In response to a request from the Subdivision and Housing Developers Association (SHDA), the National Economic and Development Authority (NEDA) and the Department of Human Settlements and Urban Development (DHSUD) have approved new guarantee ceilings for low- and medium-cost housing packages. This adjustment, formalized through Joint Memorandum Circular No. 2024-001, addresses the need to align housing costs with current economic conditions.
SHDA has been actively sending their position to the proper agencies for a review of the ceiling. In their latest request to NEDA on July 22, 2024, for approval from the Philippine Guarantee Corporation (PHILGUARANTEE), NEDA Undersecretary for Policy and Planning, Dr. Rosemarie G. Edillon, in a letter addressed to SHDA through its chairman, Ar. Leonardo Dayao Jr., and President Atty. Joy Manaog, stated, “The adjustment was deemed timely and necessary as it accounts for the country’s prevailing economic conditions.” The recommendation, based on NEDA’s price inflation analysis, led to the establishment of new guarantee ceilings, setting them at PHP 4.9 million for low-cost housing and PHP 6.6 million for medium-cost housing.
“This adjustment is a significant step towards making housing more accessible to Filipino families,” said SHDA Chairman, Ar. Leonardo Dayao Jr. “We are grateful to NEDA and DHSUD for considering our request and understanding the challenges faced by the housing sector.”
SHDA President Atty. Joy Manaog emphasized the importance of this decision, stating, “The revised ceilings will help bridge the gap between rising development costs and the affordability of homes for many Filipinos. This is a positive development for both developers and prospective homeowners.”
The Joint Memorandum Circular No. 2024-001 specifies the following adjustments: Low-Cost Housing ceiling adjusted to PHP 4.9 million, and Medium-Cost Housing ceiling adjusted to PHP 6.6 million. Rising material costs, labor expenses, and overall inflation trends were key factors considered in these adjustments. NEDA’s economic analysis highlighted that these new ceilings would provide a more realistic framework for housing developers and make it easier for potential homeowners to purchase properties within their budget.
Pursuant to their mandate to jointly determine price ceilings for socialized, low-cost, medium-cost, and open housing every two years, the DHSUD and NEDA have set the ceilings as follows: Level 1-A (Socialized) – PHP 300,000 and below; Level 1-B – Above PHP 300,000 to PHP 500,000; Level 2 – Above PHP 500,000 to PHP 1.25 million; Level 3 – Above PHP 1.25 million to PHP 3.0 million; Medium Cost – Above PHP 3.0 million to PHP 4.0 million; and Open Market – Above PHP 4.0 million.
Since its revision in 2007, the price ceilings for socialized and economic housing have been revised several times through various resolutions due to the steadily increasing costs of raw land, development, construction materials, and labor. The most recent revisions before this adjustment were the May 11, 2022, “DHSUD-NEDA Joint Determination for Economic Price Ceiling,” setting the economic guarantee ceiling to PHP 2.5 million, and Joint Memorandum Circular No. 03, Series of 2023 “Adjusting the Price Ceiling for Socialized Subdivision and Condominium Projects” from PHP 580,000 to PHP 850,000.
In November 2023, based on the current Consumer Price Index (CPI), Residential Real Estate Price Index (REPI) of the Bangko Sentral ng Pilipinas, and the minimum wage as parameters for the adjustments, PHILGUARANTEE re-submitted an adjusted proposal of PHP 4.99 million and PHP 6.65 million for low-cost and medium-cost housing, respectively.
The new guarantee ceilings are expected to benefit many prospective homeowners, making it easier for them to achieve their dream of owning a home in these challenging economic times.
