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PDF hosted at the Radboud Repository of the Radboud University Nijmegen The following full text is a publisher's version. For additional information about this publication click this link. http://hdl.handle.net/2066/18904 Please be advised that this information was generated on 2017-12-05 and may be subject to change. The Urban Land and Real Estate Market in Metro Manila A Socio-Economic Analysis THE URBAN LAND AND REAL ESTATE MARKET IN METRO MANILA: A SOCIO-ECONOMIC ANALYSIS een wetenschappelijke proeve op het gebied van de Sociale Wetenschappen Proefschrift ter verkrijging van de graad van doctor aan de Katholieke Universiteit Nijmegen, volgens besluit van het College van Decanen in het openbaar te verdedigen op dinsdag 12 september 2000 des namiddags om 1.30 uur precies door Marife Magno - Ballesteros geboren op 13 februari 1964 te Tuguegarao, Cagayan, Philippines Promotor: Prof. Dr. W. G. Wolters Co-promotor: Dr. Gilberto M. Llanto (PIDS, Metro Manila) Manuscriptcommissie: Prof. dr. O. D. van den Muijzenberg (UvA) Prof. dr. L. de Haan Dr. A. L. van Naerssen Book design: R. F. Santos Manila, Philippines Contents A cknow ledgem ents................................................................................................... vii List of A bbreviations.................................................................................................. ix C hapter 1: Introduction...............................................................................................1 Chapter 2: The Physical and Organizational Dimensions of the Urban Land and Real Estate M arket..........................................................16 Chapter 3: Land as a Commodity: Legislation and Titling Problem s............45 Chapter 4: The Development Control Process: Permits, Licenses and Planning Strategies...........................................................66 Chapter 5: Real Estate Activity in Boom and Slump Periods........................ 111 Chapter 6: Market Clearing in Competitive and Fixed Price Land and Real Estate M arkets.........................................................................................127 Chapter 7: Market Clearing in Lands with Insecure Property Rights......... 152 Chapter 8: Transaction Cost, Land Development Multipliers and Relational Contracting....................................................................................177 Chapter 9: Summary and Conclusions............................................................... 203 References.................................................................................................................. 217 Appendix A: Features of Governm ent Housing Finance Program s............229 Appendix B: Slum Upgrading Programs, Metro Manila............................... 235 Appendix C: Community Mortgage Programs, Metro Manila.....................238 vii Acknowledgements his study has been m ade possible by a four-year research grant from the TNetherlands Foundation for Tropical Research (WOTRO), which is here gratefully acknowledged. The process of focusing the research, collecting data, getting background information and writing the manuscript has taken five years during which I have experienced the help and assistance of a number of people and institutions. I am specifically indebted to Prof. Willem Wolters and Dr. Gilberto Llanto for assisting me in untangling the knot of concepts, ideas and hypotheses in the course of my research and writing. Prof. Wolters provided direction to my work by introducing me to the emerging field of socio-economics and the theory of institutions. Dr. Llanto contributed critical comments at various stages that further lent clarity and precision to this work. The study also benefited from the ideas of experts in the field of urban economics and statistics both from the Netherlands and the Philippines. In particular, I am thankful to Prof. dr. Barrie Needham, Dr. Erwin van der Krabben, Prof. Dr. Felipe Medalla and Prof. Ruperto Alonzo, whose suggestions have led me to interesting insights and references. Mr. Robert Paluszka of Econotec, whose extensive exposure to statistical analyses of real estate prices has provided me with the background on how to incorporate macrodata into the analysis. Mr. Ruben Mercado whose field and research experiences in regional development and city planning has introduced me to the right networks. Needless to say, all faults and fallacies in this work are my responsibility. The early part of my research work was spent at the Department of Social and Cultural Anthropology at the Catholic University of Nijmegen, and I would like to thank Prof. dr. Frans Husken, Mrs. Bredveld, Oscar Salemink for their support during my stay. Research for this book involved