Managing Post-Colonial City Crisis & the Crisis of Management, Interventions From Above: State & the World Bank, 1946-1986

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Chapter 5

Managing the Post-Colonial CityCrisis & the Crisis of Management

Interventions From Above:State & the World Bank, 1946-1986

State versus Squatters: Shelter Symbolism and“Tactical Redeployment,” 1946-1972

Juvenile state shelter and service delivery and realty development in the

metropolis at the outset of Independence, emerged in the context of both

ascending social and market demand for urban housing following in the

wake of rapid postwar urbanisation. While the dramatic proliferation of

slum and squatter colonies and the economic embolisms associated with

them drew urban management into modicum efforts at socialised housing,

the crucial impetus to early shelter delivery programs was provided by an

increasingly profitable market for housing demanded by bourgeoning

bureaucratic middle class.

In general, while the bulk of shelter stock generated by the

early programs tilted to towards the latter, urban managers marshalled

the problems of squatting and urban conurbation through arbitrary and

coercive “redeployment” campaigns involving the summary eviction-



relocation and resettlement of whole squatter communities to far and

often undeveloped suburban sites.

At the threshold of Independence, thousands of displaced

families from war-ravaged areas migrated to the metropolis in 1945,

settling on vacant and idle public and private lands with little or no regard

to land ownership. With an estimated population of over 20,000 in 1946,

mainly confined to the old colonial Intramuros and Tondo districts,

squatter and slum settlements soon parachuted all over the city - along

railroad tracks, estuaries and swamplands. In the wake of the postwar

industrial boom, a steady stream of rural migrants propped up the

squatter population from 96,000 in the mid-50s to an alarming 283,000 by

the early 60s.i In the face of such an explosive trend, the need for

socialised planning became compelling indeed.

In its earliest version, official postwar shelter policies

resurrected the three-pronged thrust of previous colonial programs on

slum clearance, relocation and housing and subdivision development.

Urban public land and housing programs navigated mainly along lines

charted by the reactivated prewar People’s Homesite Corporation (PHC)

and the National Housing Commission (NHC), which provided neither

direct state shelter investments nor low income housing.ii

Rectification of the latter and the rationalisation of inter-agency

coordination led to the fusion of these two agencies in 1947 into the

Philippine Homesite and Housing Corporation (PHHC). PHHC departed

from its predecessors by rhetorically incorporating socialised housing and

direct investments in its agenda of priorities while sharing slum clearance



and relocation functions with other agencies involved in social welfare and

service delivery. It also signalled and stimulated the emergence of an

inchoate web of public and private credit facilities to prime up the market

for low cost housing in the 50s.

Thus, six years after its creation in 1950 by virtue of Republic

Act 580, the Home Financing Commission (HFC), patterned after the US

Federal Housing Administration, instituted a mortgage insurance program

to induce banks and financial institutions to grant housing loans on liberal

credit terms and mobilised investments in housing by reducing risks on

loans with longer periods of maturity. Following suit, the Government

Service and Insurance System (GSIS) and the Social Security System

(SSS), respective insurance programs for state and private employees,

started to extend inter-agency loans to bankroll PHHC housing projects in

the mid and latter 50s. Similarly, the Development Bank of the Philippines

(DBP) unveiled a small loans program for low income borrowers in 1960.iii

Following congressional ratification of the Tenement Law

(Republic Act 3469), low income high rise tenement construction was

revitalised in the 60s. The NHC was created to supervise production of

prefabricated dwelling units for low and middle income groups and to help

coordinate expanding state housing commitments.iv

Screened by the Ministry of Social Welfare and Development, eligible

clients were allocated dwelling units via lottery overseen by the PHHC. In

quantitative terms, however, public shelter provision hardly made a dent

in plugging the widening gap between supply and demand for urban

housing.



Hence, while the combined achievement of conventional

housing programs (PHHC, GSIS, SSS and DBP) stood at a mediocre

135,114 units nationwide between 1948 to 1975,v in Metro-Manila alone

the squatter population jumped by 56 times to 1.3 million during that

interval. Qualitatively, in-built biasses in the allocation of low cost housing

and credit tended to operate against low income clients and eventually

transformed PHHC sponsored housing projects into middle-class havens.vi

Although loan terms were extremely attractive (6% interest, 25

years to pay and up to 90% financing), self-imposed constraints resulted

in their typical product reaching only the top 12% of subscribing

membership (e.g. in the case of GSIS and SSS).vii While rentals and

amortisation rates were considerably lower than in the open market, they

were beyond the means of the poor because they were based on cost

rather than family income, leading gradually to their expulsion from state

housing projects in favour of the more solvent middle-class clientele

(clerks, civil servants, professionals, military and police personnel).viii

In the USAID-funded Project 5 in Metro-Manila, for instance, one

of the nine low income housing projects under PHHC auspices - apart from

huge turnover rates due to tenants defaulting on payments - many of the

original apartments had gone at the outset to government employees by

order of the mayor of Manila.

Public housing in the Philippines had been treated and financed

like private housing and operated as such. Token state subsidisation of

public housing had been endorsed by the fact that no additional

congressional funds over and above its original capital were granted to



the central housing agency, PHHC. High building standards and the

capital-intensive nature of tenement housing invariably translated into

relatively high production costs per unit; thus exerting affordability

constraints on poor households.ix Practical biasses inherent in the type of

shelter delivery adrift in the Philippines seem to stem from the then

prevailing modernisation ideology informing urban management:x

“... which sought to make the urban poor adapt to modern urban

lifestyles, and fostered Western oriented aesthetic norms

through tenement living. The net effect was that social housing

programs failed to reflect the preferences, needs and paying

capacities of the poor.”

