PSAC seeks 4-year delay in property valuation reform

MANILA, Philippines — The Private Sector Advisory Council Infrastructure Sector (PSAC-Infra) is pushing to delay the implementation of the Real Property Valuation and Assessment Reform Act (RPVARA) to 2031 amid higher financing and construction costs.

In a statement yesterday, PSAC-Infra said that its recommendations to help manage property costs, expand access to affordable housing and sustain jobs and investments in the real estate sector, were discussed during a Sept. 22 meeting with President Marcos.

Among the council’s recommendations is to move the start of RPVARA’s implementation by four years to 2031.

Signed into law in 2024, RPVARA seeks to standardize real property valuation in the country to ensure that values reflect current market conditions.

PSAC-Infra also pushed for a phased transition that would cap real property tax increases at six percent annually in the first three years.

These recommendations are intended to give property owners and local governments more time to adjust to the new property valuation.

To help address the country’s housing backlog estimated at 3.7 million units, the council also recommended an Urban Housing Affordability Program.

Under the proposal, developers could sell existing higher-priced, ready-for-occupancy condominium units at substantially discounted prices in exchange for incentives or credits toward balanced housing requirements. 

The proposal is expected to enable greater access to urban housing, while moving existing housing inventory.

PSAC-Infra also pushed for the adjustment of socialized housing price ceilings within this year, ahead of the scheduled December 2027 review, amid rising construction costs. 

In addition, it proposed the conduct of further consultations between the government and private sector on other ways for developers to meet balanced housing requirements.

Aboitiz Group president and CEO Sabin Aboitiz, who serves as PSAC lead convenor, emphasized the importance of public-private sector collaboration in addressing challenges of the real estate and housing sector.

He cited the need for policies that consider the impact on Filipino families, jobs and investment.

Ayala Corp. chief social infrastructure officer Paolo Borromeo said the industry is committed to continuing support for the government’s socialized housing program.

“We see a great opportunity to partner with DHSUD  (Department of Human Settlements and Urban Development) and other government agencies in providing more affordable housing for our fellow Filipinos,” he said.

PSAC-Infra made the recommendations as the real estate’s contribution to gross domestic product fell to 5.8 percent in the first quarter compared with the 6.65 percent pre-pandemic average in 2018 and 2019. 

It said slower project launches and construction could affect employment, housing delivery and local government revenues.

Real estate remains an important pillar of the economy.

PSAC-data showed that every P1 spent in the sector generates an estimated P3.44 in economic output and supports the construction, banking, retail, logistics, business process outsourcing and tourism sectors.

Construction alone employs about 4.7 million Filipinos or 9.6 percent of the Philippine workforce.

Also discussed during the meeting was the proposed National Artificial Intelligence Implementation Task Force to respond to AI-related risks and opportunities, particularly for the information technology-business process management workforce. 

PSAC-Infra also noted the government’s lifting of the moratorium on applications for new information technology centers and parks in Metro Manila.

Through the recommendations, PSAC is aiming for a balanced approach for affordable housing, manageable property costs, as well as continued investment and job creation.