Building better, affordable housing for Filipino families

Access to housing is a basic human right and is crucial for ensuring overall health and economic stability. The advancement of housing is not only vital for providing shelter to people and families but also drives progress of the nation.

According to the 2020 Census of Population and Housing released by the Philippine Statistics Authority, the Philippines had around 28.5 million housing units, with 25.2 millions of these occupied by households.

Approximately one-third of all housing units in the Philippines were built within the last decade. The majority of these housing units are built using durable materials, which is a positive indicator of improved housing quality over the years.

The report also said that 87.6% of occupied housing units are single houses, 6.5% are apartments or row houses, 3% are duplexes, and 0.7% are condominiums.

Despite significant developments, the country continues to struggle with housing affordability and a growing housing backlog.

In fact, the distribution of housing types reflects the unequal access to different forms of housing. While more affluent households can afford condominiums and durable single houses, the poor often resort to less secure and substandard housing in informal settlements.

According to the Department of Human Settlements and Urban Development (DHSUD), the country faced a housing backlog of approximately 6.5 million units from 2017 to 2022. The backlog is most pronounced in urban centers like Metro Manila, where over 13 million people reside, leading to a high concentration of informal settlements and inadequate living conditions.

Particularly, the urban poor are the most vulnerable, with many families living in cramped spaces with limited access to basic services. The lack of affordable land in urban areas has contributed to the proliferation of informal settlements, where households often reside in substandard housing with little to no legal tenure.

Population density and affordability crisis

The Philippines has one of the highest population densities globally, which further exacerbates housing shortages, especially in metropolitan regions. The rapid pace of urbanization has placed immense pressure on land resources, limiting the availability of affordable housing.

In Metro Manila, for instance, the population density often exceeds 20,000 people per square kilometer, making land acquisition for housing projects increasingly difficult.

Moreover, the demand for housing continues to rise as the population grows and urban migration accelerates. The high cost of land and construction materials makes it challenging for developers to meet the demand for affordable housing while maintaining profitability.

In addition, housing affordability remains a significant issue for the majority of Filipinos, particularly for low- and middle-income households. The conventional measure for housing affordability, which suggests spending no more than 30% of income on housing, has been criticized for overestimating affordability among low-income groups. Many low-income families are forced to spend a much higher percentage of their income on rent or mortgages, leaving little for other essential needs such as food, education, and healthcare. In addition, a study by the Philippine Institute for Development Studies shows that more than 50% of households are underserved by both government programs and the private housing market — indicating that a significant portion of the population still struggles to secure adequate housing.

Building solutions for Filipino families

According to the United Nations Human Settlements Programme, also known as UN-Habitat, the housing backlog in the Philippines is expected to rise dramatically from 6.5 million in 2022 to an estimated 22 million by 2040 if current trends continue.

In light of the current housing landscape in the country, the National Shelter Month, observed every October, is more relevant as it offers an opportunity to reflect on the challenges facing millions of Filipinos.

According to the DHSUD, the observance serves as a platform to highlight housing issues while promoting solutions and policies aimed at improving the housing sector. It also calls government agencies, real estate developers, and financial institutions to come together and implement sustainable and inclusive housing strategies.

In response, both the government and the private sector has ramped up efforts to provide more affordable housing, implement urban renewal initiatives, and create housing policies that support the needs of all sectors of society.

For instance, the DHSUD has initiated various programs under the Pambansang Pabahay para sa Pilipino (4PH) program aimed at transforming communities into resilient living spaces.

The 4PH program is providing affordable housing options through various subsidies that lower both home prices and monthly amortization costs. This initiative is particularly beneficial for Filipino workers who are members of Pag-IBIG Fund.

Key features of the program include subsidized interest rates up to 5%, green housing features, and a community-centric approach with essential amenities.

Similarly, Pag-IBIG offers loans at competitive interest rates starting from 4.5%, with repayment terms extending up to 30 years.

In 2023, Pag-IBIG Fund reported a record-high release of P126 billion in home loans, benefiting nearly 97,000 members.

Meanwhile, the National Home Mortgage Finance Corp.  (NHMFC), a government-owned and -controlled corporation, focuses on expanding access to housing finance for low-income families through various initiatives.

The agency’s Housing Loan Receivables Purchase Program (HLRPP) assists families by purchasing their housing loans from developers or financial institutions, thereby providing them with more manageable payment terms.

The Socialized Housing Loan Takeout of Receivables (SHeLTeR), launched in 2016, targets socialized housing developers and aims to make homeownership more accessible for low-income earners.

In a statement, DHSUD Secretary Jose Rizalino L. Acuzar highlighted the importance of collaboration in fulfilling the country’s housing backlogs: “Let us turn these challenges into opportunities toward our shared goal of providing safe, decent yet affordable shelters to Filipinos in sustainable communities patungo sa mas maunlad at mas matatag na Bagong Pilipinas (towards a more developed and stronger New Philippines).” — Mhicole A. Moral