extensive fieldwork. Many officials of various national agencies and local government units allowed me access to their information and data during my fieldwork. I am also indebted to the real estate developers, officials and staff of real estate development companies, brokers and practitioners who took time from their busy schedules to educate me on the ins and outs of this business. Unfortunately, I have to omit their names here not only for brevity's sake but also to protect their identities. My fieldwork in the squatter areas and housing projects of viii The Urban Land and Real Estate Market in Metro Manila: A Socio-economic Analysis the government were enlightening experiences on the "informality" of developments and transactions in the land market. I am specifically grateful to the field officers of the Community-Based Project Division of the National Housing Authority who were my companions during those interviews with the squatter associations. During the course of my fieldwork, studies on the impact of agricultural land conversions were being undertaken. The researchers specifically Prof. Dr. Corazon Aragon of the University of the Philippines at Los Baños, Ms. Blanquita Reyes of the Institute of Agrarian Studies (IAST), and the staff of the Department of Agrarian Reform (DAR) shared with me their field interviews and a wealth of processed data from their studies. The information and data gathered from library and field works would not have been organized without the research assistance provided by Meanne Dizon, Bless Datu, Melody de Guzman, Bieth Gerardo, Raquel Kunting and Lanie Basilio who in various stages unselfishly helped me in the gathering, computerization and processing of data. My special thanks to Rona Magno for always accommodating my request for editing and to Delia Romero for helping me with my personal needs. I would also like to thank the Philippine Institute for Development Studies (PIDS) for its support during my fieldwork and dissertation writing. I wish to convey my heartfelt gratitude to friends in the Netherlands especially Ingrid Diaz, Dorien Ypma and her family, Rene van der Haar, Janneke Hulsker and Hely Maling, who shared their time, resources and homes to enliven my stay in the country. In the Philippines, I am indebted to the PIDS Bible Study Group for their prayers, spiritual and moral support. I am specifically grateful to Melanie Milo, a friend, who has always been around to share my joys, sorrows and problems during the course of dissertation writing. A special note of thanks goes to my mom and parents-in-law, who understood my need for space and time. To Popoy, who performed the roles of partner and mentor and to Angela and Gabrielle, who constantly demanded that I take a break, I dedicate this book. Finally, the completion of this book would not have been possible without the strength and wisdom that only comes from intimately knowing the Lord Jesus. To God be the glory. ix List of Abbreviations A & D Alienable and disposable lands AO Administrative Order APD Area for Priority Development BCA Benefit Cost Analysis BFD Bureau of Forest Management (now Forest Management Bureau) BIR Bureau of Internal Revenue BLAD Bureau of Land Acquisition and Development BP Batas Pambansa BSWM Bureau of Soils and Water Management CALABARZON Cavite, Laguna, Batangas, Rizal and Quezon CARP Comprehensive Agrarian Reform Program CBDAP Condominium Builders and Developers Association of the Philippines CBO Community Based Organizations CCAD Center for Community Assistance and Development CENRO Community Environment and Natural Resource Officer CFI Court of First Instance (now Regional Trial Court or RTC) CLT Certificate of Land Transfer CLUPPI Center for Land Use Policy, Planning, and Implementation CLUPS Comprehensive Land Use Plans CREBA Chamber of Real Estate and Builders Association DA Department of Agriculture DAR Department of Agrarian Reform DARAB DAR Adjudication Board DARCO DAR Community Office DENR Department of Environment and Natural Resources DOH Department of Health DOJ Department of Justice EC Environmental Clearance ECC Environmental Compliance Certificate EMB Environmental M anagement Bureau GSIS Government Social Insurance Service HIGC Housing Insurance and Guarantee Corporation HLURB Housing Land Use and Regulatory Board HSRC Housing and Settlement Regulatory Commission (now HLURB) HUDCC Housing and Urban Development Coordinating Council INP Integrated National Police LGU Local Government Unit x The Urban Land and Real Estate Market in Metro Manila: A Socio-economic Analysis LMB Land Management Bureau (formerly Bureau of Lands) LRA Land Registration Authority LUC Land Use Conversion LWUA Local Waterworks and Utilities administration MARO Municipal Agrarian Reform Officer MERALCO Metro Manila Electric