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Corruption stunts RP property sector growth

By Jerimiel Santos
12/27/2011 [ ]

Despite the supposed all-out effort of the Aquino administration to stamp out graft, experts from the Center for International Private Enterprise (CIPE), Institute for Solidarity in Asia (ISA), has identified in a forum, corruption as the persistent obstacle in the development of the local property market.

Officials and representatives from different businesses, banks, non-government organizations and various national agencies had unanimously agreed in a round-table forum in Makati that corruption both in national and local agencies in charge of property transactions as the major sources of corruption in the property sector.

Practices such as the overpricing of land sold to developers, rampant “fixing,” and bureaucratic anomalies in land development and property transactions were identified as the major hindrances to boost the property market in the country.

Moreover, corruption greatly affects the prospects of particularly small-scale entrepreneurs.

“According to the Chamber of Real Estate Builder’s Association and the Subdivision and Housing Developers Association, facilitation payments are rampant at every step of obtaining various development permits. This money, now lost to corruption, should be used for building schools and roads intead,” an urban planner and real estate practitioner architect Felino Palafox Jr. said.

In a roundtable dialog, experts called for the stronger enforcement of laws and policies to address the issue of corruption such as the whistle-blower protection law, comprehensive land use plan, and valuation reform bills, as well as reforming of processes in property registration and administration to computerization program.

The issue of overlapping functions of government agencies that creates various anomalies in the property administration and processes, was also mentioned.

Experts urged the reform of measures both in national and local agencies particularly in property administration agencies and unify in a single focal institution. As well as to devolve other functions of land administration at the local government units (LGUs).

Furthermore, experts said that it is also important to review and amend relevant existing laws, or repeal obsolete regulations such as law governing construction, land classification, zoning and urban planning which have become the major sources of corruptions.

“We need such private sector recommendations to come before the revision of laws technical working group in Congress in order to improve private sector participation in governance and accountability,” Rep. Mel Senen Sarmiento said.

Experts also urged the enactment of the Land Administration Act (which is also known as LARA Bill), which would address the problem in overlapping of government agencies as well as the creation of the Land Administration Authority that will serve as the “watchdog” in the process.

The problem of informal settlers particularly in Manila and Pampanga was also discussed in the forum. Experts agreed that it remains crucial problem and stressed the need of coordination and information sharing between the national government and LGUs to address the problem.

Experts said the LGUs should be educated about the laws to take full advantage of bringing secure ownership for small entrepreneurs and also to increase tax revenue to local governments.

Meanwhile, participants also insisted on the need to improve the needs to improve access to credit and financing programs by instituting both policy reforms and flexibility in lending to small and medium-sized businesses as well as to improve the judiciary system of the country.

Experts said that the judiciary in the Philippines should have further training, capacity building, and accountability mechanisms in the settlement of property-related cases and issues, legal ownership and informal settlement in order to address the issue of the worsening property market of the country.

ISA and CIPE are now in the process of planning for the next projects to focus on addressing reform priorities to boost the property market in the Philippines.

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