Beaten to the punch

A controversy over property rights has captivated Philippine news media with the drama that unfolded earlier this month in Davao on the southern island of Mindanao. The city suffered from flooding that in particular affected people living in informal settlements. In an untimely intervention on July 1, as the city was struggling with the impact of the flood, the police went ahead with executing a demolition court order that would forcibly resettle around 300 families living in the 3,143 square meter shantytown. Enraged inhabitants resisted and Davao mayor Sara Duterte Carpio requested a two-hour stay in the demolition because an appeal against it was underway. When a court sheriff Abe Andres refused to stop, Ms. Duterte repeatedly hit him in the face becoming an unlikely hero of the poor. The incident was caught on tape and quickly became an online sensation.

The mayor maintains that the mandatory provisions governing demolition policies were not followed and the sheriff has not yet filed a formal complaint against her so the legal outcome of the scuffle remains to be determined. But there is a broader significance to the problem that this case highlighted: the pervasiveness of informal property in the Philippines. People who live on untitled plots, or who squat on privately owned land, face resettlements and thus have little incentive and ability to invest in the land they live on.

RA 7279, or Urban Development and Housing Act of 1992, and the so-called Lina Law outline the bases for community consultation as well as the steps and rules of relocation. Yet, the laws fail to address the root causes of informal settlements and – while in theory are meant to protect the settlers – in practice they create “professional” squatters. At the same time, the practice of illegal settlements undermines legal property ownership, leading to confrontations such as the one in Davao.

As a part of the international property markets scorecard project, CIPE and the Institute for Solidarity in Asia (ISA), discussed this and other problems affecting urban property markets in the Philippines during July 12 expert roundtable held in Manila. Participants included banking, real estate, and SME experts as well as policymakers and representatives of relevant government agencies. The discussion was based on the international property markets scorecard approach and focused on challenges faced by small businesses in urban commercial markets and opportunities for reform. The challenge for the country is to look beyond the punching incident and think more broadly and systematically about property markets reform that would empower the poor, many of whom are SME owners, to gain secure land ownership to end the vicious cycle of demolitions and resettlements with no better job or life prospects.

Sara Duterte Carpio is now dubbed “The Puncher.” But reforming property markets requires more than punching your way through problems. Reforms need a systematic approach that examines which elements of those markets are not functioning well and how they can be improved.

The Philippines is one of the four countries where CIPE is working on this project with local partners, along with Armenia, Kenya, and China (roundtable upcoming).