This report is about the housing situation in Manila, capital of the Philippines. 25% of the inhabitants in this mega city live in informal settlements, often on places unsuitable for living. The target area of this paper is Baseco, a large slum area near the outlet of Pasig River and home to 47 000 people according to the 2002 census. Among its many problems including overpopulation and poverty it also has a low load bearing capacity, making it even more difficult to develop. In 2004 the area was struck by a devastating fire, rendering thousands of people homeless. The local government of Manila engaged two NGOs to solve the housing situation, Gawad Kalinga (GK) and Habitat for Humanity (HFH). They have presently built 4000 adequate houses in the area. In this report, we have identified the similarities and differences between the two housing-solutions. We have conducted interviews with involved architects and engineers and spent time in Baseco, making observations and interviewing the residents. In addition to the fieldwork we have been studying published sources for more in depth background knowledge. The main objective is that this study will benefit further development in Baseco and other underprivileged areas. Our first impression of Baseco was positive. Despite the limited budget the area has come a long way from the original slum. The houses are colorful and the environment in pleasant. Both housing solutions are row houses with eight houses in each row. They are easy to construct for unskilled workers. Both HFH and GK uses “sweat-equity”, which means that instead of paying an ordinary mortgage, people have to work a number of hours on the site. Among the difficulties we identified is the lack of space and poor indoor climate. The ordinary houses are between 20 m² and 24 m² and too small to accommodate the often large families. Most of the residents have gradually put up inner walls and loft to split the house in to smaller rooms which has left the house with poor ventilation possibilities. We have had all mentioned advantages and problems in mind while we designed two new houses that are suitable for Baseco. One house, Villa Eva, is a row-house with a square shaped ground area of 25 m² and a loft. The kitchen is placed on the outside, but under a roof and with protection from three surrounding walls. The other house, Villa Maria, is a two store duplex house with a living area of 49 m² and space for commercial activity. This would be a more expensive solution though. However, in 20 years, with the existing population growth, the population of Baseco will almost double. Since expanding vertically will be very expensive due to the soft soil, the area will not be able to house everyone and more long term planning is required.