On Housing Backlog
Prof. Augusto B. Agosto1
Housing backlog becomes a national issue once again following the tirade of President Duterte
on Sen. Manny Pacquiao’s housing program. Duterte touted it as a dream that will never come
true. However, the Filipino people can benefit from this “political rift” by advancing the demand
for a solution to the housing problem.
In a nutshell, housing backlog and prices are just a reflection of the policies and programs of the
government. There is a constant demand for affordable and decent housing while housing
prices continue to escalate since 2016. Meanwhile, the budget allocation and housing
production for residential projects continue to be insufficient.
Rising Demand
Based on the latest household and census of population conducted by the Philippine Statistics
Authority in 2015, there is an increasing demand for housing. Out of the 23 Million total
households in the country, 12.7 million declared that they did not own the house and lot where
they live. Furthermore, 4.9Million households stated that they own a place on a rent-free lot,
but with the owner's consent; Lastly, 0.5 Million occupies houses and lots without rent and
owner's consent.
The government projected that the housing requirement of the country to reach over 6.8
Million units by 2022. This requirement includes accumulated needs for housing totaling 1.3
Million units at the start of 2016. In addition, the Duterte Administration targeted 1.4 million
units to prioritize homeless Filipinos, informal settlers, and those categorized as double-up
households.
Projected Housing Demand, CY 2017-2022
Backlog
2017-2022 TOTAL
Components of (2016)
Housing Needs
(In Thousand Units)
Accumulated
1,293.2 141.3 1434.5
Needs
Household in
Unacceptable 779.8 85.2 885.0
Housing
Doubled-up
Household in 493.4 56.1 549.5
Acceptable Housing
1
Augusto B. Agosto is a convenor of the Center for Housing Studies. He is a faculty of the University of San Carlos
and Housing Specialist/Consultant of the Asian Development Bank. Also, he conducted researches and lectures on
housing policies and urban development.
Recurrent Needs 724.7 808.9 5,362.4
Allowance for
Inventory losses 361.1 399.8 2,660
Increase in
Households 363.6 409.1 2,701.5
Total Housing
2,017.9 4,779.0 6,796.9
Demands
Source: HUDCC
Unabated Price Increases
According to the Bangko Sentral ng Pilipinas (BSP), on a quarter-to-quarter basis, house prices
increases by 134 % from its base quarter of 2014. Based on the same source, the country
experienced the first slump in the second quarter of 2020, since BSP started monitoring the
housing price. However, it slightly recovered in the fourth quarter of the same year by 2.4
percent on a quarter-to-quarter basis. Housing price was primarily due to the increasing
demand for housing outside of Metro Manila.
House pricing in the National Capital Region (NCR) is higher than outside of NCR. An average of
133.2% increase for the National Capital Region, while outside NCR is 117% from the base
figure of 2014. According to the type of unit, condominium consistently has the highest housing
price; however, it was overtaken by the duplex unit during the fourth quarter of 2020. Outside
NCR, townhouse unit dominates the market with house price that go as high as 200 % in the
fourth quarter of 2020. This market dominates the housing price in the country during the
pandemic.
Residential Real Estate Price Index, 2016-2020
Residential Real Estate Price Index
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Source: Bangko Sentral ng Pilipinas
Miniscule budget share of the housing sector
The record of the Duterte Administration can view in the budget allotment for housing and community
development services which remained below one percent of the country's total public expenditures.
From 2016-2020, the average budget share of the housing sector is only 0.18 percent. We can notice in
the table below the government allocated budget that an increase in 2019 and 2020 when the
government gave Php 14.0 billion and Php 26.0 billion, respectively. However, in 2021, the funding of
the housing sector decreased to 0.16 percent of the total public expenditure.
Housing Sector Share to Public Expenditures
Year Amount (In PhP % Share
Million)
2021 8,047.1 .16
2020 25,958.9 .50
2019 14,002.6 .36
2018 694.0 .02
2017 897.2 .02
2016 1,029.7 .02
Source: Department of Budget and Management
Policy recommendations:
The housing problem is a complex one. However, as shown by the experiences of other
countries and the prognosis provided by many scholars, it can solve. As an initial step, we need
to review the different policies and programs outlined in the existing laws, such as the RA 7279,
Local Government Code, Balanced Housing Program, and the Department of Housing and the
BALAI program Development.
1. Reaffirm the balanced housing program. The government should stop allowing
developers to implement compliance projects in far-flung areas. Instead, provide more
incentives for the developers to encourage compliance within the city.
2. Strengthen the capacity of the local government in providing socialized housing and foster
greater coordination with DHSUD, NHA, NGOs, and other agencies in the monitoring of the
compliance to the balanced housing development.
3. Local government should pursue formulating a comprehensive land-use plan and identify
suitable land for socialized housing. Furthermore, they should be at the forefront in forging
collaboration and cooperation with the developers in providing socialized housing to the people.
4. Pursue urban and rural development. The continued growth of housing backlog in the cities
was aggravated by migration and poverty in rural areas. It is therefore essential for the
government to provide jobs and livelihood in rural areas.
5. The government should monitor various macroeconomic variables such as gross
domestic product, exchange rate, inflation rate, interest rate, and employment rate to stabilize
housing prices.
