Galing Sa Puso Party-list Representative JP Padiernos is urging the government to implement targeted and accessible housing finance programs to help middle- and lower-income first-time homebuyers navigate prolonged monetary tightening.
Padiernos, a member of the House Committee on Banks and Financial Intermediaries, emphasized that policymakers, housing institutions, and private developers must coordinate to create flexible loan terms and financial assistance aligned with the actual purchasing power of prospective buyers.
These measures should include transparent terms and safeguards to keep monthly amortizations sustainable.
The appeal follows the Bangko Sentral ng Pilipinas’ (BSP) 50-basis-point interest rate hike to 5.5%, a move aimed at curbing inflation that experts warn could further drive homeownership out of reach amid growing stagflation risks.
“For Filipino families, the central question is whether financing and housing options will remain attainable as monetary policy stays tight to combat inflation,” Padiernos said.
“For policymakers and the property sector, the immediate challenge is maintaining financial stability without completely closing the door on affordable homeownership,” he added.
S&P Global Ratings recently reported a sharp slowdown in the country’s first-half 2026 GDP growth to 2.6% and an October inflation surge to a near four-year high of 7.8%.
With full-year GDP growth projected at a modest 2.9% and inflation averaging 5.5%, higher borrowing costs are intensifying pressure on an already struggling residential property market.
“For families planning to buy a house or condominium through a bank loan, the BSP’s rate decision raises serious concerns about affordability, particularly as stagflationary pressures, rising food, electricity, fuel, and transportation costs, continue to erode household purchasing power,” Padiernos noted.
While central bank benchmark rates do not automatically translate to identical immediate jumps in all commercial mortgages, they directly influence banks’ underlying lending costs and repricing schedules.
“The BSP has an important role in maintaining price stability, which is essential to protecting the purchasing power of Filipino families. At the same time, we must examine complementary measures to ensure that higher borrowing costs do not further limit access to affordable housing,” Padiernos said.
“When mortgage rates escalate precisely as basic necessities consume a larger share of disposable income, homeownership becomes vastly more difficult to achieve,” he added.
Real estate pressures were visible prior to the latest rate tightening. Colliers Philippines reported that Metro Manila condominium net take-up plummeted to 500 units in the second quarter of 2026—a 60% quarterly drop. Demand has sharply shifted toward lower-priced inventory, with units priced between ₱1.8 million and ₱3.6 million capturing 67% of total net take-up in the first half of the year.
In response, Colliers has advised developers to offer more flexible payment schemes, particularly for properties valued between ₱2.5 million and ₱12 million.