomerates, broke ground on a 20 billion peso ($393 million)
mixed-use development in Davao city in 2017. Business delegations from China, Singapore, the United
Arab Emirates and Taiwan have visited Davao, scouting for opportunities. According to data from the
Davao City Chamber of Commerce and Industry, new business registrations in the first half of 2019
indicate a sharp increase in investments in the city, a development they credit to the increase in
attention from the national government.
For some, the money is there for the taking. In 2017, Don-don Opreza stumbled onto a group of
contractors while strolling the beach behind his house. They were struggling to find an access point to
a new coastal road project, causing delays. Opreza paid 30,000 pesos to a neighbor for the access
road. The contractors rewarded him with the rights to supply construction materials to the coastal
road.
Trucks started lining up outside his container box office, heaving with boulders, armor rocks and backfill
sand. As a middleman, Opreza tripled his earnings from his previous business supplying itinerant
harvesters and laborers to the region's banana plantations. In comparison, counting the trucks coming
in was easy money.
"I still can't believe the opportunity," Opreza said, who is settling into his new role as patriarch of his
extended family, sending nieces and nephews to college, paying for vacations to the United States
and buying up prime lots for his own mango and banana plantations. Even as he praises Duterte for
allowing small players like himself to chip off a piece of wealth, he mentions a new supplier for the
coastal road, someone close to a local politician, with whom he was recently compelled to split volume,
handing over what he estimated to be 40% of the business.
"It's good, it's normal," Opreza said in defense of his competitor using political influence to gain market
share.
Despite all the money flowing in, progress has actually been stop-start, as companies with capital
and political connections capture projects they may not have the capacity to finish, leading to delays.
In 2019, the Commission on Audit found more than 4,000 DPWH projects were delayed
nationwide, worth a total 118.4 billion pesos.
On a recent Wednesday afternoon at the new coastal road, among the largest projects
currently underway in Davao, there were few workers to be found. A lone backhoe shifted rocks
just by the coastline, and a black dog loped across the empty expanse of the construction site while a
toddler in diapers dug into the sand with a plastic shovel. Dean Ortiz, spokesperson for DPWH Region
XI, said that in 2019, the agency's goal was to complete 1.1 km of the planned 18 km road.
John Carlo Tria, vice president of the Davao City Chamber of Commerce and Industry, said the
increased budgetary attention from the national government has spurred private investment in Davao,
but project delays were in danger of letting the moment slip away.
"People are seeing the potential, but they are apprehensive at the same time," Tria said.
While the region desperately needs infrastructure, at the moment only a small number of people
are benefiting from the influx of state funding.
A 2018 investigation by the Philippine Center for Investigative Journalism found that just a handful
of large companies have scooped up most of the infrastructure projects in the Davao region, more
than they could finish. The report singled out CLTG Builders, a company owned by Desiderio Go, the
father of Duterte's longtime special assistant and current senator, Christopher Lawrence T. Go, who
bears the same initials as his father's contracting company. According to the PCIJ investigation, the
construction company has won over 700 million pesos in contracts from DPWH since Duterte became
president in 2016. At the time of the investigation, all of CLTG's projects were delayed.
President Rodrigo Duterte campaigns as a candidate in Davao in 2016. © Reuters
Opposition politicians called for a Senate investigation into what appeared to be preferential
treatment given to the family members of Duterte's closest aide, an accusation Go denies. Ortiz said the
agency did not conduct an investigation, but confirmed that following the accusation, CLTG did not bid
for new contracts with DPWH in 2019.
One contractor, who requested anonymity to protect his business, said that while his company has
grown steadily in recent years, he had not seen a spike in projects as a result of the increase in
government investments.
"Those funds are intended for the construction companies close to the politicians," he said. "It's an open
secret."
Emerging and midsize contracting companies like his cannot afford the bribes, which he said typically
ranged from 5% to 10% of the contract value. He said that the large contracting companies should
focus on complex projects of national importance and leave simple road projects to smaller
companies. "Of course progress is going to be slow," he said. "They're clogging up the system."
The booming infrastructure industry in Davao could become another cautionary tale on the dangers
of an economic system run by rent-seeking oligarchs, with the result of poorer services for average
Filipinos, whether in roads, transportation, or telecommunications, critics say.
"This cycle of groups benefiting from political connections, but not necessarily innovating, nor thriving
in a competitive environment, will certainly hit consumers. But I think that the most pernicious effect is