In the face of unabated squatting and the impotence of symbolic state

shelter delivery in the 50s and 60s, massive tactical decongesting

campaigns via slum clearance, relocation and resettlement form the

actual hard core of urban crisis management. This administrative praxis

began to take shape during noted period, when city authorities relocated

some 7,000 squatter families to various sites in the metropolitan

periphery.xi

Legally, squatter evictions were facilitated by court injunctions

arising from either suits filed by private landowners or the prerogative

vested upon the mayor by the city charter for purposes abating “public

nuisances.” The early squatter redeployment drives were marked by the

red thread of inadequate site provisions and employment opportunities

coupled with scarce and inaccessible community facilities forcing many

relocatees to migrate back to the city. Moreover, while some resettled



tenants were even barred from the right to purchase the lots they

occupied, majority of them (75% of the squatters surveyed in the 50s)

were found financially ineligible or unable to keep up with payments when

they had the right to buy. Inevitably, payment delinquencies led to the

foreclosure of hundreds of sales contracts.xii

Whereas previous evictions took place on a piecemeal basis,

affecting a relatively small number of people, the city government began

large scale evictions in 1963. This was a precipitate action which

inadvertently botched preliminary state plans to correct early mistakes

through integrated services and industrial development in Sapang Palay, a

pilot relocation area 40 kilometres north of Manila.

Between December 1963 and March 1964, almost 15,000

squatter families in the capital lost their homes as a result of massive

demolition operations within the walls of Intramuros, Tondo and the North

Harbor areas. Squatter shanties were summarily burned down, allegedly

to give way for the restoration of the ancient Spanish walls and the

transformation of Intramuros into a cultural centre. Consequently, 4,500

of them were relocated to Sapang Palay before the proposed state

development plan could take off the ground. Unfortunately, virtually no

preparations had been made to absorb the sudden influx of such a vast

number of people who found themselves literally being dumped at a 754

hectare hilly, infertile government estate without the benefit of shelter,

public services and employment.

Additional resettlement sites were opened in San Pedro (1963),

in Carmona (1968) and Dasmarinas, Cavite (1974, 28 km southwest of



Manila) in a way that recapitulated the nostalgic maladies in Sapang Palay

and other earlier sites (with the exception of Dasmarinas in subsequent

phases of relocation).xiii

Indicting the viability of eviction, relocation and resettlement as

a corrective strategy to urban congestion and conurbation, an

authoritative study on the subject listed a host of counterproductive

effects. It argued that while demolitions “did not spare the complex

informal sector economy that has emerged in those low income

residential quarters (existing employment opportunities within the cleared

areas were destroyed as well), out-city resettlement engenders the

multiplication of costs in all sectors of life” (e.g. the absence of alternative

employment, concentration of job opportunities in the capital implying

high transport costs, the longer chain of middlemen and additional

transportation costs inflate household expenses for food and other

commodities, etc.). As such, the process of “de-resettlement” is

particularly intensive in the initial stages of relocation.

In Sapang Palay, 60% of relocatees left between 1960-1969,

while 45% between 1968-1972 abandoned the Carmona resettlement site.

Those who left sold their claims on lots to speculators or lower middle

class outsiders. Essentially, relocation did not significantly contribute in

the dispersal of urban growth. On the contrary, (given the high re-

migration rate) through backfilling, these standard urban satellites tended

to further reinforce the trend towards conurbation and

metropolitanisation.xiv



Polity, Culture, Ideology, Power and Community

Urban management and managers certainly do no operate in a political

vacuum, and therefore can’t be meaningfully understood in isolation from

polity and political culture and their general and specific complexion. In

this context, the flux and tone of urban policies and management

strategies and “technologies” are inextricably tied to the conjunctural

shifts in mainstream polities and states of Third World societies. In the

Philippines, this relation is graphically illustrated by the strategic re-

upholstering of city management following in train with the institution in

1972 of autocratic rule by Ferdinand Marcos, and later with the re-

institution of the liberal democratic yet elite-dominated democratic state

power under Corazon Aquino in 1986.

Within the framework of constitutional democracy patterned

after the US model, the political system from 1946-1972 operated in a

relatively decentralised climate. Factions of the landed oligarchy

alternated in power through electoral contests, where citizens were

mobilised through traditional patron-client relationships, and political

organisations along horizontal or class lines were still embryonic. The

unwritten rule of “elite constitutionalism” dictated that each elite faction

would get its chance to control the government machinery and dole out

the spoils of victory to its followers.xv

Urban and rural delivery systems of collective goods and

services had often served as traditional conduits for patronage politics, as

one author, studying metropolitan politics, observed:xvi



“Jurisdictional conflicts over the responsibility for the delivery of

services among local units and between the municipalities and

the provincial governments, as well as the national government,

often immobilised local bureaucracies. The preoccupation of

MMA (Metropolitan Manila Area) local officials with electoral

contests influenced decisions on priority programs and services

which local government should undertake. In general, local

government tended to undertake services with potentially

greater political impact, which would promote good public

relations and result in more voted at election time.”

A study, for example, of Manila city ordinances involving public works

projects in 1963 (an election year) revealed the partisan nature of these

policies. Of some 44 ordinances enacted from January to November 1963

authorising the construction, repair of roads and bridges and acquisition of

private lands for right of way and private buildings, more than half (24)

were confined to the first district, the incumbent mayor’s bailiwick.xvii

The clientist character of urban politics may also account for the

ambiguity of city policies towards squatters and slum dwellers who form a

large potential market for political support. It also explains why despite

occasional spates of evictions and relocations, squatting as a growing

phenomenon was relatively tolerated in the pre-autocratic era, i.e. before

martial law disbanded traditional structures of electoral competition.

In fact, in the course of power base building, “the practice of

literally herding squatters into selected areas to guarantee bloc voting by

petty politicians and caciques,” virtually created new slum and squatter



colonies in the city!xviii On the other hand, squatters and slum dwellers as

well as community organisations who had banded themselves into unified

voting blocs tended to maximise manoeuverability afforded by the

electoral process by waging their bets on candidates best equipped to

deliver an array of otherwise scarce social dividends to their localities

(security of land tenure, services, etc.).xix

Linkages between traditional elite political machineries and

local organisations and constituencies vertically integrated the

communities to mainstream city, provincial and national polities.

Pragmatic advantages conjured by patronage politics in the form of

symbolic resource allocation in exchange for political allegiance tended to

deflect popular resentment away from more strategic, albeit more risky,

class-based forms of political mobilisation, thereby by and large

reinforcing the status quo.

