THE Marcos administration is halfway toward meeting its recalibrated housing target, but an economist warned that renewed geopolitical tensions in the Middle East could slow the pace of affordable housing construction by driving up building costs.
Data obtained by the BusinessMirror from the Department of Human Settlements and Urban Development (DHSUD) showed the government had produced or financed 575,693 housing units from July 2022 to June 2026.
Of the total, 81,295 units were delivered through direct housing provision, 368,731 were assisted through government financing programs, while 125,667 units were produced under the Expanded Pambansang Pabahay para sa Pilipino (4PH) Program.
The total figure represents almost 51 percent of the administration’s recalibrated target of 1.13 million housing units by the end of President Ferdinand R. Marcos Jr.’s term.
Earlier this year, the DHSUD recalibrated its housing goal for the Marcos administration to 1.13 million housing interventions, consisting of both directly built housing units and indirect forms of housing assistance. The latest target replaced the administration’s earlier goal of addressing 3.2 million housing needs by 2028.
Ateneo de Manila University economist Ser K. Peña-Reyes said the figures indicate progress but warned that several risks over the administration’s remaining two years could slow the construction and turnover of new housing units.
‘Affordable housing projects operate on relatively thin margins and are highly sensitive to cost increases,’ Peña-Reyes told the BusinessMirror.
He said housing projects are particularly vulnerable because construction materials such as cement, steel, copper, aluminum and imported finishing materials account for a significant share of total building costs.
If global commodity prices remain elevated or rise further because of geopolitical tensions, the economist said developers may have to absorb the higher costs, scale back projects, or delay construction.
Data from the Philippine Statistics Authority (PSA) showed that the average cost of construction in May stood at P12,778.68 per square meter, 6.7 percent higher than the P11,974.75 recorded in the same month last year.
Separate PSA data also showed that both wholesale and retail prices of construction materials in Metro Manila have been on an upward trend.
As of June, wholesale prices rose by 2.9 percent, sharply higher than the 0.2 percent increase recorded in the same period last year. Meanwhile, retail prices increased by 1.8 percent, up from 1.1 percent a year earlier.
‘For government housing projects with fixed budgets, cost overruns can mean fewer housing units are ultimately delivered unless additional funding is appropriated,’ Peña-Reyes added.
Aside from pushing building costs, he said a sustained increase in global oil prices due to the Middle East conflict could also ripple across the construction sector by raising transportation costs for building materials, pushing up logistics and distribution expenses, and fueling broader inflation that could keep financing costs elevated.
The economist also said expected minimum wage adjustments across several regions in the coming months could add to the financial pressures facing housing projects.
Higher labor costs, he said, may lengthen construction timelines, including for government-backed housing initiatives, while further increasing project costs.
Peña-Reyes said the government’s biggest challenge in meeting its housing targets is likely not the demand for housing but the combined impact of rising construction costs and implementation bottlenecks.
‘If construction inflation stays moderate, the administration could continue expanding housing output, albeit below its original one-million-units-per-year ambition,’ he said.
‘However, if another major oil price shock or prolonged geopolitical disruption occurs, the government will likely have to either allocate more resources to housing or accept that fewer units can be delivered within the same budget.’