in terms of job creation," Mendoza said. "Where rent-seeking is rampant, and corruption is always a
threat, that environment is not conducive to sustained growth and job creation."
Vested interests
Despite his populist claims, Duterte has shown himself willing to work with the Philippines' old- money
families.
The Del Rosario-Floirendo clan in Davao del Norte has long stood for the provincial
consolidation of power in business and politics. For more than three decades, the keys to the
governor's mansion and the seats to Congress passed between members of the clan. They ran one of
the world's largest banana plantations on land leased from the government. The clan owned the
provincial banks, sold the farm inputs at high prices and bought the harvest at below-market rates.
After farmers defaulted on their loans, they came to own the farmers' land as well.
This year, in midterm elections, a new candidate stood against them. Edwin Jubahib, the son of farmers,
had to practice putting gel in his hair and walking in hard-soled leather shoes before facing down
the incumbent governor and scion of the ruling clan, Rodolfo del Rosario, Jr.
He tapped into the rising frustration among voters in Davao del Norte and won by a landslide.
Jubahib's spectacular takedown of one of the Philippines' most entrenched political dynasties should
have been the embodiment of Duterte's public support of populist ideals. Jubahib even partially modeled
himself on Duterte, copying his "open door" style of leadership, in which constituents are able to visit
his office and petition him directly.
In the midterms, however, Duterte backed the incumbent. Antonio Floirendo Jr. donated 75 million
pesos -- the largest cash donation by far -- to Duterte's presidential campaign.
Paolo Duterte, son of Rodrigo Duterte and then-vice mayor of Davao, listens to his lawyer during a
Senate hearing on drug smuggling in 2017. © Reuters
Being close to Duterte is no guarantee of safety. Several of the president's friends and relatives have
come into government only to be arrested, compelled to step down, or investigated for
corruption.
Jesus Dureza, a friend of Duterte's since high school, resigned as presidential adviser after two of his
officers were fired for corruption. In September 2017, the president's son, Paolo Duterte, vice mayor
of their hometown, was hauled before a Senate inquiry into a $125 million shipment of illegal drugs
that came into the country through Manila. Four months later, Paolo stepped down after a public
fight with his daughter on social media. He has since been elected to Congress.
Duterte's former foreign secretary, Perfecto Yasay, was arrested on charges of bank fraud. His first
secretary of justice, Vitaliano Aguirre, was accused by rival and gaming operator Charlie "Atong" Ang of
protecting Kim Wong, a casino magnate who was implicated in a billion-dollar heist from the
Bangladeshi central bank, whose perpetrators used bank accounts in the Philippines to launder the
money. Aguirre has denied the allegations.
The remaining old-money families, however, do not appear to be running scared. Duterte's
populism has proved hollow, with limited benefits for average Filipinos, and few real
implications for the elite. An October 2019 poll by Social Weather Stations, a local agency, found
Duterte's approval rating among the rich and middle class to be at its highest since the start of his
presidency, even as it slips among the poor.
"They have no real vision except disruption. They've anchored everything on disruption. Change is
coming," said Apa Ongpin, referring to Duterte's campaign slogan. "But what does that change? They
don't know."
An October 2019 survey by political polling agency Social Weather Stations found Duterte's approval
rating among the rich and middle class to be at its highest since the start of his presidency, even as it
slips among the poor. © Reuters
As for Roberto Ongpin, he is still one of the Philippines' richest men. Ongpin sold his shares of PhilWeb
at a deep discount to Gregorio Araneta III, the son-in-law of Ferdinand Marcos, the former dictator,
who along with his wife Imelda, created the blueprint in the Philippines for cronyism and
kleptocracy and whose family remains one of the Philippines' most enduring political dynasties. Far from
taking down the oligarchy, Duterte's attack on Ongpin merely transferred some of his wealth to a more
powerful family with whom Duterte has maintained a strong alliance.
In the glittering, softly scented lobby of the Shangri-La Hotel, a luxury franchise his uncle brought
to the Philippines 30 years ago, Apa Ongpin thought for a moment about other wealthy families who
should fear Duterte's distinctive brand of populism. As he considered the question, waiters in national
costume quietly laid pressed-cloth coasters under glasses of sparkling water and picked up dropped
napkins.
"No," Apa said, "I can't think of a case of anyone who should be worried right now."
CLARIFICATION: The original version of this story stated that Dennis Uy had acquired a water utility.
His company did acquire H2O Ventures in 2017, using the business to gain a listing on the
Philippine Stock Exchange. H2O Ventures sold its water utility business and was subsequently
renamed PH Resorts, under which it develops real estate. We also stated that Dennis Uy is on the
board of 27 public companies. Dow Jones research shows that he is CEO, Chairman or a Director on the
board of 27 companies.
APPENDIX P
