Global housing finance is facing mounting challenges as sustainability mandates, rising costs and currency risks strain financial markets.

Experts at the Mortgage Market Global Summit 2025 held in El Nido, Palawan warned Thursday that without strategic planning, governments and investors could face unintended financial burdens.

Top industry leaders — including Luca Bertalot, secretary general of the European Mortgage Federation; Kameel Abdul Halim, president of Malaysia’s Cagamas National Mortgage Corporation; and Yuji Date, director general of Japan’s Housing Finance Agency — outlined the delicate balance between financial stability and sustainability.

Halim pointed to Malaysia’s ESG Sukuk as a model for sustainable financing but noted that high certification costs hinder widespread adoption.

“Designing and certifying a green home is more expensive than a normal one,” Halim said.

“The cost of certification, which needs to be renewed periodically, makes it unaffordable for many low-income buyers,” he added.

Japan, meanwhile, is enforcing strict energy efficiency laws, with all new buildings required to meet energy-saving standards by this year.

Date acknowledged the challenges of scaling up production for energy-efficient materials, a concern echoed in the Philippines, where older structures require costly upgrades.

Bertalot, drawing from Europe’s experience, warned that retrofit requirements could overwhelm financial systems if not carefully planned.

“In Europe, 200 million homes need retrofitting. There simply aren’t enough materials, workers, or financial mechanisms to meet the demand,” he said.

The panel also tackled the risks of foreign-denominated bonds in emerging markets.

Bertalot emphasized that currency volatility can derail financing efforts without proper legal frameworks.

“Currency risk isn’t just a threat — it can be an opportunity if managed correctly,” he said.

Halim cautioned against over-reliance on foreign borrowing, while Date pointed to Japan’s struggles with Islamic finance, highlighting the complexities of integrating foreign lending models into local economies.

As global markets transition to greener policies, the experts warned that poor planning could drive up costs, slow adoption, and expose financial systems to heightened risks.

Philippine market

The Philippines’ housing backlog stands at 6.5 million units, projected to reach 22 million by 2040 if left unaddressed, according to the UN-Habitat Philippines Country Report 2023.

Rapid urban migration, climate change, and limited funding have worsened homelessness, overcrowding, and social inequality.

To address this, the government launched the Pambansang Pabahay Para sa Pilipino (4PH) Program, targeting the construction of one million houses per year for six years.

Pag-IBIG Fund also continues to support homeownership through mortgage lending and savings programs.

However, experts argue that merely constructing more homes is not enough — innovative financing mechanisms are crucial to making housing affordable and sustainable.

One key player in this financial evolution is the National Home Mortgage Finance Corporation (NHMFC) which has pioneered securitization to unlock housing liquidity.

Founded in 1977, NHMFC was established to provide affordable housing loans through a secondary mortgage market.

However, several financial crises led to restructuring in 1986 and further reforms in the late 1990s.

In 2004, the government created the Social Housing Finance Corporation to handle low-cost housing programs, allowing NHMFC to focus on securitization.

“Securitization allows financial institutions to recycle capital, reducing reliance on traditional bank lending and broadening investment opportunities,” said Kwok Pin Lim, head of Structured Debt Solutions at DBS Bank.

Lim emphasized that securitization is not just a financing tool — it is transforming how banks and corporations manage risk and raise capital.

Tanzania’s Mortgage Reforms: A Model for Inclusive Housing Finance?

Oscar Mgaya, CEO of Tanzania Mortgage Refinance Company (TMRC), outlined bold reforms to make housing finance more inclusive in emerging economies.

Leveraging benefits

One proposal is to allow pension benefits as down payment — a move that could ease the financial burden and expand mortgage access.

“By leveraging pension benefits, we can lower upfront costs for homebuyers, making homeownership more realistic for millions,” Mgaya said.

TMRC is also exploring housing microfinance refinancing, channeling mortgage funds through microfinance institutions instead of traditional banks.

“A significant portion of our population lacks a formal income,” Mgaya pointed out.

“By refinancing microfinance institutions, we can extend housing finance to those who need it most,” he said.

With strict risk management policies, TMRC has attracted oversubscribed funding rounds at highly competitive rates, proving that well-structured mortgage reforms can unlock new investment opportunities.

Real estate innovation: Turning debt into opportunity

The summit highlighted how strategic synergies are reshaping Asia’s real estate sector, with R-II Builders’ transformation of Manila’s former Smoky Mountain as a prime example.

Through asset-backed securitization, the company financed 3,000 housing units for former scavenger families and developed 79 hectares of reclaimed land into a commercial and industrial hub with its own international port.

This landmark project became the foundation for the Philippines’ Securitization Law of 2004, proving that financial innovation can drive sustainable urban development.

Now, R-II Builders is expanding its model with a waste-to-energy project in Japan, set to power Manila households.

“Synergies in real estate development don’t just solve housing problems — they drive economic progress, environmental sustainability, and social transformation,” said Mark Roy Boado, vice president of R-II Builders Inc.

Financial innovation

As Asia’s mortgage and real estate markets evolve, securitization, covered bonds, and strategic synergies are emerging as the cornerstones of modern housing finance.

Bangko Sentral ng Pilipinas Monetary Board Member Rosalia de Leon highlighted AI-driven platforms and digitalization as game-changers for mortgage lending.

“Technology is profoundly transforming financial markets, making mortgage financing faster, more efficient, and more secure,” De Leon said.

Meanwhile, European financial leaders proposed savings-based homeownership models and covered bond markets as potential long-term solutions for the Philippines.

“Deposits can disappear overnight. Covered bonds provide predictable, long-term funding that doesn’t flee during a crisis,” noted Richard Kemmish, a leading covered bond consultant.

Road ahead

While the momentum for affordable and sustainable housing finance is accelerating, industry leaders stressed the need for careful regulatory planning.

“The most important thing is to start — but start with a plan,” Bertalot concluded.

With securitization, strategic synergies, and innovative financing models, the future of housing finance is being rewritten — one mortgage at a time.