The Marcos administration has expanded housing production and financing since taking office, but economists said the government will need to significantly accelerate housing delivery over the next two years if it hopes to make a meaningful dent in the country’s housing shortage.
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.
The 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.
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.
While the government’s accomplishments point to measurable progress in expanding housing supply and financing, Ateneo de Manila University economist Ser K. Peña-Reyes said the pace remains insufficient to substantially reduce the country’s housing shortage.
‘The housing gap remains very large, and significantly higher annual production, together with faster project completion and stronger private-sector participation, will be needed if the government hopes to substantially reduce the backlog within the next several years,’ Peña-Reyes told this newspaper.
Earlier this year, the Philippine Statistics Authority (PSA) revised the country’s estimated housing need for 2023 to 2028 to 3.7 million housing units, down from the previous estimate of 6.5 million, following the adoption of a new methodology.
Unlike the earlier estimate, the revised methodology distinguishes the country’s housing backlog from its broader housing need. Aside from the existing shortage of homes, the estimate also accounts for projected household formation, housing damaged by disasters, and homes requiring repairs.
Peña-Reyes said the revised estimate should not be interpreted as evidence that the country’s housing problem has dramatically improved.
‘The housing backlog of 3.7 million units through 2028 is an estimate of unmet housing need after accounting for new household formation and other demographic factors, making it a moving target rather than a fixed stock,’ he said.
Based on the government’s reported accomplishments, Peña-Reyes estimated that housing production and financing have averaged roughly 140,000 to 145,000 units annually since July 2022.
While this represents steady progress, he said substantially higher annual output would be needed if the administration hopes to significantly narrow the country’s housing shortage before the end of its term.
Beyond building homes
Even as the government continues to increase housing supply, newly appointed Congress liaison and economist Jose Ma. Clemente ‘Joey’ Salceda said the next phase of the administration’s housing agenda should focus on making homeownership more attainable for Filipino families.
In an online commentary, Salceda said the government has already laid much of the groundwork through the expanded 4PH Program, which now covers not only vertical housing projects but also horizontal developments, lot-only projects, community mortgage arrangements, and rental housing.
‘The first phase of the housing agenda was about producing houses. The next phase should be about producing homebuyers,’ he said.
Salceda said expanding homeownership would allow more Filipino families to build assets and strengthen their long-term financial security.
Salceda proposed simplifying access to housing finance through a unified application system that will cover Pag-IBIG Fund, the Social Security System (SSS), the Government Service Insurance System (GSIS), government financial institutions, and accredited private lenders.
He also proposed allowing lenders to consider broader sources of household income, including earnings from spouses, overseas workers, small businesses, and digital work when evaluating borrowers’ repayment capacity.
Other recommendations include allowing qualified first-time homebuyers to temporarily use their Personal Equity and Retirement Account (PERA) savings for down payments, strengthening the secondary mortgage market, expanding financing for pre-owned homes and housing repairs, and providing targeted support to borrowers who can afford monthly amortizations but lack sufficient funds for a down payment.
‘Projects should be measured not only by the number of units completed, but also by occupancy, repayment, travel time, access to services, and the growth of household assets,’ Salceda also said.
Rising risks
However, sustaining or accelerating housing production and financing may become more difficult as developers and the government contend with rising construction costs and global uncertainties.
DHSUD had earlier acknowledged that higher labor costs and geopolitical developments could eventually affect housing prices, although the agency said it is maintaining its housing targets.
Labor accounts for about 30 percent of total housing development costs, meaning wage increases could eventually push up housing prices.
Yap also said tensions in the Middle East could increase transportation and logistics costs, although the extent of the impact would depend on how developers respond to the situation.
Peña-Reyes said the risks extend beyond labor costs. He said higher prices of cement, steel and other construction materials, coupled with rising wages, could increase housing production costs and delay project implementation.
A prolonged conflict in the Middle East could also push global oil prices higher, increasing transportation, logistics and financing costs across the housing sector.
‘The greatest threat to the government’s housing targets is probably not a lack of demand but the interaction of rising costs and implementation bottlenecks,’ Peña-Reyes said.
To help cushion the impact of higher costs on homebuyers, DHSUD said the Pag-IBIG Fund continues to offer subsidized interest rates of 3 percent for socialized housing loans and 4.5 percent for low-cost and economic housing loans.
The state-run fund has also increased the maximum housing loan amount to P10 million.
The agency added that Filipinos affected by the Middle East crisis may also avail themselves of housing loan moratoriums and calamity loan assistance.
Despite these measures, Peña-Reyes said the outlook remains highly dependent on global developments.
‘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,’ Peña-Reyes said.