Safeguards sought to keep homeownership within reach amid rising borrowing costs
The Bangko Sentral ng Pilipinas’ recent 50-basis-point interest rate hike to 5.50% could further push homeownership out of reach for Filipino families, especially as credit terms tighten amid growing risks of stagflation in the country, a lawmaker warned.
Manila, Philippines is facing a potential housing affordability crisis as a 50-basis-point interest rate hike by the Bangko Sentral ng Pilipinas could exacerbate the struggles of Filipino families in securing homeownership, warned lawmaker Rep. JP Padiernos. The central bank's decision to raise the benchmark policy rate to 5.50% is expected to further tighten credit conditions amid growing stagflationary risks, according to Padiernos.
S&P Global Ratings has forecasted a slowdown in GDP growth for 2026, projecting just 2.6% growth in the first half of the year and 2.9% full-year growth, while inflation is expected to average 5.5%. These concerns are compounded by rising food, electricity, fuel, and transportation costs, which have been eroding household purchasing power.
Earlier this year, Colliers Philippines reported a sharp decline in Metro Manila condominium sales, with net take-up dropping to just 500 units in the second quarter of 2026, a 60% decrease from the previous quarter. This shift in buyer behavior towards lower-priced inventory highlights the growing challenge to achieve homeownership in the face of higher borrowing costs.
Padiernos called for targeted housing finance programs to support middle- and lower-income first-time buyers, emphasizing the need for policymakers and financial institutions to maintain affordability amidst ongoing monetary tightening.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