However, by the end of the 60s elite democracy began to burst

at the seams as a result of two parallel developments. The rapid

degeneration of elite competition into violent vendettas between huge

private armies of the oligarchical “warlords” was triggered off by Marcos’

reelection to the presidency in 1969, one of the most corrupt and violent

elections in Philippine postwar history. And more importantly, the growing

success of the Filipino middle and lower classes in utilising constitutionally

guaranteed freedoms to articulate popular demands.



As the upper classes were tied down in internecine strife over

political office and over the response to US economic domination (see

Chapter One, p 19?), thousands of youths, workers and peasants burst out

from the straightjacket of patronage politics to rock the country with anti-

elite and anti-US demonstrations, strikes and marches. With class and

nationalist consciousness taking hold, the capacity of the elite-dominated

democratic system to co-opt, fragment and defuse mass demands

through patronage began to break down.xx

Following the usurpation of state power by Marcos in 1972, a

military-technocratic government was installed, traditional institutions of

elite democracy dismantled, dissident segments of the ruling and popular

classes ruthlessly suppressed, and the economy harmonised with the

requirements of transnational capital and WB-IMF sanctioned reforms. The

political arrangement signified by the authoritarian state was a

schizophrenic mix between, on the one hand, a modernising westernised

technocracy and the elevation caciquismo and patronage to its highest

conceivable form.xxi

Strategic changes in metropolitan management and city

politics dovetailed well with this dramatic shift in political power and

ideological orientation following the twin logic of modernisation-

caciquismo which in 1975 would culminate in the political and

administrative centralisation of the National Capital Region’s 17 separate

cities and municipalities when a presidential decree (PD 824) ordered the

integration of 17 local governments under the Metropolitan Manila

Commission (MMC).xxii



Administrative rationalisation and infrastructural modernisation

were part and parcel of the Marcos regime’s grand ambitions to convert

the city into the Mecca of transnational corporate investments and

tourism. On another level, it was a logical step in the process of regional

power centralisation.

World Bank technocrats were among the most energetic and

very actively lobbied for the drive towards state orchestrated strategic

reorganisation of city management. Ecstatic over the final creation of the

MMC, the World Bank quickly committed itself to assist the metropolitan

government with “technical assistance and financing to tackle questions of

organisation and management, fiscal policy, programming and

budgeting.” The MMC was a super-body envisioned by the Bank to

“establish strategic policy and coordinate infrastructure planning for the

area and supervise the administration of local services.”xxiii

At the same

time, consolidation of cacique power synonymous to this process

corresponded with the centralisation and institutionalisation of the formal

and quasi-formal instruments of coercive power:xxiv

“Moves to centralise metropolitan police services were started in

the late 60s with the assistance of the USAID Public Safety

program ... Local mayors were instrumental in forging the

network of baranggay, ward leaders who acted as the ‘grassroots

eyes and ears’ of the regime. Police services were formally

integrated in March 1974, under the control and supervision of

the Philippine Constabulary ... While its objective was

technocratic centralisation, in actuality, the Bank promoted



greater personal concentration of power in Marcos’ hands ...

Marcos appointed his wife Imelda as governor of the area ... all

local officials in the area were to be appointed by Marcos, and

the power to levy and collect revenues were transferred from

local governments to the Commission.”

As we shall see later in the succeeding section, the duality of urban

management strategies appears to have been inspired by the constraints

imposed by the unholy wedding between cacique and technocratic

ideologies plus the ambivalent programs executed to address the squatter

problem. By the time the liberal democratic Corazon Aquino assumed

political power in 1986, Marcos’ institutional brainchildren were already so

solidly in place after nearly two decades of dictatorship that to have

dismembered them would have destabilised the new, still fragile

dispensation.

Aquino’s position towards the city poor and squatters was

infected by a similar ambivalence: retention of the most repressive

features of urban management alongside democratisation and the

controlled institutionalisation of “people’s power,” the latter

demonstrating the growing sophistication and strength of urban collective

movements. The ramifications of this ambivalence will be the subject of

elaboration further on.

State and World Bank versus Squatters: StrategicDualities, Slum Upgrading & Bulldozer-andUproot Politics,1976-1986



Reaching breaking point proportions by the early 70s, unmitigated

squatting, then estimated at 1/3 of total metropolitan population, invited

serious attention from official quarters and strategic remedial inputs

generally forking out in two analogous directions. The cutting edge of

initial state squatter policy was an enlarged looking glass of the previous

thrust provided by controversial growth centre strategies: Relocation and

resettlement coated with a semblance of socialised but de facto middle

class oriented shelter delivery.

Viewed through the cognitive lense of the authoritarian state,

squatters were simply technical obstacles standing in the way of

ostentatious official plans to beautify and modernise metropolitan

topography. Symbolising this vulgar view was city governess, Imelda

Marcos’ grand vision of turning Manila into the “City of Man,” a “modern”

city complete with financial centre, an area for hotels and restaurants, an

embassy enclave, high class restaurant areas and other appurtenances of

luxury living, Florida style.xxv

The zeal with which the Marcoses mobilised the coercive

powers of the autocratic state in the strategic attempt to physically

obliterate the squatting problem was legendary. Adding teeth to the

eviction-relocation protocol, Marcos issued a score of edicts and

memoranda facilitating and legitimising eviction and relocation campaigns

to an extent never before possible. Delivering the opening salvo in 1972,

the president directed (Letter of Instruction, LOI 19) the secretaries of

National Defence, Public Works and Highways, Social Welfare and other



heads of government agencies to remove all illegal construction along

estuaries, river banks, railroad tracks, buildings erected without permit

and to allocate or assist in the relocation of squatters and other displaced

or evicted families.

