Community Mortgage Program in the Philippines PDF

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This report discusses the impacts of the Community Mortgage Program in the Philippines....

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Community M Mortgage ortgage Program in the Philippines Report Outline and Contents Slide No. 1

Outline

Content/Transcript

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Introduction

Ohayou gouzaimasu sensei and to everyone in this room. I am Daniel from the Philippines. Today, I will talk about the Community Mortgage Program which is a topic that sensei assigned to one of the students from the Philippines to present in this course. Let me share a short background on how the Community Mortgage Program was initiated. The past decades have seen the Philippines experience a remarkable growth in its urban population, and notwithstanding the difficulties of living in overcrowded places, Filipinos continue to migrate to urban areas in search of better employment and income opportunities. Many urban poor households who are unable to afford the high price of land and housing have resorted to living in slum and squatter areas causing urban informality in such locations. A special survey of informal settler reported over 4.5 million informal settler families in the Philippines as of 2020.

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Pre-Outline Outline

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Rationale of CMP

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How CMP Works

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Maturity

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Impacts of CMP to Urban Development

The Philippine government recognizes this problem - that the basic human need for decent shelter was not met by millions of slum dwellers. For this reason, the Philippine government initiated some community-based housing programs to address the problem of housing and land tenure security among poor households. One of these programs is the Community Mortgage Program. It is the objective of this presentation to look into the rationale of CMP, its process, its impacts, and the issues on its implementation. To define, the Community Mortgage Program is an innovative low-cost home financing scheme that enables residents of blighted or depressed urban communities to acquire an undivided tract of land through community ownership by purchasing the land which they already occupy or by buying a parcel of vacant land through mortgage. Here is how the CMP works. 1. Beneficiaries organize themselves into a community association and the landowner and community associations then negotiate for the purchase of the site. 2. The community associations apply for CMP loan through the mobilizer who processes the community associations application and applies for program participation with the Social Housing Finance Corporation (SHFC). 3. Once approved, the SHFC issues a letter of guarantee to the landowner for the payment of the land. The landowner issues a Deed of Absolute Sale of the land to the Community Association and the SHFC releases payment of the land to the landowner. 4. The Community Association collects monthly amortizations and remits these to the SHFC. The CMP loan bears a 6% interest per annum and is payable over a maximum period of 25 years in equal monthly amortizations. Now how has the CMP impacted informal settler families so far? As what can be initially concluded, the CMP helped ease the burden of urban informality in the Philippines. Through CMP, many informal settler families constructed or improved their houses on their acquired lands on-site/off-site, thereby reducing urban informality.

As of 2020, more than 3,600 CMP projects were already taken out, helping over 300,000 informal settler families, with a total mortgage value of more than Php 15B.

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On-site Project

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Off-site Project

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Pre-issue

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Based on sensei’s lecture on slum upgrading and the concept of community empowerment, CMP projects could be classified into two: on-site and off-site CMP project. For on-site projects, lots currently occupied by Community Association members are purchased under the CMP. The member beneficiaries have the freedom to build or improve their houses within their lots. However, unlike the Kampung Improvement Project in Indonesia, the basic infrastructure and urban services like drainage and water service are not provided by the government. For off-site projects, the informal settler families are relocated to another site purchased under the CMP. Member beneficiaries also have the freedom to build their houses within their lots. However, basic infrastructure and urban services are still not provided by the government. It could be noted that for both types of CMP projects, communities have the freedom to build structures within their lots without prior approval on the building design and land use from the government.

NAPICO Project

Based on this, it can be concluded that there was no remarkable improvement in terms of urban development unless community members formulate a community development plan themselves. One example of CMP Project is the Ninoy Aquino Pilot Community Project.

Issues in CMP Implementation

From being a farmland, the NAPICO site has transformed into a developed urban settlement during the last two (2) decades It is now a large community of more than 4,000 households, bustling with various activities. The makeshift houses that used to dot the area has now been replaced with concrete and solid houses. In principle, the CMP is a perfect way to help informal settler families. But CMP is not devoid of issues during project implementation. ▪

First, there is no site feasibility assessment for housing settlement and unplanned nature of squatter settlements before project approval.

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Unlike the Ashrayan Project which was presented last week by Imran san about the Housing Program for Climate Displaced People in Bangladesh, the CMP only provides CAs with appropriate loans but does not enhance livelihood capacity and reduce poverty alleviation of beneficiaries.

CMP projects are approved without any road right-of-way and approved subdivision or municipality plans. The Community Mortgage Program increased housing ownership among households belonging to the lowest 30 percent income sector of society and to allow informal settlers gain land tenure security. ▪

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Conclusion

However, the CMP has addressed only one aspect of adequate shelter, i.e., lot acquisition. The expected transformation of CMP communities into safe and habitable communities does not apply to all CMP projects. Some implementation problems have plagued the program since its inception which could hinder its effectiveness in fulfilling its objectives. The government has been taking initiatives to deal with these issues, but they are yet to be fully addressed. On a final note, as the CMP is mainly a financing scheme providing appropriate loans to beneficiaries, community development does not apply to all communities under

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References

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Closing

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Joary

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Imran

CMP. As discussed by sensei, tenure regularization alone is not enough for poverty reduction and slum upgrading. Coupling tenure regularization with policies such as community development is essential for upgrading of slums and this is where CMP fell short other than ensuring lot acquisition to slum dwellers in the Philippines. If you want to know more about the Community Mortgage Program in the Philippines, you may read the following references. That is the end of my presentation on the Community Mortgage Program in the Philippines. Go seichō arigatōgozaimashita. Q&A What are the qualificatio qualifications ns to be C CMP MP beneficiaries and also wh what at are the requirements for lan land d to be acquire acquired? d? - The qualifications of CMP beneficiaries depend on the type of project, is it an on-site CMP project or is it an off-site CMP project. For on-site projects, SHFC requires that the community must have occupancy of at least 85 percent, and that at least 85 percent of those occupants must have been residing on the site for at least five years. For off-site projects, SHFC imposes a homogeneity requirement wherein at least 30 percent of the members must be informal or low-income inhabitants of the same city, and the group has been formally organized a year before by members that have common characteristics. The homogeneity of the CAs must be concretized in an LGU certificate, which shall be submitted to the SHFC. - In terms of the requirements of the land to be acquired, the land should not be classified as agricultural. The land should not be within environmentally constrained/hazardous or high-risk areas as certified by the Department of Environment and Natural Resources (DENR) and the concerned LGU. The land has a road right-of-way or an access road to a city, municipal, or barangay road. The landowner should have the legal capacity to sell or transfer the subject property for loan collateral under the CMP. Beneficiaries applying for on-site CMP loan in a blighted or hazardous area will not be approved for loans, unless they relocate to a lot of their own choosing which is safe to live or they agree with their relocation as recommended by the SHFC. NAPICO residents attribute the current improvements in their community to cooperation, group solidarity and good leadership. Former community officers tirelessly worked towards the acquisition of the NAPICO site and its development. The NAPICO site used to be a swampy area that is easily flooded. To remedy this problem, the site had to be land filled. Residents of NAPICO recall the many fund-raising activities (e.g. raffles/draws, charity dances) they undertook to come up with the money to pay for the truckloads of sand and gravel for the area. Residents of the area also observed that households in NAPICO began to improve on their dwelling units when they acquired their lot through the CMP....