The Philippines is one of the fastest urbanizing countries in the Southeast Asian Region. Since the 1950s, millions have migrated from rural areas to cities in search of better job opportunities. The country is now 50 percent urban, and by 2025, this proportion is expected to be 80 percent. During the 2000-2010 period, Metro Manila added an additional 2 million people. While the country has more than 200 urban areas, Metro Manila would continue to dominate (with 50 percent of GDP being generated by the greater Metro Manila area alone1) and absorb more people around its periphery.  With an unprecedented rate of in-migration came surges in demand for jobs, housing, and basic services in major cities. The government has been unable to address the increased demand, resulting in an enormous gap in infrastructure and basic services, affordable housing, and jobs, as well as traffic congestion. As cities fail to keep pace with rapid urbanization, the number of informal settlements and informal settler families (ISFs)2 have grown especially in Metro Manila, widening and deepening urban poverty. While it is difficult to capture the accurate number of ISFs, the estimates range from over 250,0003 to approximately 600,0004 in Metro Manila alone.

The upper estimate of 600,000 ISFs or 3 million informal settlers translates to about one out of every four people in Metro Manila residing in informal settlements with no security of tenure. As the number of ISFs grows, the absolute number of poor families also increases, causing “urbanization of poverty.”  The issue of ISFs is a manifestation of the grave challenge the Philippines faces to achieve inclusive growth. They suffer from lack of security of tenure, access to basic services, and access to productive formal jobs. They struggle with chronic poverty, poor living conditions, and high exposure to natural disasters, especially flooding. They are seldom integrated into the broader communities and face higher incidence of crime and violence. Philippines cannot achieve inclusive growth without addressing the precarious situation of ISFs and providing solutions to lift them out of poverty.