Housing and tourism

The two other big failures of BBM’s administration are housing and tourism.

BBM recognized the failure of housing by reassigning his appointed housing secretary to help rehabilitate the Pasig River. BBM has not acted yet on the tourism secretary.

A new housing secretary is not likely to make a big difference unless a new concept on how to solve the housing problem is adopted. The new housing secretary is from the construction sector and is highly esteemed in the industry. But the problem isn’t construction, it’s financing and affordability.

The previous housing secretary made an outrageous target of building six million units, or a million units a year. Of course, he failed. He was still thinking of home ownership, which decades of experience have proved not feasible.

Two years ago, I quoted in this column how an urban planner described the nature of our response to the housing problem:
“Current housing backlog is 6.5 million units (and increasing); low-cost estimate of socialized housing units is P500,000/unit (on cheap land away from employment centers, excluding access roads and external utilities; 36 sqm lot and 22 sqm floor area), total cost is P3.25 trillion.”

Gerry Choa, a successful property developer and a colleague at the Foundation for Economic Freedom, made this comment:

“I think the housing model should be viewed principally as poverty alleviation to work. Home ownership is not the need of the poor urban settlers, just as land ownership in agrarian reform simply makes the poor even poorer.”

The mismatch of their income-earning capability to their living expenses is the issue of poverty, Gerry explains. Rental housing near where jobs are available allows better income-generating activities while reducing the cost of living.

What could be done

Test a public rental housing model. Informal urban settlers are now paying about P5,000 a month renting shanties from slumlords, usually police officers, barangay officials, and professional squatters. The rental cost is affordable, if barely, but the location is close to places where they can earn a living and not in government relocation sites away from civilization.

A good rental housing project, Gerry explains, should be able “to intervene on both ends of the equation… providing better income-generating opportunities while reducing the cost of living.”

Gerry is putting his money where his mouth is and will try a proof-of-concept project in Cavite. He is working on a monthly rent of P3,500.

The government should drop its current housing program based on a concept that has repeatedly failed for decades. It is time to try a new one, because unless we do, the construction prowess of the new housing secretary will be irrelevant. Solve first the financing and affordability aspects.

Put it another way: the housing secretary should have more skills in financial packaging and managing social communities than construction. Honestly, construction is the easier part in solving the housing problem, especially with new technology available.

According to ChatGPT, 3D printing is already being tested in the Philippines. If true, it can supposedly reduce building costs by up to 60 percent, making housing more affordable for low-income families. Some structures can be printed in as little as 100 hours, significantly accelerating the construction timeline.

For tourism, the continuing failure is simply because tourism bureaucrats have been focusing on the icing (the foreign exhibitions and foreign junkets) instead of baking the cake first. The product, other than what God has given us in terms of natural beauty, is not ready for prime time.

The numbers are in, and it’s pathetic. Only some 2.1 million tourists arrived from January to April 2025, slightly down by 0.8 percent compared to the same period last year, but 27 percent lower than the 2.9 million tourists during January to April 2019.

Last year, the arrivals were also below the target of 7.7 million under the National Tourism Development Plan of 2023–2028. Based on initial data, it appears that the government will also miss this year’s target of 8.4 million visitors.

The Travel and Tourism Development Index measures key factors and policies that enable the development of the travel and tourism sector. Based on its 2024 report, the Philippines ranked 69th out of 119 countries overall. We are trailing Indonesia (22nd), Malaysia (35th), Thailand (47th) and Vietnam (59th).

Tourism is important because it has the potential to be a major growth driver. It can help in our pursuit of inclusive growth by boosting the income of the population, supporting the growth of micro and small enterprises, and generating local employment, particularly in the rural areas where tourist hotspots are located.

Commenting on the article by Stella Arnaldo of
Business Mirror on the tourism numbers, former finance secretary Gary Teves urged major investments in tourism infrastructure to include upgrades to airports, seaports, power supply, water supply, and internet access. Also add a staffed emergency health facility. Public-private partnerships could help fast-track investments in these areas.

Sec. Gary also urged better protection of tourists. The incidence of crimes deters travelers from coming. Police visibility is a must, especially in areas with a high volume of tourists. In Thailand, the government has launched a tourist police mobile app where tourists can report incidents and seek assistance.

Sec. Gary also wants the VAT refund process for tourists made as friendly as possible. Simplify requirements and have accessible tax refund counters nationwide.

I think we need more drastic measures. We should declare key tourism centers like Boracay and Siargao as Special Tourism Zones to be managed by tourism professionals and free from the interference of LGU officials.

The Special Tourism Zones should pay local taxes to the LGU, but that’s all. The LGU in Boracay has proven incompetent in managing basic services, from sanitation to peace and order. It also has this bad habit of imposing more and more fees on visitors.

New ideas are essential to achieve better outcomes for housing and tourism.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco