Land shortage still a problem for developers

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Despite increasing demand for housing in the Philippines, the shortage of land remains a problem for the private sector, according to the president of a property developers’ group.

Property developers are capable of meeting the demands of the industry and helping decrease the country’s housing backlog, but the problem is land, said Marcelino Mendoza, president of the Organization of Socialized and Economic Housing Developers of the Philippines, Inc. (OSHDP), on the sidelines of The Outlook by Lamudi event at the Marquis Events Place in Taguig City on Wednesday.

The mass housing industry would continue its robust growth on the back of consumer demand, but this also drives the housing backlog, as the industry only produces an average of 230, 000 units a year, according to Mendoza.

“That’s at the most already, in a year. But projected demand is about 800,000 [units], so there goes your housing backlog. So it means that we can’t even catch up on a yearly basis,” he added.


“Of that [housing backlog of]5.7 million [units]or so, they say the [number of]informal settlers would [be]close to 2 million already. So by itself, that’s a big number that the government and private sector would have to contend with,” Mendoza said.

He noted, however, that the government is “really trying” to address this issue.

“The first and second deciles would have to be addressed by public housing. This is the cannot-afford-really segment. However, the private sector can go on the third decile, which is the minimum wage worker, and PAG-IBIG is addressing that,” Mendoza said.

He said, however, that the reduced budget proposal of P4.7 billion for the housing sector in 2018, compared with this year’s P15 billion, is “very small.”

According to him, another concern for the private sector is the higher documentary stamp tax under the Tax Reform for Acceleration and Inclusion (TRAIN) bill.

“[T]he documentary stamp tax was just doubled. That’s big. We are very concerned, because real estate is about transactions, about documentation. This stamp tax is used to cool off demand in housing bubbles. Now it is going to be used to raise revenues. It will have quite a big impact,” Mendoza said.

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