What are the implications of this increase in loan ceiling?
My first thought was that more developers would be willing to produce units under economic housing since the threshold is now P1.7M. According to this article, the Philippines has a housing backlog of 5.5 million houses, and 60% of the housing needs are for socialized and economic houses.
I found a link to the Philippine Housing Industry Roadmap: 2012-2030 prepared by the Subdivision and Housing Developers Association, Inc. (SHDA) and I was happy to know that developers are working towards filling the backlog.
Aside from responding to the people’s housing needs, the developers will also be earning a handsome sum since socialized and economic housing projects are part of the 2014 Investment Priorities Plan (IPP) activities which may be granted an Income Tax Holiday (ITH) of 3 to 4 years. Considering that the corporate income tax rate is thirty percent (30%), the ITH incentive is significant. No wonder big developers all have their socialized and economic housing brands (like Amaia and Bella Vita for the Ayala Group).
I read the 2014 IPP again though and noted that socialized and economic housing for purposes of the IPP was above P450,000 up to P3M so it appears that the increase in loan ceiling as per HUDCC Resolution No. 2, Series of 2015 has no effect on the ITH.
With regard to construction standards for socialized and economic housing, the same standards under BP 220 will still apply.