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https://www.ft.com/content/c295d548-51b0-11ea-90ad-25e377c0ee1f
Philippines: Rodrigo Duterte takes aim at the oligarchs The president has turned his populist
fire on big business, but is he attacking corporate greed or political opponents? © FT
montage Share on Twitter (opens new window) Share on Facebook (opens new window) Share
on LinkedIn (opens new window) Save John Reed in Manila FEBRUARY 23 2020 24 Print
this page At a cabinet meeting on December 2 in Manila’s Malacañang Palace, Rodrigo Duterte
flew into a rage on hearing some bad news. The president was informed that Manila Water,
owned by Ayala Corp, the Philippines’ oldest and biggest conglomerate, had won a 7.4bn
Philippine pesos ($145m) arbitration award in Singapore stemming from a dispute over water
rates, brought by the companies when his predecessor, Benigno Aquino III, was in power. It was
the Singapore tribunal’s second such ruling against the government: the conglomerate First
Pacific, which runs Manila’s other water company, had already won 3.4bn pesos in a similar
dispute in 2018. Manuel Pangilinan, CEO of First Pacific, whose Maynilad Water
Services is renegotiating its contract after a tirade against him by President Rodrigo Duterte
© Anthony Kwan/Bloomberg After taps ran dry in thousands of Manila households during
2019’s hot season, water became a sensitive issue for a leader who styles himself as a
champion of the people. Mr Duterte has, in turn, made it one for the rich men who control
the Philippines’ biggest companies — “oligarchs”, as he has begun labelling them, such as
Ayala’s chief executive Jaime Augusto Zobel de Ayala and Manuel Pangilinan, his
counterpart at First Pacific. “If Ayala and Pangilinan are your friends, kindly tell
them . . . if we see each other, no matter how many bodyguards you have, I can ruin your face,
you son of a bitch,” the president declared in a speech that turned into a tirade the day after the
Singapore court decision. He accused Ayala Corp of evading taxes, and demanded a
renegotiation of the two companies’ water contracts. Both are now under renegotiation, and
Manila Water and First Pacific’s Maynilad Water Services have renounced their
arbitration awards. This was one of the most sharply targeted verbal attacks Mr Duterte has
unleashed since taking power in 2016 — part of a populist wave across the world — and
indicates that he wants to move on from taking on drug dealers to confronting some of the
country’s most powerful people in the final two years of his presidency. Some Manila
businesspeople see it as a defining power play by a leader seeking to hone his legacy. Ayala’s
chief executive Jaime Augusto Zobel de Ayala. 'If Ayala and Pangilinan are your friends, kindly
tell them . . . if we see each other, no matter how many bodyguards you have, I can ruin your
face, you son of a bitch,' the president declared © Paul Miller/Bloomberg Mr Duterte, 74, has
since stepped up his verbal attacks on “oligarchs”, delighting his tens of millions of
supporters but sending a chill through big business. On February 10, in a move Filipinos saw as
an assault on both media and big business by a president who distrusts both, Jose Calida, the
solicitor general, filed a supreme court petition calling for the licence of ABS-CBN, the
Philippines’ biggest broadcaster, to be revoked. Businesses and analysts say the attacks bode ill
for a country that was until recently one of the region’s fastest-growing economies.
“Institutional investors are starting to wonder who is going to be next, after the Ayala and
Pangilinan companies,” says Romeo Bernardo, a former under-secretary of finance in the
Corazon Aquino and Fidel Ramos presidencies who also sits on several company boards. Many
of those interviewed by the Financial Times say the attacks on the family-controlled
companies are ill-judged and that the scrapping of the water agreements and push to strip ABS-
CBN of its licence could hurt investor confidence. Economic growth and foreign
investment are already slowing, and Mr Duterte’s signature “Build Build Build”
infrastructure programme is running well behind schedule. “I think there is a short-term shake in
investor confidence,” says James Su, an infrastructure analyst with Fitch Solutions in
Singapore. “This incident showed they have the ability to use their regulatory power to overrule
contracts.” Ayala’s Manila Water has lost more than a third of its market value since Mr
Duterte’s attack on it. Shares of its parent group and real estate, telecoms and other units have
also fallen. First Pacific’s shares are down more than 16 per cent over the same period. This
month Ayala announced that it had agreed to sell control of its water business to Enrique Razon,
a ports tycoon in better standing with Mr Duterte. Many Filipinos believe the water affair, and the
government’s move to shut down ABS-CBN, controlled by the powerful Lopez family, have a
political dimension. All three families have in the past supported the Liberal camp of Ms Aquino,
associated with the colour yellow, which Mr Duterte swept aside after he took power in 2016.
“The Ayalas and the Pangilinans are known as businessmen who are not aligned with the
president — supposed ‘yellow’ oligarchs who support liberal initiatives,” says Richard Javad
Heydarian, a political analyst. “They have . . . openly criticised him.” Mr Duterte’s own
broadsides against the oligarchs have boosted his popularity. Since his December 3 speech,
