Socialized housing remains unaffordable despite expanded 4PH program — study

Poor Filipinos will likely remain unable to afford housing even under the government’s expanded flagship program due to low wages and the lack of job security, according to a research paper published by the University of the Philippines Center for Integrative and Development Studies. 

“While the Expanded 4PH provides diverse housing options, it may still fall short in improving affordability and accessibility for the poorest and is unlikely to address broader structural barriers without broader structural reforms,” according to the study authored by Rafael Vicente V. Dimalanta, Vincent Eugenio, Abigail Roa, and Jay-R Panagsagan.

“The diversification of modalities has yet to resolve the core accessibility and affordability challenges of social housing for the poorest, shaped by broader structural issues such as low wages, precarious work, and weak land governance,” it said.

The study estimated that it would cost a total of PHP 8,324.06 monthly to avail oneself of a housing unit under the expanded Pambansang Pabahay Para sa Pilipino (4PH) Program.

This comes as a mid-range high-rise unit under the 4PH Program that costs PHP 1.5 million will require a monthly amortization of PHP 6,324.06 for the first 10 years, according to government data. The researchers said a 4PH beneficiary may incur further additional expenses related to high-rise living, such as maintenance and operational fees, which could amount to PHP 2,000.

Citing data from the Philippine Statistics Authority, the study noted that Filipino households belonging to the bottom 30% of income deciles — the “primary beneficiaries” of 4PH — earn monthly incomes of only PHP 11,940. (first decile), PHP 15,217.50 (second decile), and PHP 17,369.17 (third decile), respectively.

“Based on these figures, the housing payment for a mid-priced Expanded 4PH vertical unit would consume 59.35% of total household expenditures for the bottom 10% income earners, 49.06% for the bottom 20%, and 43.99% for the bottom 30%,” according to the study.

Many of these poor households work in the informal economy, receiving low or irregular wages while working under a short-term or contractual tenure.

The bottom 30% segment is also linked to informal settler families who cannot afford to enter the formal housing market, it added.

“Given the income and expenditure profiles of the poorest households in the lowest 30% income deciles, it is evident that the combined costs associated with the Expanded 4PH significantly exceed the financial capacity of the program’s priority beneficiaries,” according to the researchers.

Launched in 2022, the 4PH seeks to end the country’s housing backlog by building six million housing units by 2028. However, only 1,900 units have been completed under the program since its launch, Human Settlements and Urban Development Secretary Jose Ramon P. Aliling told congressmen on Monday.

The government has kept a “manageable” goal of building 300,000 houses by 2028, Mr. Aliling said, but noted that it cannot hit the target if the 4PH program itself is not strengthened.

To better support beneficiaries, the expanded 4PH program allowed both vertical and horizontal or subdivision-type housing options.

It also included rental and incremental housing to consider beneficiaries’ financial situation and revived the community mortgage financing program by the Social Housing Finance Corp.

To become a 4PH beneficiary, an individual must be a member of the Home Development Mutual Fund or Pag-IBIG Fund.

However, the study noted that this poses a barrier, especially for informal workers with stagnant and low wages.

“The program’s financing structure and restrictive criteria thus reinforce exclusion undermining its stated goal of prioritizing the poorest who are most in need of housing,” the researchers said.

The study recommended aligning the program’s socialized housing amortization and rent with the financial capacity of the poorest households to ensure that their basic needs are not compromised.

It also cited the need to increase the government’s housing budget and lessen its dependence on the private sector in constructing 4PH units to make them more affordable to poor beneficiaries.

The government must also make its eligibility criteria more flexible for irregular or informal workers, ensure the participation of urban poor groups in planning and implementation processes, and address bureaucratic delays, it said.

“These recommendations should be complemented by strengthened land governance to control speculation and the rapid escalation of land prices, which significantly hinders the government’s ability to make land available for social housing, and eventually undermines the affordability of land for social housing for the poorest.” — Beatriz Marie D. Cruz, Reporter