In response to a request from the Subdivision and Housing Developers Association (SHDA), the National Economic and Development Authority and the Department of Human Settlements and Urban Development (DHSUD) have approved new guarantee ceilings for low-and medium-cost housing packages.
The 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 proper agencies for a review of the ceiling.
NEDA undersecretary for Policy and Planning, Rosemarie Edillon, in a letter addressed to SHDA, through its chairman, 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 P4.9 million for low-cost housing, and P6.6 million for medium-cost housing.
“This adjustment is a significant step towards making housing more accessible to Filipino families,” Dayao said. “We are grateful to NEDA and DHSUD for considering our request and understanding the challenges faced by the housing sector.”
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.”
Joint Memorandum Circular (JMC) 2024-001 specifies that low-cost housing ceiling is adjusted to P4.9 million, and P6.6 million for medium-cost housing ceiling, a press release said.
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) – P300,000 and below; Level 1-B – above P300,000 to P500,000; Level 2 – above P500,000 to P1.25 million; Level 3 – above P1.25 million to P3.0 million; Medium Cost – above P3.0 million to P4.0 million; and Open Market – above P4.0 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 P2.5 million, and JMC 03, series of 2023, “Adjusting the Price Ceiling for Socialized Subdivision and Condominium Projects” from P580,000 to P850,000, the press release said.
In November 2023, based on the current Consumer Price Index, Residential Real Estate Price Index of the Bangko Sentral ng Pilipinas, and the minimum wage as parameters for the adjustments, the Philippine Guarantee Corporation re-submitted an adjusted proposal of P4.99 million and P6.65 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. ||