a man who was already the most popular president in modern Philippine history has seen his
approval rating climb by seven to nine points, according to the country’s two most closely
watched polls. Ayala and First Pacific both declined to comment. Mr Duterte’s office referred
an interview request to Menardo Guevarra, justice secretary, who says the renegotiation of the
water contracts was about upholding Philippine law, asserting that some provisions of the
contracts were illegal or unconstitutional and ensuring the public have a fair deal. “The
president got mad not because the owners were the Ayalas or the Pangilinans, but because
of the provisions in the contracts which he found to be onerous,” Mr Guevarra says. “That’s
where his anger began; it had nothing to do with the owners.” Mr Duterte’s criticism of
oligarchs has been part of his outsider appeal since his days as a politician in the
southern city of Davao, though he himself grew up in a well-to-do political family and trained
as a lawyer. In the Philippines, people sometimes speak of the “10 families” who are said to
control the economy and politics, and the Ayalas and the Lopezes typically make the list. Many
Filipinos — even those who are critical of the president — believe the conglomerates have
grown rich by engaging in rent-seeking behaviour or outright state capture. At the same time
Philippine family companies, from conglomerates such as SM Investments and JG Summit
to the emerging fast-food multinational Jollibee Foods, have been an engine of growth in a
country with a chronically inefficient state sector. Ayala’s own history dates back to Spanish
colonial rule in 1834, and its holdings range from telecoms company Globe to the lender BPI and
Palawan island’s upscale El Nido resorts. While inner Manila, including the area around the
Malacañang palace, is blighted with slums, Ayala’s land division was the leading
developer in the Makati business district, where a park and an avenue bear the family name,
and Bonifacio Global City, a high-rise neighbourhood that is home to many international
outsourcing and call centres. The water contracts that provoked Mr Duterte’s wrath were drawn
up under the Ramos presidency in 1997, an era when privatisation and “public private
partnerships” were popular in the Philippines and globally. With advice from the
International Finance Corp, the World Bank’s private sector arm, the government put out tenders
for water concessions in Manila to address the state’s failure to provide the capital with an
adequate service. But crucially the development of water resources remained under state control.
More than two decades later, greater Manila still depends on a single dam at Angat, north of
the city, to supply water for more than 15m people. After foot-dragging by several
governments, work is progressing on a second dam project at Kaliwa, which the Duterte
government plans to finance with Chinese loans. When drought hit the Philippines in 2019,
the water companies had to ration supplies, and Mr Duterte, say analysts, found an easy target in
the companies. “Duterte doesn’t see the Ayalas and the Pangilinans as national
champions, he sees them as big businesses squeezing the poor,” says Eduardo Araral, an
associate professor at the Lee Kuan Yew School of Public Policy, National University of
Singapore. “He is a lawyer, and saw some justification for taking them down, especially after the
Singapore arbitration awards.” Mr Duterte’s feud with ABS-CBN goes back even further. In May
2016, on the eve of his landslide victory, the station failed to air one of his campaign ads. It has
declined to say why. But since then Mr Duterte has repeatedly railed against the network,
threatening to make sure it loses its franchise when it comes up for renewal on March 30.
Businessman Dennis Uy, centre, an ally of the president who appeared for the first time on
Forbes’ list of the richest Filipinos in 2019, with a net worth of $660m © Veejay
Villafranca/Bloomberg The station has also reported critically on extrajudicial killings during
his “war on drugs”, his trademark policy that has resulted in more than 5,500 deaths,
according to official figures. In what appeared to be a thinly veiled threat, Mr Duterte in
December said of the Lopez family’s stake in ABS-CBN: “If I were you, I’d sell it.” The
comments were seen in Manila as an invitation for more sympathetic owners of the
broadcaster to step forward. Mr Heydarian believes the president is seeking to promote a new
class of rich men who support him, whom he dubs the “Dutertegarchs” — analogous to the
“Boligarchs” who grew rich under Venezuela’s late president Hugo Chávez. Despite his stated
hatred of oligarchs Mr Duterte has courted alliances with some, including Dennis Uy. A
contributor to the president’s 2016 campaign, Mr Uy led the Mislatel consortium that in 2019
won the licence to run the Philippines’ third telecoms network, since renamed Dito
Telecommunity. Little known outside Davao before Mr Duterte’s rise to power, Mr Uy
appeared for the first time on Forbes’ list of the richest Filipinos in 2019, with a net worth
of $660m. The billionaire Manuel Villar, whose wife is the pro-Duterte senator Cynthia Villar
© Noel Celis/AFP/Getty In November he bought a 45 per cent stake in Malampaya, the
country’s largest gasfield, from Chevron for an undisclosed sum. As Mr Duterte’s attacks
on the water companies escalated, he praised the billionaire Manuel Villar, whose wife is the pro-
