At the 33rd National Developers Convention, Dr. Marife Ballesteros, vice president of the Philippine Institute for Development Studies (PIDS), discussed the impact of demographic changes on the housing sector in the Philippines and provided policy recommendations.

In her presentation, Dr. Ballesteros underscored that “while the Philippines is still in the early stages of demographic transition, consideration of demographic effects on housing is fundamental in recalibrating or reimagining a new housing policy approach for the country.”

Dr. Ballesteros reported that the country is experiencing a steady population increase and demographic shifts. From 38.68 million in 1970, the population grew to 108.67 in 2020. She also noted a significant change in the age structure of the population. “From a wide base in the 1970s and 1980s, we observed a tapering of the base and declining birth rates. This trend has increased the number of the elderly by 8 percent in 2020. By 2040, we would have become an aging society, with at least 10 percent of the population being elderly.” Moreover, she noted that the total fertility rate declined from 6 percent in 1970 to less than 2 percent in 2020, resulting in a decrease in average household size.

“Migration affects the growth, distribution, and structure of a population,” said Dr. Ballesteros. She shared that the country’s rapid urbanization trend continues, with working-age populations migrating from rural to urban areas. In 2020, NCR remained favored by adults aged 20–40, while younger groups of 15–19 years of age showed a wider urbanization spread. While reverse migration of the elderly has been observed, its impact is not yet evident.

“These demographic shifts directly influence household formation, which in turn affects housing demand and supply. Economic conditions, culture, social factors, and lifestyle also play a role,” added Dr. Ballesteros.

In 2020, data indicated a slowdown in the formation of new households. Young adults, from 25 to 34 years of age, are delaying marriages and childbearing and staying longer with their root families. Extended households are now prevalent, with most young adults living in extended/multifamily households, primarily as non-houseowners.

With the decline in nuclear households, there has been a rise in extended/multifamily households, which tend to have fewer dependent members.

In comparison, 82 percent of households were composed of nuclear families and householders in the 1990s, whereas younger households in the 1980s often supported children and the elderly.

Homeownership is highest among extended/multifamily households, particularly those with higher incomes. The demand for homeownership surges around age 40, indicating a higher earning capacity among mature householders.

Rental housing is an acceptable choice for younger householders with limited incomes, while affordable rental housing is suitable for households of all ages, with an estimated rent ceiling of P3,000 to P3,400 per month.

Although the average family size has declined, one-third of the population still resides in households with six or more members, which creates constraints on space sufficiency, particularly for larger families. There’s an increase in workers residing in different municipalities from their workplaces, implying longer commutes and a need for improved transportation.

With these demographics and housing trends, Dr. Ballesteros noted that the traditional approach to homeownership may be insufficient due to high property prices. Among the policy recommendations, she endorses that national and local governments must ensure that value creation provides appropriate value capture for public benefit in urbanized areas. Government agencies should also understand whether housing needs are quantitative or qualitative and utilize inclusive zoning to increase affordable housing supply without adding new subdivisions.

In addition, “the housing policy framework should balance the productive environment, housing consumption, and supply, and determine the right balance of ownership and rental housing at local levels,” said Dr. Ballesteros. “There must also be institutional housing programs for the elderly, since the advantage of home care may dissipate in the future.”