Slow license approvals hamper projects, limit housing supply

CEBU, Philippines — Delays in the issuance of Licenses to Sell (LTS) by the Department of Human Settlements and Urban Development (DHSUD) are emerging as a growing headwind for the Philippine property sector, limiting new project launches, constraining housing supply and potentially driving up prices, according to Colliers Philippines.

Joey Roi Bondoc, head of research at Colliers Philippines, said prolonged processing of LTS applications has become one of the industry’s most pressing regulatory challenges, as developers cannot legally market residential projects without securing the permit from DHSUD.

“The LTS issue would be a major concern,” Bondoc said, noting that the delays affect both developers planning new investments and buyers looking for more choices in the market.

From an economic standpoint, slower approvals restrict the pipeline of projects entering the market, reducing available inventory even as demand for housing remains resilient.

Basic supply-and-demand dynamics suggest that limited inventory could place further upward pressure on property prices, which are already being pushed higher by rising land values and elevated construction costs, Bondoc said.

“You’re restricting the available supply in the market,” he said. “If you don’t build now, how can you entice potential buyers? The availability of supply is very important.”

The bottleneck also risks dampening investment decisions as developers delay project launches and defer revenue generation while awaiting regulatory clearance. Industry executives have warned that prolonged approval timelines tie up capital and slow the pace of residential development at a time when the government is seeking to narrow the country’s housing backlog.

Presenting Colliers Philippines’ inaugural Visayas-Mindanao property market report, Bondoc said accelerating residential project launches is essential to preventing supply constraints, noting that a deeper inventory of housing benefits both developers and buyers by expanding options across different price points and geographic markets.

“We need to launch more projects and approve more Licenses to Sell because more options in the market will benefit both developers and buyers,” he said. “It’s a win-win for the market.”

The implications extend beyond the residential segment. Bondoc pointed to the office market, where the availability of quality space has become a key determinant of investment activity.

He cited Iloilo’s office sector, which surpassed Cebu in office transactions during the first quarter of 2026, attributing the performance largely to the availability of high-quality office developments.

“If you don’t offer more options to the market, buyers and investors will only see what’s currently available,” he said. “You’re limiting their choices and ultimately limiting their propensity to invest.”

Beyond expediting LTS approvals, Bondoc said policymakers should also prioritize the proposed National Land Use Act, which seeks to establish a comprehensive framework for land classification and development.

The measure would provide greater regulatory certainty by clearly identifying areas designated for residential, industrial and agricultural use, reducing conflicts over land conversion while giving developers and investors a more predictable environment for long-term planning.

For the property industry, faster regulatory approvals and clearer land-use policies could help unlock new investments, accelerate housing production and support one of the country’s largest generators of jobs, capital spending and economic activity, he said. — (FREEMAN)