Duterte senator Cynthia Villar, leading some to suggest that the family’s Prime Water
business might be seeking to enter the market in Manila. Mr Villar described this as
“speculation” in Philippine media, and said he and the president did not discuss it. Both Mr Uy
and Mr Villar declined interview requests. When asked about the water dispute, the justice
secretary Mr Guevarra voiced confidence that the new contracts could be drawn up in a way
“that would eliminate unlawful provisions”. And he dismissed the notion that voiding the old
agreements would hurt the country’s investment climate. “Maybe in the short term, it will
have a chilling effect on foreign investors, when you think a government is interfering in
contractual relations and changing the rules of the game midstream,” says Mr Guevarra. “But in
the long run, when you have a contract that’s equitable and fair to both sides, foreign
investors will see that contract as a more stable one than a contract that is highly
profitable to investors, but subject to potential abrogation anytime.” Recommended
Philippines Philippine leader threatens companies in dispute over water Many companies might
draw a different conclusion. “This is a government that doesn’t respect contracts, so how can you
do business with it?” says one senior fund manager in the Philippines. “[It] doesn’t respect
arbitration awards, even China will notice that.” Some believe the clashes between the Duterte
administration and businesses in the Philippines will accelerate the process of cash-rich
conglomerates seeking new places to put their money. “Big business groups view this [the
water contracts] with alarm,” says Mr Bernardo, the former finance official, whose
directorships include two Ayala-controlled companies, Globe and BPI. “It will reinforce what
they want to do anyway: diversify outside the country.” Before the water dispute came to a head,
Ayala was putting money into a range of businesses, from Malaysian real estate to an
automotive technology company in Germany, solar panels in the US, and two companies
controlled by Myanmar-born tycoon Serge Pun. Back in Manila, Ayala is hammering out details
of a water agreement with its new shareholder Mr Razon set to join the business. “The game
plan for many of these businesses is to ride out the rant, then quietly fix things behind the scenes,”
says Ronald Mendoza, dean of Manila’s Ateneo School of Government. “But by then your
stocks have fallen.” Additional reporting by Guill Ramos ABS-CBN: why popular
broadcaster is in president’s sights Rodrigo Duterte’s war on the families behind
Manila’s water concessions is mostly happening above the heads of ordinary Filipinos. But the
president’s threat to take ABS-CBN, the country’s largest broadcaster, off air is causing millions
to take notice. The network is the country’s most viewed, thanks to shows like its nightly
Tagalog-language newscast TV Patrol and the long-running police drama Ang
Probinsyano. But ABS-CBN has long been a target of the Duterte administration, with the
president threatening to allow its franchise to expire when it comes up for renewal on March
30 — a decision now in the hands of Congress. This month Jose Calida, the solicitor general,
called on the supreme court to revoke ABS-CBN’s broadcasting licence, accusing it of “highly
abusive practices”. Some of the accusations against ABS-CBN have a familiar ring: as in the case
of Rappler, the news website facing legal action by Philippine authorities, Mr Calida has accused
the network of evading taxes and breaking the law by using Philippine Depositary
Receipts, a security several other media companies have deployed to address a
constitutional ban on direct foreign investment in the sector. Mr Duterte’s spokesman says the
palace had nothing to do with Mr Calida’s petition. Few in Manila believe that, and the
supreme court is packed with the president’s nominees. ABS-CBN denies the charges. “We
have all the government and regulatory approval for our services,” says Kane Errol Choa, the
company’s head of communications. Unlike Ayala and First Pacific, which have kept quiet
after being attacked by Mr Duterte, ABS-CBN is covering its legal battle as news. Mr Calida
last week asked the supreme court to impose a gag order to stop the station and its
executives from discussing the case. The court has yet to decide on whether it will grant the
order.
APPENDIX Q
https://www.lamudi.com.ph/journal/richest-filipinos-in-2018-real-estate-tycoons/
Exponential growth in the Philippines’ real estate and property development sector fuels wealth
of Filipino billionaires.
Despite the current fascination with the constantly and rapidly evolving virtual
technology realm that has created a ton of billionaires in the planet over the last few decades,
nothing beats investments in real estate as a solid barometer when measuring someone else’s
wealth.
When Forbes Magazine came up with its latest list of the country’s richest tycoons in
September 2018, the most notable billionaire who had leapfrogged from the list was former
senator Manny Villar, a self-made billionaire whose primary business interest is in real estate
and property development. With a net worth of $1.6 billion in 2017, the real estate tycoon
more than tripled his net worth in a span of one year to $5 billion, according to the
business magazine which publishes an annual list of the world’s wealthiest individuals.
Exponential growth in property development
Villar, a former presidential candidate who lost to former president Benigno “Noynoy” Aquino
