Affordable and accessible housing continues to be one of the most persistent challenges facing the Philippines today. The current administration has been pushing initiatives to close the nation’s chronic housing backlog. Anchored by the flagship Pambansang Pabahay Para sa Pilipino (4PH) program, the government has sought to ramp up the production of low-cost and socialized housing units, with early efforts starting in 2022 and ongoing targets extending through 2028.
The housing deficit remains daunting despite the continued efforts. Recent estimates have the country facing a deficit of roughly 6 to 6.5 million housing units, driven by rapid urbanization, limited supply of affordable homes, and persistent demand among low-income families and informal settler communities. If left unaddressed, the backlog is projected to escalate further in the coming decades. This reality underscores the urgent need for concrete policy reforms that not only increase housing supply but also make it easier for developers to participate in delivering affordable housing.
It is within this broader policy context that the Bureau of Internal Revenue’s (BIR) Revenue Memorandum Order (RMO) No. 48-2025 emerged. The RMO streamlines the process for applying for a Certificate of Tax Exemption (CTE) for qualified socialized and economic housing projects covered by the Urban Development and Housing Act (Republic Act (RA) No. 7279), as amended by the Balanced Housing Act (RA No. 10884), and the Omnibus Investments Code (Executive Order No. 226).
The Balanced Housing Act requires registered and accredited developers to allocate a portion of new subdivision projects to socialized housing, thereby promoting inclusivity and affordability within larger developments. This approach aims to encourage investment in affordable housing and enhance accessibility to homes for all income levels. The Balanced Housing Act gives registered and accredited developers of socialized housing projects exemptions from various project-related income taxes and fees, including Value-added Tax, Capital Gains Tax on raw land, transfer tax and donor’s tax for land donated for socialized housing purposes.
Before this new RMO, developers seeking tax incentives were required to submit various documents to support an application for a BIR ruling or exemption confirmation. These included a written request, certified true copies of corporate documents, project details, relevant contracts and certifications, and other supporting documentation deemed necessary by the reviewing BIR office to establish entitlement under the relevant tax laws.
This created parallel compliance tracks. While legally sound, the structure meant that the BIR effectively conducted its own review of eligibility, even after the housing regulator had made its determination.
WHAT CHANGED WITH RMO 48-2025?
At the heart of RMO 48-2025 is a subtle but meaningful adjustment. Developers now need to submit only a Socialized Housing Certification issued by the Department of Human Settlements and Urban Development (DHSUD), the Local Government Unit (LGU) or the Board of Investments (BoI) — along with a written request to apply for a tax exemption. The authority to sign the CTE has been delegated to the Deputy Commissioner of the BIR’s Legal Group. Previously, the BIR still required the submission of other supporting documents to independently evaluate eligibility, despite the Socialized Housing Certification.
This change is rooted in amendments introduced by the law, which clarified that the Socialized Housing Certification alone is enough to confirm eligibility for tax exemptions, removing the need for supplementary clearances previously required.
This aligns with the Joint Memorandum Circular, to which the BIR is a signatory, establishing an electronic Housing One-Stop Processing Center (eHOPC). This platform provides a mechanism capable of generating the documentary requirements needed by the BIR to process CTE applications efficiently.
In practical terms, the alignment of RMO 48-2025 with the Balanced Housing Act means that socialized and economic housing developers can now spend less time on paperwork when pursuing fiscal incentives. This aligns with broader administrative goals of digitalization, standardization, and inter-agency coordination, which can accelerate project deployment and improve investor confidence.
WHY THIS MATTERS
More than a tweak to internal revenue procedures, the changes brought about by the RMO signal a structural adjustment toward enabling faster delivery of affordable homes. Historically, securing a CTE could take months as developers need to obtain several documents from various government agencies before they could file an application. However, with the new streamlined process — where only a Socialized Housing Certification and a written request are needed — the timeline for securing tax incentives is expected to shorten through the eHOPC.
With the simplified procedure for developers, we can expect participation from smaller and larger builders alike to increase and unlock more housing supply. For families planning to buy their first home, these kinds of reforms matter. When developers can move faster without being impeded by procedural hurdles, the ripple effects can touch construction jobs, housing availability, and community stability. Over time, this may help transition the housing sector from a forest of bureaucratic hurdles to a more responsive and efficient delivery system tuned to meet socio-economic needs.
LOOKING AHEAD
The Philippines faces a long road toward truly closing the housing gap. Millions of units are still needed, and challenges like high land costs and income disparities indicate that policy reforms are just part of a larger solution.
These policies show a willingness to listen to industry voices, to simplify processes with the potential for meaningful change. By building on this momentum, the government can work towards making housing a reality for all, not just for a privileged few. I hope that RMO 48-2025 will be in faithful adherence to its intended purpose, ensuring that these reforms effectively translate into tangible benefits for the housing sector. Ultimately, while laws alone can’t solve the housing crisis, they are crucial steps toward ensuring that everyone moves closer to realizing the dream of an affordable home, with a government dedicated to finding long-lasting solutions.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
Lois Ann Caroline Sarajan is an assistant manager at the Tax department of Isla Lipana & Co., the Philippine member firm of the PricewaterhouseCoopers global network.
