SHDA seeks higher price cap for socialized housing

MANILA, Philippines — The Subdivision and Housing Developers Association (SHDA) is pushing for an increase in the price ceiling for housing projects that are eligible for incentives from the Board of Investments (BOI).

In an interview with reporters, SHDA national president Leonardo Dayao Jr. said they have sent a proposal to the BOI last month for the increase in the price ceiling for housing projects eligible for BOI incentives.

“The price ceiling for incentives in terms of housing is P2 million, but we are proposing a much higher price ceiling at around P4.2 million to P4.4 million,” Dayao said.

The 2020 Investment Priorities Plan (IPP), which comprises Tier 1 of the priority activities of the 2022 Strategic Investments Priority Plan (SIPP), covers the development of mass housing units based on a price ceiling of P2 million.

It states that in-city low-cost dwelling projects for lease or rent are also covered,

In addition, for Metro Manila, only in-city low-cost dwelling for lease/rent may qualify for registration.

“The market has shifted already. They were incentivizing affordable housing at that time affordable housing was capped at P1.7 million. But just recently, the affordable housing ceiling was also increased to P2.5 million. So there needs to be a review. That’s also one of the things that we are proposing, the review every three years on the price ceiling,” Dayao said.

In June 2022, the Department of Human Settlements and Urban Development (DHSUD) revised the price ceiling for economic housing from P1.7 million to P2.5 million.

The DSHUD cited that since the last revision of the economic price ceiling in 2015, the costs of raw land and its development, construction materials and labor have steadily and significantly increased, citing various economic indices and data from the Regional Tripartite Wages and Productivity Board.

Apart from a higher price ceiling, SHDA is also proposing the extension of the period for income tax holidays from four years to six years.

Asked for the reason for the longer period for incentives, Dayao explained that developers don’t recognize sales from the first 12 to 18 months of the development of a housing project.

“You’re still doing your land development, you’re still building your houses. So the earliest that you can avail of these incentives is actually 12 months, 18 months depending on payment terms. So that’s one of the things we are trying to address,” he said.

The SHDA is the largest and leading industry association for housing and urban development in the Philippines with 350 members nationwide. SHDA said its member-developers produce over 80 percent of homes produced annually in the country.