III, jumped to the number 2 spot in that list, replacing tycoon John Gokongwei, Jr.—who also has
considerable business interests in real estate and property development, apart from an array of
other businesses that include an airline company called Cebu Pacific and Universal Robina
Corporation, a food and beverage conglomerate. Gokongwei, Jr. has slid to the number 3 spot
with a net worth of $4.4 billion. As the second richest person in the Philippines, Villar’s rank in
the Forbes Magazine list has been his highest since he was first included in the exclusive circle of
billionaires in 2006.
According to Forbes Magazine, the increase in Villar’s net worth can be attributed to his
property development firm Golden Bria Holdings, a memorial parks operator (its former name
was Golden Haven) that diversified and focused on real estate development. The firm’s share
price registered a whopping 1,300 percent increase early last year. The highly profitable burial
services business was merged with another Villar company that develops housing projects
and residential condominiums for middle-class Filipino families.
His two other publicly listed real estate firms—Starmalls, Inc. (a mall operator) and Vista
Land and Lifescapes (a property development company that has a dozen real estate
portfolios and projects across the archipelago)—have also experienced remarkable growth
in the country’s property development sector. Over the years, the Philippines has seen
exponential growth in the real estate and construction industry.
Filipino billionaires
The Philippines’ wealthiest people in the Forbes Magazine list have, in one way or another,
considerable investments in real estate and property development—whether it involves housing,
residential condominiums, retail, and commercial, or leisure and entertainment. It remains
one of the more common businesses that the country’s richest individuals have. Even the wealth
of Henry Sy, Sr., who maintained his rank on the top spot of the Forbes Magazine list with a
fortune of $18.6 billion, has benefitted from the astonishing growth of his companies that are
primarily anchored on real estate.
Based on the Forbes Magazine list, Lamudi has rounded up the 10 richest real estate tycoons
in the Philippines in 2018:
Henry Sy (Net Worth: $18.6 billion)
Henry Sy. Photo via Businessworld
The retail king of the Philippines and his family own what many consider as the most
ubiquitous mall chain and the largest retailer in the country. Henry Sy’s fortune is
anchored on his stake and interest in SM Investments Corporation, which he founded in 1958 as
a shoe store named Shoe Mart. The company has business interests in shopping mall
development and management, retail, real estate development, banking, and tourism. Sy’s
children now run SMIC.
One of its subsidiaries, SM Prime Holdings, Inc., is the largest property conglomerate in the
Philippines and one of the real estate industry leaders in Southeast Asia. It is the largest mall
developer, both in terms of gross floor area and geographical reach, and operates close to 60
malls in the Philippines and six in China. It also specializes in residential properties, with various
premium middle-market developments across Metro Manila, as well as luxury residences in
Tagaytay City. It operates the Mall of Asia complex, a residential, business, and tourism district
located on reclaimed land in Pasay City.
2. Manny Villar (Net Worth: $14.2 billion)
Manny Villar. Photo via Primer
Manny Villar is more popularly known in the world of politics, having served as Senate
president during his term. His wife Cynthia is currently a senator while son Mark is the current
secretary of the Department of Public Works and Highways. During his younger years, Manny
Villar worked for one of the country’s largest accounting firms after graduating from the
University of the Philippines. He eventually resigned to start his first business, which
delivered seafood to public market stalls.
His real estate venture began in 1975 when he purchased two reconditioned trucks to start a
business delivering sand and gravel for construction companies in Las Piñas. This soon led to
building houses. A loan that he borrowed from a rural bank marked his initial foray in
property development: Camella Homes Phase 1 and 2, which are located in Las Piñas.
Villar’s Vista Land & Lifescapes (VLL) Inc. is now one of the Philippines’ largest real estate
developers. In 2015, Villar formed Vitacare Healthgroup, Inc. that would venture into building
a chain of hospitals nationwide.
3. John Gokongwei, Jr. (Net Worth: $4.4 billion)
John Gokongwei Jr. Photo via Selfmade PH
John Gokongwei, Jr. is the chairman of Robinsons Land Corp. and a slew of other
business conglomerates whose interests range from airline operations (Cebu Pacific) to food
and beverages (Universal Robina Corporation, makers of Jack and Jill products and C2 drinks).
He is the founder and chairman emeritus of JG Summit Holdings, Inc., one of the largest
conglomerates in the country.
Robinson’s Land Corporation is the real estate arm of JG Summit. It is involved in the
development and operation of shopping malls and hotels and is also one of the country’s most
well-known developers of mixed-use properties, office buildings, residential houses, and
condominiums, as well as socialized housing projects in key cities and other urban areas
nationwide.
4. Jaime Zobel de Ayala (Net Worth: $4 billion)
Jaime Zobel de Ayala. Photo via Success Story