This was followed by a series of procedural instructions and

decrees (LOI 19A in 1972 & PD 296 in 1973, see Table on Laws and

Decrees), and decisively climaxed in 1975 when Marcos introduced the

notorious “Anti-Squatting Law” (PD 772) criminalizing squatting and

penalising offenders with “imprisonment ranging from 6 months to one

year or a fine of no less than 1,000 pesos or no more than 5,000 pesos”

with subsidiary imprisonment in case of insolvency.xxvi

These ferocious laws caused public uproar since it practically

gave private owners and city authorities in blanco power to carry out

arbitrary evictions and forced relocations. Indeed, statistics lend credence

to these fears. Of the 46,186 relocated families between 1963-1980 from

the metropolis to government resettlement sites, at least 27,486 or almost

60% had been resettled after the imposition of Martial Law in 1972. For

the whole country, the now defunct Presidential Assistant on Housing and

Squatter Relocation Agency (PAHRA) disclosed that some 400,000 urban

families had been evicted or resettled between 1973-1980, i.e.

approximately 18% of the total urban population.xxvii

In the name of “beautification,” coercive anti-squatting

legislation sanctioned Imelda Marcos’ frantic and massive efforts to

fumigate if you like city landscape from squatters or what she pejoratively

referred to as blistering “eye sores,” employing the more preferred



bulldozer-uproot strategy. Notable cases occurred, for example, during the

hosting of the Miss Universe pageant in 1974 when squatter shanties,

housing an estimated 100,000 people along the parade route, were

demolished on a wholesale basis. In much the same way, 10,000 were

ejected and relocated before the visit of US president Gerald Ford in 1975.

A year after, 65,000 squatters were shuttled away as a result of a city-

wide beautification campaign on behalf of the delegates to the 1976 IMF-

WB conference in Manila.xxviii

Tragically, the elan of these huge eviction campaigns rhymed ill

with the capacity of extant relocation areas to accommodate the sheer

number of relocatees involved. And since tantamount upgrading of

resettlement sites was forgone, this strategy repeatedly ended in fiasco

and at best regenerated the vicious cycle of “de-settlement” alluded

earlier on. Failure of the relocation strategy provoked the periodic official

threat of the “Return to the Province Program,” designed to prevent rural

families from migrating to Manila by providing current city residents with

identity cards to distinguish them from those officially regarded as

intruders. An attempt vehemently challenged and foiled by budding

squatter belligerence triggered off by the unpopular relocation

programs.xxix

Elsewhere, state and World Bank technocrats were transmitting

new impulses in the form of alternative strategies in Third World shelter

and urban development. Alarmed by exponential urban growth, poverty

and the blunders of erstwhile growth development strategies, international

organisations like the World Bank and the United Nations joined the reform



debate on slum improvement and urban development. As a facet of a new

basic needs development strategy, the World Bank and other international

development institutions propagated low cost housing projects designed

to rely on the self-help inputs of target beneficiaries, thereby adopting, if

only rhetorically, Turner’s concept of “housing as a process.”xxx

Known in official parlance as “sites and services” and “slum

upgrading,” this new brand of low-cost housing programs was soon

adopted by many governments in the Third World. Indonesia and the

Philippines were among the first countries in Southeast Asia to experiment

along these coordinates.

Slum upgrading in situ and sites and services formed the avant-

garde of technocratic management technologies counterposed by the

World Bank to the more mundane palliatives of slum relocation and

expensive shelter delivery still regnant in the Philippines. Slum upgrading

as a novel approach to mass housing consisted of “re-blocking,” or the

rearrangement of the typically irregular blueprint of slum settlements by

moving the dwellings along a rectangular layout, hand in glove with the

provision of basic infrastructure, access to water and electricity, then

renting or selling the sites at affordable costs to beneficiaries. Re-blocking,

however, often entails the relocation of an overspill affected by the de-

congesting measures.

Sites and services projects usually serve a two-fold function

viz., to accommodate the overspill population of upgrading programs and

to increase the housing stock at low costs.xxxi This virgin strategy - at the

forefront of the Manila Urban Development Program, MUDP I - was to be



tested by the World Bank at the proverbial Tondo Foreshoreland Area

(TFA), the single largest agglomeration of slum and squatter dwellers in

the Philippines.

Testing Technocratic Technology in Tondo (MUDP)

Being the freak case of city congestion and conurbation, TFA logically

qualified as central testing ground for trend-setting in situ upgrading-cum-

sites and services programs introduced by the World Bank in the early

70s. The TFA test-case heralded the elevation of this strategy to national

and city-wide shelter policy with the launching of the Slum Improvement

and Resettlement (SIR) program and the Zonal Improvement Program

(ZIP) during the latter half of that decade.

More significantly, the TFA example, being the traditional

epicentre of squatter dissidence and enjoying a long and complicated

history of community organisations, eloquently portrays the thug of war

dialectics between management and grassroots counter-management

that dynamized the evolution of urban policies.

The TFA is a 180 hectare land strip reclaimed from the Manila

Bay in the early 1940s and was intended for industrial development and a

port complex for inter-island shipping. After World War II, the land lying in

fallow and largely undeveloped was quickly settled by squatters. Between

1968-1973, the squatter population dramatically leaped from 44,000-

180,000 (or 27,500 families).xxxii

In step with the modernisation thrust in the early 70s, a giant

urban renewal and development plan along the TFA was announced by the



government, entailing the expansion of the old Fisheries Port and the

construction of an international port with a network of circumferential

roads embracing the whole Metro-Manila and ten radial superhighways

terminating in export processing zones all over Northern Luzon to the

Southern Tagalog region.xxxiii

With the spectre of relocation - then the lodestar of official

urban policy - looming, brewing squatter resistance in the early 70s,

denounced the plans and official indifference to long-standing claims for

land tenure rights. At the vanguard of the urban poor movement stood

ZOTO, a federation of 113 local organisations from 8 adjacent shantytown

areas in Southern TFA. By mid-decade, the prairie fire of squatter

opposition -a response to the common threat posed by arbitrary

government actions - spread to other squatter areas in the city, coalescing

later into the ZOTO-Ugnayan, a city-wide confederacy of militant

community organisations.

