MANILA, Philippines — The Home Development Mutual Fund or Pag-IBIG Fund said it would expand home loan subsidies to revive buyer demand amid a slump in the residential property sector, which is expected to persist until late 2027.
Pag-IBIG Fund CEO Marilene Acosta attributed the decline to high inflation, elevated interest rates, soaring material costs, as well as an acute oversupply condominium units in Metro Manila and nearby commercial hubs.
Combined residential pre-sales at Ayala Land, Inc., SM Prime Holdings, Inc., Robinsons Land Corp., and Megaworld Corp. dropped 7 percent year-on-year in the first half of 2026, according to assessments by S&P Global Ratings.
S&P corporate ratings analyst Johann Tan said that pre-sales—a key leading indicator of long-term property revenue—continue to mirror widespread consumer hesitation and persistent economic friction.
He said the prevailing macroeconomic headwinds will take considerable time to ease, keeping the outlook subdued for the broader residential sector and pushing any meaningful recovery to the second half of 2027.
In response to sluggish market turnover,Acosta said Pag-IBIG unveiled a financing package at the National Housing Expo 2026 on Monday.
During the event, 80 property developers showcased 50,000 ready-for-occupancy units. Acosta said the package offers a subsidized 3 percent annual interest rate for minimum-wage and low-income earners purchasing socialized housing units.
Pag-IBIG introduced promotional mortgage tiers with fixed rates of 4.5 percent and 5.75 percent for eligible purchases, raising borrowing limits to P10 million to cover a broader range of property categories.
Acosta said that to hasten the disposal of non-performing real estate inventory, Pag-IBIG, an attached agency of the Department of Human Settlements and Urban Development, is offering price reductions of up to 30 percent on selected acquired assets. She said the goal is to make homeownership viable through accessible credit, lower borrowing costs, and personalized assistance.
DHSUD Secretary Jose Ramon Aliling, who chairs Pag-IBIG’s board of trustees, said that the shelter sector has recorded its highest volume of licenses to sell since 2022, swelling unsold inventory across multiple market segments.
To correct this structural imbalance and speed up transactions, Aliling said the housing department is introducing the Enhanced Mortgage Program designed to stretch borrowers' purchasing power and ease upfront financial burdens.
Recognizing that immediate purchase is not feasible for all families, DHSUD is also broadening its framework for structured rental and temporary accommodation schemes, according to the housing czar.
The top DHSUD official emphasized that sustaining stakeholder confidence through transparent, accessible financing remains essential to stabilizing property turnover and steering the sector through its current cyclical trough until a broader economic recovery takes hold.
