The government has embarked on a landmark initiative to expand the Expanded 4PH Program and reach more Filipinos by introducing economic and open-market housing, in a determined effort to end the shelter backlog.
The Department of Human Settlements and Urban Development (DHSUD) is considering rates that would be practically half of that offered by commercial banks for housing units targeting the middle class.
Property think tank Colliers recently issued a report validating the “affordable housing boom” attributed to the DHSUD program.
DHSUD Secretary Jose Ramon Aliling said broadening the flagship Pambansang Pabahay para sa Pilipino Program (4PH) beyond socialized housing into economic and open-market segments, offering subsidized interest rates and higher loan ceilings, would chip away at a housing backlog now estimated at 2.2-million units.
In a Daily Tribune roundtable discussion, Aliling said the expansion of the shelter thrust is driven by the objective of drawing more Filipinos into formal homeownership through affordable financing, while simultaneously helping developers clear a glut of unsold inventory that has weighed on the property sector.
Open-market draws opportunities
Under the expanded framework, the 4PH program will be restructured under three tiers.
Socialized housing will cover units priced under P1.8 million, while economic housing will extend the ceiling from its current P2.5 million to either P3.6 million or P3.8 million, pending final agreement with the Board of Investments and the Department of Trade and Industry.
A fixed interest rate far below bank rates is being planned for economic housing buyers, subject to approval by the Pag-IBIG or Home Development Mutual Fund board.
A third tier covering open-market housing will push the ceiling to nearly double the previous P6-million cap at a proposed concessional fixed rate for the first three years.
“What we did with socialized housing we are now trying to replicate for economic housing because it has already been proven effective,” Aliling said.
“You stimulate the demand side through financing and then economic housing begins to move,” he said.
Strategy validated
The DHSUD’s approach has drawn independent validation from Colliers Philippines, whose research director, Joey Roi Bondoc, said the 4PH program is now “at the center of the real estate market,” having triggered what the property consultancy described as an “affordable housing boom.”
Speaking at the Q1 2026 Philippine Property Market Briefing in Taguig City, Bondoc noted that affordable and economic housing segments have overtaken the traditionally dominant mid-income market in Metro Manila’s pre-selling condominium sector for the first quarter.
He said the housing market is increasingly being shaped by government intervention rather than purely by market forces, citing the 4PH as the principal catalyst.
Bondoc characterized the government’s strategy as Keynesian, using public spending and incentive structures to generate demand that the private sector then follows.
“4PH is doing wonders,” he said, particularly in spurring condominium demand among low income and urban poor buyers.
Aliling noted the significance of the endorsement coming from outside government.
“What is good about the Colliers report is that it did not come from us. It came from an independent source,” he said.
Inventory put to good use
The expansion to open-market housing is also a deliberate response to excess inventory clogging the property pipeline.
According to Colliers, affordable and economic units alone account for 42 percent of unsold ready-for-occupancy (RFO) condominium inventory in Metro Manila, rising to over 80 percent when combined with the lower mid-income segment.
The 4PH program has already begun to make a dent, as total unsold RFO units in Metro Manila declined from 29,400 to 27,900. At the same time, the estimated absorption period, or the time needed to clear existing inventory, has shortened from more than 13 years to roughly 7.7 years.
Private developers have also adopted more aggressive sales strategies since the latter half of 2025, including flexible lease-to-own arrangements, rental-to-purchase schemes spanning up to 120 months, and incentives such as free parking slots.
The DHSUD’s revised open-market ceiling targets have prompted developers to offer discounts of 30 to 40 percent, reportedly.
Aliling said the government is in active negotiations with developers to bring prices in line with the new ceiling, urging the industry to lower costs in exchange for the regulatory adjustment.
“Meet us halfway,” Aliling said. “We are increasing the ceiling, and you reduce your prices.”
Local government units are also stepping up their participation alongside private developers.