Two of the country’s largest socialized housing groups urged the Housing and Urban Development Coordinating Council and the National Economic and Development Authority to increase the price ceiling for socialized housing to P533,333 from P480,000.
The Organization of Socialized and Economic Housing Developers of the Philippines and the Socialized Housing Alliance Roundtable Endeavour said in a statement the proposed increase in the ceiling price for socialized housing projects took into account higher land prices and the cost of labor and construction materials.
The HUDCC Council approved a new housing ceiling of P480,000 on April 27, 2018 from P450,000, but also increased the minimum floor area to 24 square meters from 18 sq. m., thus negating the price adjustments.
OSHDP president Jefferson Bongat said the current low price ceiling had dampened the enthusiasm for new production as shown by the anticipated decline in the licenses to sell issued by HLURB
“Such situation is untenable considering that the government budget has been slashed to only around P4.7 billion in 2018 from a high of P33.4 billion in 2016, and it is the private sector, which is expected to take the slack,” Bongat said.
SHARE president Marcelino Mendoza noted that prices of raw land had increased by more than 15 percent, while the minimum wage had been raised to P573 or 49 percent in Metro Manila.
Socialized housing companies must also contend with increased competition for both skilled and unskilled labor from the “Build Build Build” Program of the government, as well as the usual higher wages demanded by Filipinos working abroad.
The most recent construction materials price index in the third quarter of 2018, meanwhile, stood at 252.83, up by 18.86 points from 233.97 recorded in the same quarter in 2017.
Mendoza said an increased housing ceiling would enable more borrowers to avail of the “socialized 3 percent rate of interest” by the Pag-IBIG Fund.