The Philippine Housing Demand

politics, lack of budget and even mismanagement within the government-controlled entities, while the recession of 1983, the power crisis towards late 1980 to early 1990’s, the Asian financial crisis of 1997 and the 2008 global financial crisis set back the momentum of the government programs (resulting into high default incidents among borrowers and soured loans to developers). On the NHA-side, which deals with the direct production of housing starts for the unserved and under-served segments, there was no sufficient budget allocated for its use. Over-all, the government has allocated less than 1% of its annual budget from 1983 to 2019 for direct funding or subsidy to housing. (Habitat for Humanity)

The housing backlog persists. Between the period 2001 to 2018, the shortage was estimated at close to 6 million units and by then, the demand for homeownership was estimated at Php15 million already to this year (2022). The deficit is mostly evident in the socialized (Php480K-Php750K), economic (Php750K to Php 1.75 M) and low-cost (Php1.75M to Php3M) segments, while there appear to be a surplus in the mid-cost (Php3M to Php6M) and high-end segments (Php6 M and above). This does not even include the un-served and under-served segment (called the owner driven construction or self-help). The average production between the years 2014 to 2018 was around 230K to 240K and at this rate, it will take 24 years to cover the 2018 estimated backlog excluding the unserved market. (Habitat for Humanity).

If we are to overcome this challenge, obviously, the production of housing starts should more than triple and even more. More obviously, the government should focus on encouraging production of housing starts for the lower segment of the market, namely socialized, economic and low-cost where the deficit is, and greater budgetary allocation to NHA for the unserved market. Government incentives, funding and subsidies should be targeted where the deficit is significant. The use of modern technology is also a critical element so we can accelerate the timeline of construction and development, and improve quality to ensure safety of residents against the danger of the environment, while the enactment of the National Land Use Plan will lend a more scientific, pinpointing of zones appropriate and suitable for housing development.