Meanwhile, negotiations around urban development projects for

Bank financing were afoot in 1973-76 between the government and select

teams of World Bank technocrats. Bilateral deliberations were marked by

discrepant views on strategy. Against the traditional official predisposition

to hitherto unsuccessful out-city relocation, resettlement and expensive

showcase housing alternatives, Bank officials strongly endorsed slum

upgrading in situ and sites and services as vanguard approach in the

rehabilitation of Tondo. The Tondo-project was a substantial component of

the city-wide $65.7 million MUDP, half of which was to be funded by the

Bank.xxxiv



On the surface everything about the new development recipe

appeared to be innovative enough. After all, slum upgrading meant to

integrate for the very first time upgrading of substandard shelter, basic

services delivery with income generating programs. It promoted sound

principles like those of “maximum retention of structures, minimum

displacement of families, maximum community participation in planning

and implementation, integrated physical and socio-economic

development, and affordability of target beneficiaries.”xxxv Beyond

appearances though, the program’s purportedly innovative features were

by no means all that original. Bank propaganda skirted the fact it had:xxxvi

“... pirated the approach from ZOTO-Ugnayan, which had drawn

up a similar alternative to the government relocation plans in the

early 70s. As formulated by the people of Tondo, slum upgrading

was a more humanitarian approach than relocation. As

reformulated by the World Bank, however, humanitarian rhetoric

coexisted with hard capitalist economics ... On the one hand, the

Bank claimed that slum upgrading projects were directed at

“very poor people,” on the other hand, they were economically

predicated on ‘recovery of full costs from their beneficiaries’. ..

This was a major contradiction but it was something that the

Bank confidently ignored in the mid-70s as it sought to persuade

the Marcos regime to adopt slum upgrading as its general

approach to mass housing.”

Although the Bank’s prescription finally prevailed, schisms between

proponents of the technocratic and traditional approaches lingered



nevertheless and precipitated a division in the government’s housing

programs. While the Bank virtually “fathered” the National Housing

Authority (NHA), created by Marcos under considerable Bank pressure in

1975 to absorb the functions of the PHHC, merge pre-existing government

hosing agencies and supervise slum upgrading efforts, city governess and

First Lady Imelda Marcos eventually erected her own “fiefdom,” the

Ministry of Human Settlements (MHS) three years later to carry out

showcase middle class biassed housing projects. Obviously, this division

added fodder to administrative confusion in the housing sector.xxxvii

To a certain extent, the conflict played into the hands of the

Tondo squatters and gave them greater manoeuverability in bargaining

and lobbying attempts with Bank and state officials aimed at harmonising

the slum upgrading program more closely with grassroots demands and

community interests. However, when the Tondo project was ultimately

operationalised, the difference between sophisticated technocratic

strategies and traditional norms proved to be deceptive, a petty deviation

in from but not in substance as far as the squatters were concerned.

Managers and counter-management grassroots organisations

were particularly at loggerheads over three key issues - relocation,

affodability and security of land tenure, and grassroots participation -

which were in fact among the presumed pillars of slum upgrading.

Relocation

Reblocking of the TF to give room for the planned expansion of the

international and fisheries port complex required the relocation of 4,500



squatter families, half or 2,000 of which were to be accommodated in the

adjoining 40 hectare land-fill of Dagat-Dagatan (DD), to be developed by

the NHA as the country’s very first sites and services area programmed for

infrastructure development. The remaining 2,500 (1980) estimates, or

those who settled in the TF after the project began in 1976 were destined

for out-city relocation to the distant Dasmarinas resettlement site. Despite

the fact that more than 27,000 families were to be spared from relocation

and were to supposedly benefit from upgrading and access to newly

installed basic services and amenities, the decongesting component jibed

ill with the “absolute minimum relocation” principle proudly peddled at the

outset by Bank technocrats.xxxviii

Affordability and the Land Tenure Issue

The issue of de jure landownership has been a source of festering

frustration among Tondo residents since the 50s. Pre-martial law

governments had in fact already legally acknowledged their claims on

landownership through the passage of Republic Act 1579 in 1956. The Act

provided for the sale and subdivision of a part of TF land to lessees at a

price not exceeding 5 pesos per sq m without down payment for a 15 year

period. Subsequently, the scope of this law was to be either enlarged or

reduced by a labyrinth of controversial amendments, ending in protracted

deadlock that left the TF land issue basically unresolved.xxxix

Upon the behest of a World Bank mission to rectify past conflicting

legislation and regularise tenure in order to iron out project

implementation, Marcos issued a decree in 1975 (PD 814) defining the



land tenure arrangement in the TF and DD project areas. In contrast to the

grassroots demand for immediate freehold rights, the decree prescribed

leasehold with or without option to purchase, igniting once again popular

resentment among TF occupants. Consequently, Marcos revoked the latter

and all previous legislation through Presidential Decree (PD) 1314 in 1978.

Again reneging on popular demand, this decree required the residents to

lease their sites from the NHA at 5 pesos per sq m with additional cost of

services or development costs at =.95 pesos per sq m to be amortised

within 25 years at 12% yearly interest. Those who wished to buy their lots

could do so only after 5 years of leasehold, when the sites would be sold at

their market value at the time of purchase.xl

In effect, the decree served as incontrovertible legitimation of Bank

and technocratic emphasis on the left-hand side of the cost-benefit scale,

i.e. self-liquidating and free market dynamized rather than subsidised slum

upgrading programs. ZOTO categorically disavowed the arbitrary repeal of

previous laws and contended that the proposed rental rates were way

beyond the affordability of the poor. The West German government

mission exploring the possibility of bilateral aid to the project in 1979

arrived at similar critical conclusions, sinking Bank and state claims that

rental rates were affordable to 3/4 of TF households:xli

“Looking at the data available on income distribution (in

Tondo) ... only 30-40% of the squatter households can afford to

pay regularly the rents foreseen under PD 1314; this means that

60-70% cannot pay the rentals.”



Moreover, PD 1314 condemned any delinquent tenant in arrears of three

months rent to outright eviction, an onerous imposition given, according to

the West German report, that 2/3s of the Tondo residents have highly

irregular employment and will as such formidably be constrained in

regularly paying required monthly rents.xlii This early disclaimer would later

be verified when Marcos, in an apparent act of self-admission, passed PD

1923 in 1984 declaring pardon on the surcharge imposed on overdue

accounts of beneficiaries in NHA project areas as a result of insolvency.xliii

Equally repudiated by ZOTO was the Kapitbahayan (Neighbourhood)

- a multi-family model housing pet project of Imelda Marcos in the

adjoining DD area inaugurated in 1976 - the rental rates of which were

beyond the league of low income residents. Whereas squatters could

afford about 35 pesos, average monthly rental figures ranged between

70-100 pesos. Visiting Australian architects critically argued that the

squatters were only asking for sites and services, not programmed houses.

