The phenomenon of urban slums and informal settlements have been characterized by unsanitary conditions, congestion and limited access to basic urban services, like health centers, schools, waste disposal and safe water supply. While the housing sector is expected to contribute in attaining the MDG target on improving the lives of at least 100 million slum dwellers worldwide by 2020, the formulation of the National Slum Upgrading Strategy and the setting of national targets for urban renewal and slum upgrading efforts should allow a more systematic and detailed assessment of the Philippines' contribution to the global goal in the coming years.
The annual public expenditure for housing in the Philippines, which is approximately less than 1 percent of the total government expenditures, accounts for less than 0.1 percent of GDP, which is one of the lowest in Asia (Habito, 2009). The limited budget, unclear compliance of the provision of the Urban Development and Housing Act (i.e., allocation of at least 20 percent of total project cost in every housing development for socialized housing finance), and reliance to the social insurance system to finance housing needs effectively limit the access of the poor to housing assistance. Government shelter strategies are focused on increasing housing production either by direct provision of housing units/loans or by giving incentives to developers who cater mainly to the formal sector and the middle/high-income households. These approaches do not address the fundamental issues of land supply constraints and financing, weak institutional mechanisms in housing construction and the financial environment, and unclear focus on poverty reduction (Ballesteros, 2010).
The HGC must be strengthened through equity infusion from the government to establish a stronger guaranty system that will encourage the funding of socialized and low-cost housing projects by the private sector and housing developers. Funds for housing can be secured and sustained, only if there is a viable system of guarantees for both the government and private financial institutions that cater to the funding requirements of housing production and end-user financing. The HGC can guaranty loans granted by financial institutions and developers for housing up to 20 times its net worth.