The chairman emeritus of the country’s oldest and most diversified conglomerates, Ayala
Corporation, continues to remain as one of the country’s most respected business leaders. Ayala
Corporation has business interests in real estate and property development (Ayala Land),
telecommunications (Globe Telecoms), banking (Bank of the Philippine Islands),
education, pharmacy, automobiles, and semiconductors, among others.
Ayala Land continues to be at the forefront of real estate and property development and is seen
by many as an innovative leader in high-end vertical and horizontal property projects, which
include Nuvali in Sta Rosa Laguna and Serendra in Bonifacio Global City.
5. Enrique Razon, Jr. (Net Worth: $3.9 billion)
Enrique Razon, Jr. Photo via Wall Street Journal
The Spanish-Filipino business leader is the chairman and chief executive officer of
International Container Terminal Services, the country’s largest port operator. The firm also
operates subsidiaries in Eastern Europe, Africa and the Americas. Since inheriting the
company from his father in 1987, Enrique Razon, Jr. has transformed it into an industry leader.
Razon is also the head of Bloombery Resorts, which operates Solaire Resorts and Casino in
PAGCOR’s Entertainment City. The company plans to build a similar venture in Quezon City on
a 15,676-square-meter property that Sureste Properties, Inc. (a real estate firm owned and
controlled by Razon) purchased from the National Housing Authority for 1.9 billion pesos.
6. Tony Tan Caktiong (Net Worth: $3.85 billion)
y Tan Caktiong. Photo via Success Story
The founder and chairman of the country’s biggest and most popular fast-food chain, Jollibee,
has expanded his business venture into property development following his partnership with
entrepreneur Edgar “Injap” Sia II, the founder of Mang Inasal, a fast-food chain whose primary
product is grilled chicken.
In 2012, Tan Caktiong’s HoneyStar Holdings acquired a 50 percent stake in Sia’s Injap Land,
resulting in a business venture that is now called DoubleDragon Properties Corp. The firm’s
goal is to accumulate one million square meters worth of leasable space by the year 2020, almost
70 percent of which will be from a hundred community malls under its CityMall
subsidiary, which is in partnership with Henry Sy’s SMIC.
7. Lucio Tan (Net Worth: $3.8 billion)
Lucio Tan. Photo via Abs-Cbn News
Lucio Tan’s business interests are varied, although some of his more popular and bigger
ventures are Philippine Airlines, Asia Brewery, Philippine National Bank and Allied Bank,
and Eton Properties. Most of these are listed under the LT Group, Inc., a publicly listed holding
company founded by Tan. Its real estate arm, Eton Properties Philippines, Inc.,
specializes in high-end and middle-income high-rise and horizontal residential
developments, office projects, commercial centers, and mixed-use township
developments. It currently has 26 projects and has completed seven high-rise
condominiums, one mid-rise building, three residential subdivisions, two commercial centers,
one events venue, and three business process outsourcing hubs. The company also operates
real estate properties in Hong Kong and China.
8. Ramon Ang (Net Worth: $2.86 billion)
Ramon Ang. Photo via Esquire Philippines
The mechanical engineering graduate of Far Eastern University has become one of the
Philippines’ most prominent business titans. Ramon Ang gained control of San Miguel
Corporation, one of the country’s largest conglomerates, upon acquiring the shares of
Eduardo Cojuangco, Jr., the firm’s chairman.
San Miguel Properties, Inc. is the real estate arm of San Miguel Corporation and
specializes in community and subdivision development, as well as in premium serviced living
apartment through its Makati Diamond Residences.
9. George Ty (Net Worth: $2.75 billion)
George Ty. Photo via Philstar
The late George Ty, who passed away last year, founded Metropolitan Bank and Trust
Company, which is currently the second-largest bank in the Philippines in terms of assets and
capital. Ty’s GT Capital Holdings also has interests in the auto industry, power
generation, and insurance. Its real estate arm is Federal Land, Inc., which specializes in large-
scale property development projects, which include residential condominiums, office
buildings, retail and commercial centers, mixed-use townships, and master-planned
communities.
Federal Land’s subsidiaries include Horizon Land Property; Bonifacio Landmark Realty
Development Corporation (a developer of luxury hotels and residences such as the Grand Hyatt
Hotel and Grand Hyatt Manila Residences); and Omni Orient Management Corporation (the
company’s property management arm).
10. Andrew Tan (Net Worth: $2.6 billion)Andrew Tan. Photo via Entrepreneur
Philippines
The Filipino-Chinese businessman is the founder and chairman of Megaworld
Corporation, one of the biggest property conglomerates in the Philippines. Its flagship
developments include Eastwood City, McKinley West, and McKinley Hill, and Forbes Town
Center.
A Chinese immigrant who later moved to the Philippines and studied accounting at the
University of the East, Andrew Tan initially built his fortune on a liquor company that he started:
Emperador Distillers, Inc. Along with Emperador, Tan’s holding company, Alliance Global,
has interests in food and beverage (it owns the McDonald’s fast-food franchise), gaming, and real
estate.
Megaworld Corporation is Alliance Global’s real estate arm. It is engaged in the

