The Major Reason Why Filipinos Cannot Buy A House and Lot

Major Reasons Why Filipinos Cannot Buy a House and Lot

1. Low Income Levels and Wage Stagnation
   • What It Means: Many Filipinos earn wages that barely cover basic necessities, leaving little to no room for savings. With minimum wage in many regions below the living wage, purchasing a house becomes unattainable.
   • Why It Matters: Housing prices often outpace income growth, making homeownership a distant dream for many, especially those in entry-level or informal jobs.
   • Results: Families may live in rented homes indefinitely, or worse, settle in informal settlements with poor living conditions.
   • Example: A minimum-wage earner in Metro Manila makes about PHP 610 per day, but a modest house and lot in the city can cost PHP 3-5 million. Saving for a down payment alone could take decades.
2. High Real Estate Costs
   • What It Means: The cost of land and property in the Philippines, particularly in urban areas, has risen significantly due to demand, urbanization, and speculative real estate practices.
   • Why It Matters: This creates a disparity where the majority cannot afford housing in areas with job opportunities, forcing them to rent or live far from workplaces.
   • Results: Urban sprawl and long commutes. Additionally, people are pushed to settle in less secure and overcrowded areas.
   • Example: A 50-square-meter property in Makati City may cost PHP 10 million or more—beyond the reach of most Filipinos.
3. Lack of Access to Affordable Financing
   • What It Means: Many Filipinos lack access to affordable loans due to stringent requirements like high credit scores or stable employment records, which exclude informal workers.
   • Why It Matters: Without affordable loans, the prospect of buying a home is pushed further out of reach, as most cannot pay in cash.
   • Results: Dependence on rent-to-own schemes or high-interest private lending, which can lead to financial strain or foreclosure.
   • Example: A young couple with a combined monthly income of PHP 30,000 might struggle to qualify for a home loan due to lack of collateral or a consistent credit history.
4. Rising Costs of Living
   • What It Means: Inflation increases the cost of essentials like food, transportation, and education, reducing disposable income that could be saved for housing.
   • Why It Matters: When daily expenses eat into potential savings, achieving financial goals like homeownership becomes almost impossible.
   • Results: Families prioritize immediate needs over long-term investments like property ownership.
   • Example: The price of rice, a staple food, surged in 2023, taking a larger share of the household budget and delaying plans to save for a house.
5. Lack of Substantial Housing Program for Low-Income Earners
   
   What It Means: Housing programs in the Philippines are often inadequate or poorly implemented, with many focusing on middle-class housing rather than addressing the needs of low-income families. Programs for the poor often suffer from lack of funding, poor execution, or subpar housing quality.
   
   Why It Matters: Low-income earners represent a significant portion of the population, and without affordable housing solutions, they are left to rely on informal settlements or precarious living arrangements. This perpetuates poverty and inequality.
   
   Results: Millions of Filipinos remain unable to own homes and are forced to rent substandard housing, squat on land, or endure unsafe and overcrowded conditions.
   
   Example: While the National Housing Authority (NHA) offers low-cost housing, the units are often located far from employment hubs, making them impractical for daily life. A factory worker in Metro Manila might be unable to commute from a government-provided housing project in Cavite due to high transportation costs and long travel times.
6. Unstable Employment and Job Insecurity
   • What It Means: Many Filipinos face irregular income due to contractual jobs, freelancing, or unemployment, making long-term financial planning difficult.
   • Why It Matters: Home loans require consistent income to ensure payments are made, making those with unstable jobs ineligible.
   • Results: Families are forced to delay or abandon plans to own a home due to financial uncertainty.
   • Example: A jeepney driver earning PHP 500 a day cannot guarantee consistent monthly payments for a housing loan.
7. Cultural Priorities and Family Obligations
   • What It Means: Filipino culture emphasizes supporting extended family, with many breadwinners financially assisting relatives instead of saving for themselves.
   • Why It Matters: This altruistic practice can divert resources that might have gone toward purchasing a home.
   • Results: Generational renting and reliance on shared family homes.
   • Example: A young professional might delay homeownership to fund a sibling’s education or support aging parents.
8. Limited Financial Literacy
   • What It Means: Many Filipinos lack education in personal finance, leading to poor budgeting, spending beyond means, or neglecting investment opportunities.
   • Why It Matters: Without financial planning skills, saving for large purchases like a house becomes more challenging.
   • Results: Missed opportunities for wealth accumulation and dependence on payday loans or high-interest credit.
   • Example: An individual may opt for a new smartphone on installment instead of contributing to a home savings fund.

By addressing these interconnected issues, stakeholders can create a more inclusive environment for Filipinos to achieve homeownership.