They also pointed out that there had been no input into the house

selection by any recognised community organisation such as ZOTO.xliv

Grassroots Participation

Official reliance on baranggay or ward leaders as principal protagonists

behind community mobilisation and project watchdogs has also earned the

ire of squatter organisations like ZOTO and popularly recognised

community leaders, who were in effect formally shut out from the

mainstream of the decision making process and implementation of the

Tondo project.



Deliberate exclusion of outspoken organisations and authoritarian

control were indirectly spelled out in one official project report outlining

the rationale of community relations as: “to actively involve the residents

in the propagation of values and attitudes desirable for a new community”

and “to neutralise and displace (author’s emphasis) any information which

tends to undermine the success of the project.”xlv

Official hostility towards militant ZOTO demands for wider

participation translated into regular outbursts of repression. ZOTO leaders

like Trinidad Herera and others were periodically arrested and detained or

driven underground. Military raids of community organisations’

headquarters and offices were conducted. Astutely shifting to more

pragmatic lobbying tactics vis-a-vis Bank technocrats as repression

mounted in the latter 70s, ZOTO-Ugnayan was to a certain extent able to

forestall the project. Hence, four years after its launching in late 1979,

only 25% of reblocking plans was complete.xlvi

In the final analysis, technocratic strategy in Tondo inevitably and

radically departed from its avowed objective of delivering affordable,

decent shelter and services to the urban poor and of harnessing and

enhancing their self-help potential and popular participation. While Bank

rhetoric claimed that the projects were directed at the very poor, the full

cost recovery premise of these programs effectively priced out their target

beneficiaries in favour of the upper and middle classes. As one author

elegantly put it:xlvii

“The final outcome of the World Bank’s urban strategy in the

Philippines is thus undistinguishable from the results of Imelda



Marcos’ “beautification projects:” Removal of the poor from the

choice parts of the city. The difference lies only in the means of

reaching this end: In place of the First Lady’s method of coerced

and immediate relocation, the Bank offers indirect and gradual

uprooting, accomplished with the indispensable assistance of the

real estate market.”

Reform and Resistance from Above: Urban

Landlords and Land Reform

Barely a year after the Tondo prototype lift-off, slum upgrading and sites

and services strategy was brought to higher altitude in mid-1977 when

Marcos issued two landmark Letters of Instruction (LOI 555 & 557)

instituting a nationwide Slum Improvement Program (SIR) and elevating

slum improvement to the status of national housing policy. More

significantly, these instructions signalled the formal relegation of slum

clearance and relocation to the backseat, only to serve as complementary

measure to slum improvement programs and following certain stringent

norms.xlviii

Basically replicating the cost recovery mechanics of the trail blazing

Tondo experiment, SIR was designed to deliver land and use of

improvements in target areas to bonafide residents “under long-term

leases for 25 years, with option to purchase after 10 years of continued

and uninterrupted occupancy” provided all subsidies and grants shall be

recovered in full from the buyer at 12% yearly interest from the time of

project construction.xlix



In the same vein, the Zonal Improvement Program (ZIP) was

designated as SIR’s Metro-Manila component under the aegis of Imelda

Marcos’ MMC. ZIP was a gigantic venture indeed. It committed to upgrade

in successive stages no less than 236 slum communities with a total

population of 172,572 families occupying public and private lands (636

hectares) scattered across the whole metropolis. Bankrolled with a $104

million loan from the World Bank, the program was to be operationalised

through inter-agency coordination and tripartite agreements between the

MMC, NHA and concerned local governments, and aimed at increasing the

role of the latter in planning, execution and cost recovery. Similar Bank-

funded upgrading projects were launched in other major cities (Cebu,

Davao and Cagayan de Oro).l

Given the amplitude of these nation and metro-wide upgrading

programs they would have been toothless without the institutionalisation

of a comprehensive expropriation strategy, since more than half of the

targeted slum and squatter areas were on private real estate. To crutch

the upgrading thrust, Marcos proclaimed a nationwide Urban Land Reform

(ULR) by virtue of PD 1578 in 1978, placing the program under the direct

supervision of his wife’s Ministry of Human Settlements (MHS). In spirit it

was a pioneering reform, linking exacerbating urban problems (i.e.

squatting) to the “traditional concept of landownership” and declaring as

state policy the liberation of communities from blight, the optimum use of

land, equitable access and opportunity to use land, and the alienation of

lands to check land speculation. To profit from the reform were legitimate

tenants defined as those who have resided on the land at least 10 years



and were to be granted the right of first refusal to purchase land for a

reasonable price.li

Pursuant to the ULR law, the entire metropolis was declared as

Urban Land reform Zone (ULRZ). This proclamation (Proc. 1893) reiterated

ULR sections that required all landowners concerned to register existing

rights and development proposals with the Human Settlements Regulatory

Commission (HSRC), the implementing machinery. But while ULR may

have been radical in spirit it was certainly weak in flesh.

Soon before the ink had dried on the paper on which reform was

written, an agitated phalanx of urban landlords, real estate dealers and

subdivision owners was up in arms. The landlord-led “rebellion” succeeded

to deflate the ULR’s scope to a mere 10% of Metro-Manila, confining it only

to river banks, land along railroad tracks and 415 blighted areas identified

by the NHA. This powerful bloc argued that the original scope would

engender land depreciation, and since most of these lands had been

mortgaged to banks, even the entire banking system would be in

jeopardy.lii

Not only did the geographical scope of the reform dramatically

depreciate in the end, it had in fact limited demographic coverage from

the very start. While it defined tenants and beneficiaries as “rightful

occupant of land and its structures,” it excluded those “whose presence is

merely tolerated and without benefit of a contract, those who enter the

land by force or deceit, or those whose possession is under litigation.” In

other words, squatters per definition were legally disqualified. Together

with the 10-year continuous residency rule, coverage of the program was



effectively narrowed down to the bane of the squatter and slum dwelling

majority. Further, ULR did not categorically provide that landowners must

limit their land holdings nor were they required to sell, thus, effectively

subjecting tenant rights to first refusal to the mercy of landowners’

