Pinoy Kasi -- Even the dogs know (July 3, 2001)

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*My articles on housing ("Even the Dogs Know" and "Home is Where the Heart Is")referred to Hernando De Soto's "The Mystery of Capital". Apparently, the President has read the book as well and is now using it for her housing plans. I saw copies of the book at Page One in the Rockwell center. If they've sold out, place an order with one of our bookstores. The publisher is Basic Books (New York).

3 July 2001

Even the dogs know

M. L. Tan

"Bounded on the N., points 3 to 4 by Lot 2, Block 5, on the E., points 1 to 2 by Lot 6, Block 5. . ." The description goes on and on, defining the boundaries of a piece of land that a ninong passed on to me many years ago. I’ve paid the taxes on it each year at the Caloocan city hall but I’ve never seen the property itself for the simple reason that no one can find it, not even people from the city hall. I suspect that if I ever find that piece of property, it would have been taken over by squatters, or that it has been sold to someone else in a fraudulent deal.

The problem isn’t just with land titles. An American friend bought a condominium several years back, or thought he bought one. It was a scam and the case is still in the courts.

I thought of all these problems as I read a book, "The Mystery of Capital" by Hernando De Soto, which included case studies conducted in Egypt, Mexico, Haiti and the Philippines. De Soto’s thesis is simple: western countries developed capitalism around property rights. When people are able to acquire their own land and homes, and a legal system is in place to recognize and safeguard that ownership, then property can be used as collateral to borrow money from banks and to invest this in businesses. All that becomes a major force for capital to grow.

In countries like the Philippines, only large landowners are assured of their property rights. Everyone else is left hanging. The poor can’t afford to buy land or a home in the first place so they end up squatting. The middle class is only a bit more fortunate, paying exorbitant prices for substandard housing. But rich or poor, everyone is so very vulnerable to anomalies and frauds when it comes to land titles and home ownership documents.

De Soto writes extensively about the phenomenon of squatting, common to many Third World countries. But he points out that even in the United States, there were squatters up to the 19^th century. What the government did was to find ways of helping the squatters to legalize their land ownership.

That’s different from our urban politicians’ squatter coddling. Our politicians curry votes from the slums through a patronage system, offering "protection" for squatter communities but without ever resolving the question of ownership. But then politicians aren’t interested in giving the squatters their own land and homes – what they want is to keep the squatters in limbo, without titles, so that they will be perpetually dependent.

De Soto’s researchers found that in the Philippines, someone who has been squatting on public or private land, could try to purchase the land. But the squatter would need to form an association with other illegal occupants and to apply from a state housing finance program for funding support. The process entails 168 bureaucratic steps and dealings with 53 public and private agencies, all of which could consume 13 to 25 years. If the land in question is considered "agricultural", it would have to be reclassified as "land for urban use". That involves another 45 bureaucratic procedures that will take two more years.

Without connections, the squatters’ applications languish, and with so many steps and agencies involved, the chances for graft and corruption shoot up without any guarantees that the applicants will ever complete the process. The system just does not encourage legal home ownership.

It’s encouraging to hear housing "czar" Michael Defensor announcing reforms in this area, including a reduction of bureaucratic hurdles for housing projects. In May, president Macapagal signed executive orders reclassifying more than 2000 hectares of government land in Manila into housing sites, opening the way for squatters who have been there the last 40 or 50 years to legalize their land occupancy.

Instead of focusing on the First Couple’s one-shot dole-out activities, the media should feature initiatives with long-term effects, such as the reforms in housing. With some 3 million Filipino families not owning their homes, the Macapagal administration has an opportunity to make a lasting difference. Land and homes are passed on to the next generation, so politicians who help make this ownership a reality will be remembered for many years.

To go back to my main point, a sound housing project starts with cleaning up our legal infrastructure for land and homes. Unless we do this, we will see a lot more disputes and court litigation. De Soto offers this advice: listen to the barking dogs. He notes that even in the most congested slums, you can tell from the dogs’ barking where a household begins and ends. At least the dogs have it all figured out. Maybe, my friends suggest, my ninong’s property is actually in Quezon City.