* This is my column in BusinessWorld last February 8, 2018.
Urbanization, like technological innovation and mass
production of mobile phones and other gadgets, is among the important reasons
why people’s lives have become more comfortable. Many necessities like schools
and work offices, supermarkets and groceries, hospitals and clinics, are
nearby. People no longer need travel for hours or even days just to get to the
nearest health facility.
Vertical structures like residential and office
condominiums immediately free up huge tracts of land for other purposes such as
public parks, stadiums, and sports facilities. Subways and elevated train
tracks, underground tunnels, elevated roads, and interchanges for vehicles
significantly improve traffic flow.
Urbanization and more dense cities therefore, is good.
The continued rise in urban population is proof that despite complaints of
congestion, people realize that the advantages trump the disadvantages of
living in big cities. Urbanization therefore, should continue and expand, not
restricted and bureaucratized.
The Foundation for Economic Freedom (FEF) organized a
lecture on “National Land Policy in the Philippines” in late October 2017 at
Ascott Makati. The main speaker was Arturo G. Corpuz, a noted Urban regional
planner and FEF Trustee.
In his presentation, Art said that the proposed National
Land Use Act (NALUA) under HB 5240 (the Senate versions have similar provisions
with it) suffer from biases and restrictions. Among these:
1. Supply side bias. The underlying philosophy is that
land should be used based on what it is “physically suitable” for regardless of
demand. Art says the world works differently from this bias, the reality is
that land value and demand determines land use and hence, land suitability.
Food self-sufficiency policy leads to locking up
irrigated and irrigable land, alluvial plains, croplands, highlands instead of
focusing on raising productivity and farmers’ incomes, like allow or encourage
land consolidation for farming economies of scale.
2. Protection focus. Dominance of protection in HB5240:
(a) Protection land use prevails over any other activity, all other uses are
residual to protection. (b) 8 of 13 policies/principles are about protection.
(c) The departments of agrarian reform, agriculture, and environment and
natural resources control the supply of land and these three agencies plus the
National Economic and Development Authority, the Department of Interior and Local
Government, the National Commission on Indigenous Peoples, the Housing and
Urban Development Coordinating Council, the Housing and Land Use Regulatory
Board, the National Mapping and Resource Information Authority, the League of
Cities of the Philippines, and the 12 sector representatives are members of
National Land Use Policy Council (NLUPC). (d) DTI, DoT, DoTr, DPWH, DoF are not
members.
Art says there is nothing wrong with protecting and using
land only for forests and agriculture but it has to be balanced with the
requirements of growth. Otherwise, corruption is encouraged as legitimate
growth is not accommodated legally and incentives to do things illegally are
created. And restricting growth especially in large cities can lead to more
land conversion somewhere.
3. Planning structure/bureaucracy. Agencies responsible
for determining supply are not the same agencies responsible for accommodating
demand. They should be the same, like NLUPC = NEDA Board.
The Comprehensive Land Use Plan (CLUP) is the ground zero
of land use planning and regulation, basis of zoning ordinance. Only 22% of
1,634 LGUs have approved CLUP (2017) and local zoning is used for rent-seeking
through negotiations regarding land classification, parking requirements,
building heights/densities, and reclamation. There is a need to increase
transparency among LGUs.
I checked urbanization numbers in Asia and one thing
surprised me — the Philippines is experiencing de-urbanization. While almost
all countries have rising urbanization rate through time, the Philippines has a
declining rate (see table).
Problems #2 and #3 — protection-focused and bureaucracies
— discussed by Art above would be the most feasible explanation. Urbanization
is taking place on a nationwide scale but many are listed as “illegal” by the
various agencies. As a result, many land areas covered by their corresponding
population expansion are still considered as “rural areas” and hence, not
urbanized.
Government as “referee” should address competing land use
of the country through legislation but it should free up and liberalize, not
restrict and bureaucratize, land conversions.
Bienvenido S. Oplas, Jr. is President of Minimal
Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.
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See also:
BWorld 183, Why low or zero income tax can mean more development, February 09, 2018
BWorld 183, Why low or zero income tax can mean more development, February 09, 2018
BWorld 184, ERC paralysis and implications for consumers, February 11, 2018
BWorld 185, Lower taxes via more mineral exports, February 06, 2018
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