caprice.liii

As far as the upgrading programs were concerned, a broad segment

of squatters was similarly discriminated by provisions on accreditation of

“bonafide residents,” invoking the 1975 Anti-Squatting Law which

considered squatters as criminal offenders and persona non grata. Those

who were credited faced imposing cost of development and affordability

constraints and the nagging threat of contract foreclosure. Moreover, the

expanded role of local governments in planning and implementation had

been both boon and bane: the temptation for local mayors to seek political

mileage out of ZIP is great since they make use of patron-client links with

local baranggay ward leaders. The local upgrading projects could be

exploited to prop up the mayor’s political mass base.liv

Back to the Basics: Bulldozers and Bogus Housing

By nationalising the slum upgrading strategy and its complementary

components through the SIR and ULR programs, fledgling contradictions

and conflict in the Tondo precedent case of the mid and late 70s were

inadvertently exported to other cities in the country. Popular

disenchantment over these perceived bogus reforms gradually intensified

and was no longer only confined to the capital city, the traditional

stronghold of squatter militance.



In Cagayan de Oro, for instance, one of the regional cities targeted

for slum upgrading under the World Bank sponsored Urban II in the distant

southern island of Mindanao, the city mayor requested to withdraw from

the project in 1980, asserting that it was imposing a tremendous fiscal

responsibility on the city and that most of the “beneficiaries” wouldn’t be

able to afford rentals on their upgraded sites, thereby ultimately saddling

them with the threat of eviction.lv In the face of mounting resistance, the

debacle of urban development programs and unmitigated growth of urban

poverty and squatting, urban management did eventually revert to the

more time-honoured tactic of eviction and relocation.

On an inspection tour of the city drainage and water systems in June

1982, Manila governess Imelda Marcos, offended by the unpleasant sight

of squatter shanties along the estuaries and canals, ordered the creation

of a metro-wide anti-squatting task force. Declaring an all-out offensive

against alleged “professional squatters” and “plain land grabbers taking

advantage of the compassionate society,” she unleashed a massive

eviction drive in 162 blighted areas, better known as “The Last

Campaign.” Drawn into the crusade were baranggay officials and police

instructed to monitor and arrest “all people squatting in public and private

lands in the city.” By 1984, 24,000 families had been whisked away to old

and new yet inadequately served relocation sites in direct violation of

current official norms on resettlement. On top of that, an additional

76,0000 were earmarked for future displacement.lvi

Apparently, while the stick was being wielded by one hand, the

other was busy dangling the carrot of modicum social shelter delivery. The



latter, epitomised by the official launching of a National Shelter Program

(NSP) in 1978, was spearheaded by none other than Imelda Marcos’

Ministry of Human Settlements (MHS). Integrating regulation, production,

finance and marketing components of state house delivery programs, and

knitting together seven agencies (NHA, NHC, HSDC, HSRC, HFC, NHFMC,

HDMF), NSP envisaged to churn out 100,000 new units annually over a

ten-year period.

In Metro-Manila, 200,000 were expected to be constructed between

1983-1987. While these dazzling figures may generally hike availability,

how much do they actually tally with actual accessibility and low income

demand for housing, or metaphorically, how much of the shelter delivery

carrot is really dangled to the poor? To begin with, according to one study,

of the total projected construction, a large part of which was to be

delivered by private developers, only 1/6 of the units was devoted to social

housing. A composite profile illustrating the relation between program

beneficiaries and their income levels show that the tilt of the program was

distinctly towards middle income families (62%), while only 27% went to

the lower half of the income table.lvii Another study evaluating NSP’s

shelter financing program noted:lviii

“What it has failed to achieve so far is the fulfilment of its

promise to the bulk of the people who contribute a portion of

their monthly salary to the fund (i.e. the Home Development

Mutual Fund or Pag-ibig Fund, the government agency charged

with the development of saving schemes for home acquisition by

private and public employee affiliates) which helps finance



housing activities ... poor families are still deprived of hosuing

loans not because there are explicit rules against their borrowing

but because of their low incomes, high housing prices and some

explicit barriers in the lending process itself ... What is more

disheartening: some high income borrowers avail of the loans to

finance the acquisition of more housing units for purposes other

than living in them.” (Suggesting inter alia the emergence of

petty landlords)

Notes



iAMAWIM IV, 1990: 4; Meijer, op cit.iiPHC was mandated by the Homesite Act of 1936 to develop expropriated urban lands intosubdivisions for low wage earners in the late 30s. Before the outbreak of World War II, NHC wascreated to undertake urban housing, subdivision and slum clearance programs. Operating under the

predominant view which equated the slum and squatter phenomenon with public health and safetyhazards, these incipient programs and agencies tended to focus more on slum clearance and limited

relocation, and generally paid lip service to low cost housing need. Angeles, 1988: 47-48.iiiGSIS initiated individual loan grants for housing to its affiliates in 1955, while a similar programwas launched by the SSS two years later. Ibid: 50-51.ivIbidvKeyes, 1980: 5.viKeyes, 1975, 1980; Ruland, 1980, 1985; Angeles, 1985; UNICEF, 1986.viiFor example, as Keyes noted, “88% of SSS members earn less than 500 pesos monthly. Yet 500

pesos is the benchmark used by SSS’s real estate department evaluators as a minimum wage belowwhich applicants are usually not considered. If the ordinary wage earners house cannot cost morethan 10,000 pesos (2.5 years salary) and SSS only helps to finance homes that cost an average of 30,000 pesos, it is obvious that the system’s custodial role over members funds, in practice, results

in using the funds of the poor to finance the homes of higher income groups. Keyes, 1975: 412.viiiRuland, 1985: 21-23.ixMeijer, 1986: 40.xUNICEF, 1986: 57.xiMakil, 1983: 4-5xiiMeijer, op cit: 41.xiiiIbid: 42-43; Makil, op cit: 4-5; Ruland, 1985: 9-10.xivRuland, 1985: 10-13; Ruland, 1980: 64-65.xvBello, op cit: 19-20; Rojas, 1987: 6-7.xviCaoili, op cit: 128.xviiIbid: 128-29.xviiiStone & Marsella, 1976: 89-90.xixLaquian in UNICEF, 1986: 29-30.xxBello, op cit: 20; Rojas, 1987.xxiAs Benedict Anderson noted: “Marcos bent (the oligarchy) to his will by punishing financially

particular oligarches he disliked or feared, and by abolishing the political and legal structures bywhich the oligarchy’s economic power was independently safeguarded. But he was one of them inevery way - though with the good fortune to have the state military and the police as his privatearm.” Quoted in Rojas, 1987: 6.xxiiCaoili, op cit: 156-58.xxiiiBello, op cit: 105.xxiv

