Understanding the housing crisis in the Philippines

Housing in the Philippines is a topic that doesn’t just hit close to home – it IS home. Sadly, it’s a topic also rife with serious issues. As of 2018, there were over 6 million units of housing backlog in our country, a staggering statistic stemming from the twin demons of unaffordable housing and inadequate access to housing funds.
Housing deficit crisis
To better comprehend the gravity of the situation, it’s important to first understand what “socialized housing” means. These are homes priced at a maximum of PhP580,000, an attempt to accommodate those of us who may not have much leeway in our budgets.
But here’s the rub: data from the HLURB, HUDCC, and Center for Research and Communication paint a bleak picture. The demand for housing in the socialized and economic segments outstrips supply, resulting in deficits of over 663,283 and a staggering 1,962,077 units, respectively. The story isn’t much better in the low-cost segment, with a deficit of 462,160. the housing crisis in the Philippines
Market segmentHousing demandHousing supplySurplus (Deficit)
Why the discrepancy? Simply put, it’s business. Developers are more attracted to the mid and high-end market segments, where profits are more lucrative. Low-cost and socialized housing come with thinner margins, making the recovery of costs for essential infrastructure challenging.
Beyond construction: Comprehensive solutions to the housing crisis
Coming to terms with the scale of our housing problem can be daunting, to say the least. However, as a social development worker who has seen these challenges unfold over the past 20 years, I believe that seeking market-based solutions alone won’t cut it. The scale of the problem is so vast that it calls for concerted, strategic efforts from both public and private sectors.
The good news? The government has already taken steps towards bridging the housing gap. With a target of constructing one million new houses every year from 2022 to 2028, the journey towards providing homes for every Filipino family has already begun.
However, this ambition should be complemented with strategic initiatives that go beyond just construction of houses. Government subsidies should be extended towards building essential infrastructure for socialized, economic and low-cost housing, such as roads, drainage systems, and more. This not only aids in the development of the housing units but also ensures that these communities are livable and sustainable in the long run.
Furthermore, incentives should be extended to developers and other market players who are willing to venture into the socialized and low-cost housing market. These incentives could be in the form of tax breaks and less stringent document requirements for subdivision development, encouraging more participation in these crucial market segments.
Lastly, financing subsidies should be extended to first-time homebuyers. For instance, Pag-IBIG has a 3% interest rate for socialized housing. Banks and other financial institutions could also extend this same rate, with the balance compared to the prevailing market rate subsidized by the government. This financial assistance could be the key to unlocking the doors of homeownership for many Filipinos.
Turning dream into reality: A call for coordinated effort
The road to providing homes for every Filipino family is a long one, and fraught with many challenges. But with coordinated efforts from the government, civil society, private sector, and each one of us, we can turn this dream into a reality.  It’s not just about owning a house, but about building a home, a community, and ultimately, a nation.

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