Philippine Property Market: Pag-IBIG Eases Financing as Rate Hikes Loom
Subsidized housing loans expand even as analysts expect the BSP to keep raising rates
Written by PropVela Editorial TeamPublished 2 min read
Today's roundup looks at how policymakers and analysts are responding to a property market squeezed by high borrowing costs and oversupply.
Pag-IBIG expands subsidized financing as market slumps
State housing agency Pag-IBIG Fund is rolling out wider loan subsidies and promotional interest rates to revive flagging buyer demand, as the residential sector faces a downturn that could last until late 2027. Persistent inflation, high interest rates, and costlier construction materials have squeezed household budgets, while Metro Manila and nearby hubs remain saddled with a glut of unsold condo units built faster than buyers could absorb them. A record-low peso against the dollar has only added to the strain on the sector. According to BusinessMirror, the agency's move is a direct attempt to counteract these headwinds.
Deutsche Bank sees fourth consecutive BSP rate hike
Deutsche Bank Research expects the Bangko Sentral ng Pilipinas to hike its policy rate for a fourth straight time, pushing it from 5 percent to 5.25 percent. The bank's call comes as Brent crude has stayed above $100 a barrel through October, nearing $110 amid Middle East tensions, fueling inflation worries. Deutsche Bank suggested current policy settings may still be too loose to properly rein in inflation expectations. According to Manila Bulletin, higher borrowing costs stemming from this stance continue to weigh on home loan demand.
BSP seen keeping hawkish stance
Nomura expects the BSP to remain among the region's more hawkish central banks, alongside Bank Negara Malaysia, as inflation risks build the case for additional tightening, unlike comparatively dovish counterparts in Indonesia and Thailand. The investment bank anticipates the BSP will keep signaling vigilance and a firm focus on anchoring inflation expectations. Such a prolonged hawkish posture implies borrowing costs may stay elevated for longer, complicating any near-term recovery in home buying. According to Manila Times, this regional comparison underscores the Philippines' tighter policy trajectory versus its neighbors.