Housing sector a boon to the economy
The total value of construction projects authorized in January 2024 amounted to P29.83 billion, down 7.5 percent from P32.25 billion in January 2023. Residential construction accounted for the largest share of the total value at P13.60 billion or 45.6 percent, but it marked a 14.0-percent decline from January 2023.
UNLIKE other countries where there is an oversupply of housing units, the Philippines has plenty of opportunities to further develop our residential market.
With an estimated housing deficit exceeding 6.5 million units, the government, through the Department of Human Settlements and Urban Development (DHSUD), aims to bridge the gap by erecting a million units annually until 2028, requiring substantial investments from both public and private sectors, amounting to at least P1 trillion each year.
Achieving the target would not only address the housing needs of Filipinos—it would also generate millions of jobs, invigorate related industries and infuse wealth into communities, especially in emerging areas beyond Metro Manila.
The anticipated spillover effects include the rise of ancillary amenities, such as commercial establishments, markets, educational institutions, religious centers and service hubs. Once homeowners move into their new houses, they purchase furniture, appliances, furnishings and tools. This level of spending cascades to different sectors and contributes to the overall economic growth.
Recognizing the pivotal role of the housing sector in propelling the Philippine economy, President Ferdinand Marcos Jr. launched the “Pambansang Pabahay para sa Pilipino” (4PH) program, aimed at providing residences to underprivileged Filipino families, including those dwelling in apartments.
A 2022 survey by the Philippine Statistics Authority (PSA) shows that only 62.1 percent or three in every five Filipino families owned the house and lot they occupied. The figure was lower in Metro Manila, where only one in two families, or 51.6 percent, were living in homes they owned. Nearly 29 percent of families were renting houses in the National Capital Region.
A separate survey by the PSA showed that as of 2000, there were 28.5 million housing units listed nationwide, with an average of 4.3 individuals occupying each unit. More than half of the housing units were built between 2000 and 2020.
Based on these data, over 14 million units were built in the past two decades, translating into about 700,000 units constructed each year. This proves that the government’s plan to build one million units each year is highly feasible.
However, recent data show a deceleration in building activity in 2024, with newly issued building permits dipping 17.3 percent yearon-year in January.
Per the PSA, the number of newly issued building permits dropped 17.3 percent in January 2024 to 11,433. Homes continued to be the most popular construction project, with over 7,300 permits issued during the month. This represented two-thirds of all permits, but showed a 22-percent drop from a year ago.
The total value of construction projects authorized in January 2024 amounted to P29.83 billion, down 7.5 percent from P32.25 billion in January 2023. Residential construction accounted for the largest share of the total value at P13.60 billion or 45.6 percent, but it marked a 14.0-percent decline from January 2023.
The figures provided by the PSA may underestimate actual construction activities because many families, especially in the provinces, build their houses without permits from local building officials. But it remains imperative to witness an uptick in building permits in the coming months to align with the government’s ambitious target.
The current dry season coupled with easing prices of construction materials present an opportune time to intensify housing construction efforts. Data from the PSA show that the construction materials retail price index (CMRPI) in the National Capital Region moved at a slower pace of 0.6 percent in March 2024, following a 1.1-percent rise in
February 2024.
I just hope that more Filipino families will be able to start building or buying homes this year, with the support of the government and financing institutions.
Per the DHSUD, more than 30 housing projects under the 4PH are in various stages of implementation nationwide, with 195 local government units expressing interest to join the program. PAG-IBIG Fund started processing and releasing loans to contractors of 4PH projects to boost the flagship program of the Marcos administration, while Social Housing Finance Corp. agreed to implement projects in several parts of the country.
To complement 4PH, the DHSUD committed to enhancing land use planning and urban development through its PLANADO (Plan & Do) program, which aims to establish“organized and well-planned settlements.”
The private sector also has a crucial role to play in building homes for Filipino families. Our family business, for example, has built thousands of quality homes in wellplanned communities nationwide.
It is important that we work together with the government and financing institutions to fulfill the dreams of Filipino families in inhabiting sustainable, peaceful and flourishing communities that serve as engines of local economic growth.
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