development of large-scale, mixed-use townships. Megaworld’s subsidiaries include Empire
East and Suntrust Properties. Some of Megaworld’s landmark projects are Forbes Town Center
in Bonifacio Global City and McKinley Hill, a township project on a 50-hectare property in
Taguig.
Other Filipino billionaires who are known for their business ventures in real estate and
property development who have made it on the Forbes Magazine list include the family of the
late David Consunji, whose property firm—DMCI Holdings—has an array of projects across
the country, and Roberto Ongpin, a former trade secretary during the Marcos regime who
founded and runs Belle Corporation, whose projects include Tagaytay Highlands, Balesin
Island Club, and Alphaland Baguio Mountain Lodges.
For many of these wealthy Filipinos, investing in real estate and properties is a surefire way to
fuel their net worth.
Sources: Forbes, Entrepreneur Philippines, and Lamudi Philippines
An
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THE STATE, BANKS, AND DEVELOPMENT POLICY: FOCUS ON

THE ROLE OF GFIs IN SOCIAL HOUSING IN THE PHILIPPINES

A Proposed Dissertation Presented to

In Partial Fulfillment for the Requirements for the Degree

socioeconomic development particularly in social houses financing in such a

performance in terms of housing units produced by the National Shelter Program; 2)

encouraging the participation of private developers, and authorizing them as loan

political will and relative autonomy from an affluent or particularistic class to

effectively pursue its development goals.

I am really obsessed by studying the nature of the Philippine Patrimonial

Why was Philippine socioeconomic development particularly in social houses

financing in such a longstanding lag?

Mortgage Finance Corporation (HMFC) was milked to death as it was declared

oligarchs and particular classes that somehow disrupted socio-economic

development especially in the area of social housing financing. Among the

countries in the ASEAN (Association of Southeast Asian Nations), the

explore the reasons for this housing misery.

neighbors. It was only Japan that was more superior in socio-economic

stable as well as an unpoliticized military. What happened? The answer to this

this can easily be solved by a dose of authoritarian policies wherein the

When President Ferdinand Edralin Marcos declared Martial Law in 1972,

control of it by creating the National Sugar Trading Corporation (NASUTRA)

headed by his favorite crony Ambassador Roberto S. Benedicto which controlled

low-cost housing for them.

minimal price. Nevertheless, the promise of progress and economic development

treasury since it was “milked to death” by a dictator in a predatory state. As

development was limited to a large extent by weaknesses of political development.

administration and the Benigno Aquino, Jr. Administration improved economic

development after the scandalous Estrada administration which was short-lived

Duterte to appear in order to explain it but he refused.

economy was maintained minimally during his administration due to foundations

policy of the government to improve infrastructures and create employment.

countries around the world too.

I THE PROBLEM AND ITS BACKGROUND 19

1.1 Background of the Study 19-26

1.2 Theoretical/Conceptual Framework 27-31

1.3 Statement of the Problem 32

1.4 Significance of the Study 32-36

1.6 Scope and Limitations of the Study 36-37

1.7 Definition of Terms 37-38

II REVIEW OF RELATED LITERATURE 39

2.1 Introduction 39-40

2.2 Foreign Studies 40

2.4 State Theory and Institutional Economics Theory 54-55

2.5 New Growth Theory 55-56

2.6 Market Failures and the Role of Government 56-57

2.7 The Weberian State Theory 57-61

2.8 Weberian State and Financial Institutions 62-64

2.9 The Neo Marxist Theory 64

2.10 The State and Housing Finance 64-67

2.11 Local Studies 67-70

2.12 Government Financial Institutions 70-71

2.13 GSIS Housing Financial Institution 71-72

2.14 Philippine Social Housing and Housing Finance 71-74

2.15 Synthesis 74-79

3.3 Philosophical Stance 81-86

3.4 Data Gathering Activities and

3.5 Data Gathering Sources 87