Parallel with Armenia, Kenya, China, and Russia, the Philippines has been a part of a international effort to identify and address barriers that keep small businesses from participating in the property markets, focusing on property rights and access to credit.

Findings from the recently released report on the Philippines (December 2011)  can be accessed here.

This initiative by the Center for International Private Enterprise (CIPE) is led in the Philippines by the Institute for Solidarity in Asia (ISA), CIPE’s country partner.

The International Property Markets Scorecard, jointly developed by CIPE and the International Real Property Foundation (IRPF), maps the key institutional components of property markets: property rights laws and enforcement, access to credit, efficiency of governance, rational dispute resolution, financial transparency, and appropriate regulations. The Scorecard also measures their effectiveness through a mix of international indicators and in-country legislative research, as well as fieldwork consisting of focus groups and interviews with small businesses, legal and banking experts, real estate professionals, and government officials.

Although private property rights in most countries are legally protected, the implementation of such laws is often insufficient or incomplete. What is more, the understanding of property rights frequently remains limited to property titles, without recognizing the underlying and interconnected institutions that make property rights meaningful. Those shortcomings in property market systems disproportionately affect small enterprises that in most countries are the backbone of the economy and yet face serious barriers in property transactions.

In the Philippines, Micro-, Small- and Medium-Scale Enterprises (MSMEs) in 2009 generated 3.6 million jobs, or about 63 percent of the total employment generated by all types of businesses. CIPE and ISA chose to focus on Manila and San Fernando, Pampanga where many of those businesses operate.

In May and June, ISA conducted focus groups and interviews with stakeholders in those two cities with assistance from the Philippine Chamber of Commerce and Industry, the Manila Chamber of Commerce and Industry, and the Pampanga Chamber of Commerce and Industry, its local partners for this project. Consultations were also held with the Bankers Institute of the Philippines, the Rural Bankers’ Association of the Philippines, and Colliers International. ISA and CIPE validated the findings in a July expert roundtable held with public and private sector experts in real estate, banking, and public policy.

Small business owners reported having to contend with bureaucratic hurdles as a result of corruption, overlapping functions of agencies, and red tape in processes related to land administration (registration, transfers of titles, safety of records), which increase the cost of doing business. They also reported difficulties in accessing credit as a result of strict lending requirements of banks.

To address these concerns, the Scorecard findings identified specific reform initiatives such as the need for more efficient land titling computerization, more proper implementation of the Urban Development and Housing Act of 1991 (Lina Law), or broader access to credit through lending requirements better tailored to small business needs.

While it is crucial that such initiatives be undertaken within the framework of greater cooperation between national government offices and local government units, the Philippines should also benchmark various practices in its property markets against the experiences of other countries to follow international best practices.

According to Ms. Marissa Benitez of Colliers International Philippines, one of the recognized real estate consultants in the country, “there is a need for international standards in real estate practice to be implemented in the country”.

The Philippines final report is now out, and can be accessed at www.isacenter.org. Please check www.cipe.org for updates on other country reports. For further inquiries and/or requests, please contact the ISA office at +632.886.36.52 or 845.28.67, or email lmontesclaros@isacenter.org or mantonio@isacenter.org.

To access the final report which contains findings and reform recommendations, please access: International Property Markets Scorecard – Report-Philippines – December 2011

To access the appendices to the report, please access: Appendices to Final Report – Dec 2011

Further building our nation and bringing about genuine development to our people would take us a few Administrations, perhaps at least a generation or even more. Thus, while understandably we focus on the next six years, we should also allow our vision to stretch way beyond 2016, at the very least up to 2030.

Our vision that we should aim to realize by 2030 should enable us to put behind us one of the deepest problems we have yet to resolve, that of greater national cohesion and national unity. The Vision for Philippines 2030 is put forward as follows: Isang Sambayanang may Kapunuan ng Buhay, i.e. one community with a fullness of life, with special accent and emphasis on “one”. This underscores the dream we ought to realize as a people some 20 years from now—one nation with responsible citizens who deeply love their motherland. Thus, as we love to repeat rather often: Isang baying maka-Diyos at Isang lahing maka-bayan, i.e. one people with strong democratic institutions effectively working for the common good.

We still have to become one national community, one nation, and one people! This demands of all of us responsible citizenship, which makes us identify our nation’s affairs as our very own, our nation’s problems as ours to solve, and our nation’s progress as ours to achieve. This identification with the fate, fortune, progress, and development of our people is how we show deep love for our motherland, and that love needs to be shown in deeds of generosity, selflessness, and commitment to the common good every hour of each week, or as we say nowadays, 24/7.

The exercise of responsible citizenship, which is a duty on the part of all, without any exception whatsoever, is best done through democratic institutions. Institutions take our focus way beyond mere personalities, who necessarily have to leave and pass away from whichever part of the national stage they may occupy for a time. They make us focus on those instruments of a democracy that need to endure: these are the ones that last; they stay from one generation to the next; moreover, they need to be strengthened and made more effective with the passage of time. This task of strengthening democratic institutions is an immediate challenge we need to rise up to, most especially in the next two decades.

It is through our democratic institutions that each one of us is called upon to work effectively for the common good of and in our motherland. Again, the focus should be way beyond self, i.e. beyond ego, beyond immediate family and close relations, and even beyond narrower geographical circumscriptions such as municipalities, provinces, cities, and regions. Rather, our focus should be on what each one of us can do, and what our respective families, municipalities, provinces, and cities can contribute to the general welfare and genuine development of our country, our Inang Bayan. This is a clear invitation for our spirits to soar beyond narrow boundaries and reach national heights, because the nation is our motherland, and we have to give due respect to, and take great care of, our country—our motherland! No one else will.

Strengthening our “democratic institutions” as part of our vision to actualize in the next 20 years would give flesh to what we should continuously be pursuing as part of our mission, that of securing for ourselves and our posterity the “blessings of independence and democracy”. Furthermore, getting every one of us, as responsible citizens, to work “effectively for the common good” as part of our vision up to 2030 would also tie in very well with what we have to keep pursuing as part of our mission, that of “promoting the common good” and of “conserving and developing our patrimony”.

Once again, we have consistency, in this instance between our continuing, permanent mission as a people and our more concrete vision to actualize by 2030.

Manila, January 19, 2010

From his column, “Swimming against the Current,”

Manila Bulletin