Ibid; Particularly, the baranggay system was an innovative institution of grassroots control.While traditional clientist venues and forms of popular mobilisation and community control wereextinguished by Martial rule, they were replaced by the legitimising role of the baranggays instituted in 1972. They acted as intermediaries between government authorities and communityresidents. The baranggays were allegedly formed to serve as the base of citizens participation and toexecute government legislations and programs. However, baranggay officials were not elected, butappointed by local mayors. Popular participation was carried out merely in the form of petition.Officials of the baranggay assembly (whose function was basically recommendatory) wereaccountable only to higher government authorities. In this context, the baranggay’s principal

participatory function was reduced to vulgar legitimation. Auxillary components to it, like thetanods or civilian custodians of peace and order in the neighbourhoods, were enjoined to cooperate

with military authorities in surveillance and intelligence work, denunciating alleged subversiveactivities in the communities. See Renne, 1988: 49-51; Ruland, 1980: 69-70.



xxvAs Bello noted, only the middle and upper classes and tourists really figured in Imelda Marcos’vision and showed in her construction priorities: $300 million were sunk into a score of luxuryhotels, several million went to building the monumental Conventional Centre designed to hostinternational conferences and the Cultural Centre catering to the decadence of the Westernised elite.Bello, op cit: 106.xxviDuring previous periods, as we’ve noted elsewhere, squatting was considered as “public

nuisance” under the Civil Code (CC Art 695). Power to abate nuisances was granted by the citycharter to the mayor of Manila, reinforced further by a 1967 Supreme Court decision affirming theright of city authorities to abate squatting and skirt legal proceedings. AMAWIM, July-Sept 1987:9-10.xxviiRuland, 1980: 16.xxviiivan Naersen, 1987: 7; Ruland, 1985: 14.xxixBello, op cit: 107.xxxBy the end of the 60s, the stereotypes which until then had beset the image of slum dwellers andsquatters were successfully refuted in pioneering works on Third World urbanisation by those likeAbrams (1966), Turner (1972) and others. A short menu of their salient conclusions include: thatslums and squatter settlements were a rational and functionally adequate response to socio-

economic deprivation and the shortage in cheap and centrally located housing; without security of tenure, some infrastructure development and the provision of basic public services, there is no

prospect of improvement for the living conditions of the urban poor; slum and squatter settlementsoffer housing through self-building or application of simple building techniques satisfying basicneeds. Thus, viable strategies should be premised on the affordability reach of the poor; housingservices should be “user oriented” provided with participation of target groups and self-help

potential of the poor must be mobilised. Ruland, 1985: 24-30.xxxiIbid.xxxiiKeyes, 1980: 11; Encarnacion et al in Jose, 1982: 175-76.xxxiiiAMAWIM, Oct-Dec 1987: 8.xxxivEncarnacion, op cit: 171-201.xxxvUNICEF, 1986: 53.xxxviBello, op cit: 109-10.xxxviiIbid: 110-11.xxxviiiIbid; Encarnacion, op cit: 182-83; UNICEF, op cit: 54.xxxixFor instance, RA 2439 amending the 1956 law enlarged the alienable portion of the TF area.Succeeding proclamation (Proclamation 788 in 1961 and 378 in 1968) deflated the scope of

preceding acts while Executive Order 297 in 1971 declared a large part of the TF as customs zone,implying the effective dissolution of at least 5 squatter communities in TF’s Zone One District. Noless than 28 laws were passed before 1972 to address the TF land conflict. Elegant reviews on thesubject have been provided by Sembrano, op cit: 31-34; ZOTO, 1973: 3-4, 7-9; SCAPS, 1983: 20-

22, 40-41.xlSCAPS, 1983: 22-24; Urban Land Reform and Housing ...1988; Tri-Sectoral Workshop on NHAPolicies. 1989; Keyes, op cit: 12-13; Bello, op cit: 112.xliBello, ibid: 112-13.xliiIbid.xliiiAMAWIM, July-Spet 1987: 20.xlivZOTO, 1976.xlvIbid.xlviBello, op cit: 116.xlviiIbid: 118.xlviiiApart from its complementary role, slum clearance and relocation shall be applied only in cases

where squatter families are staying in areas dangerous to public safety or are needed for officialinfrastructure programs. Stringent norms for relocation were defined: Proximity to work places;out-city relocation must provide for economic opportunities and must be premised on the



availability of pre-developed sites complete with basic infrastructure and services.UNICEF, op cit:53.xlixAMAWIM, July-Spet, 1987: 12.lSkinner et al, 1987: 26-27; Meijer, op cit: 51-53.liJimenez et al, 1986: 55; CCUP, 1982; Urban Land Reform & Housing ... 1988.liiProgram scopoe shifted from full coverage of the entire Metro-Manila in 1970 to lands within s-c

Areas of Priority Development (APD) in general by virtue of LOI 935 the same year and finallyonly applicable to 245 selected APD after the passage of Proclamation No. 2234 in 1983. Soontorn,1986: 14; Urban Land Reform and Housing ...ibid; AMAWIM, July-Sept 1987.liiiAMAWIM, ibid: 14.livMeijer, op cit: 52; Jimenez, op cit: 54.lvBello, op cit: 122-23.lviMakil, 1982: 12-13; Meijer, op cit: 53; van Naersen, 1987: 13.lviiAngeles, 1985: 59-60; Meijer, 1986: 61-62.lviiiAngeles, ibid: 76.

Documents

Managing Post-Colonial City Crisis & the Crisis of Management, Interventions From Above: State & the World Bank, 1946-1986