Housing prices post slower growth in 1st quarter

Residential property prices in the Philippines continued to increase, although at a slower pace, during the first quarter of 2025 (Q1 2025), the Bangko Sentral ng Pilipinas (BSP) reported.

Year-on-year growth of the Residential Property Price Index (RPPI) slowed to 7.6 percent in January-March from 9.8 percent in the last three months of 2024. On a quarter-on-quarter basis, prices reversed from the fourth quarter of last year’s 1.0-percent drop, growing by 2.6 percent.

The National Capital Region (NCR) led residential property price growth with a 13.9-percent increase, significantly higher than the 3.0 percent observed in the rest of the country. Quarter on quarter, the NCR saw a 9.2-percent expansion while areas outside it recorded a 2.1-percent drop.

All areas outside the NCR, with the exception of Metro Cebu, recorded higher prices. Houses in Mindanao became 7.6-percent pricer, followed by the rest of the Greater Manila Area (GMA) at 3.8 percent and other areas in the Philippines at 1.1 percent.

Metro Cebu, on the other hand, registered a 1.7-percent drop — its first annual decrease since the first quarter of 2023.

All housing categories contributed to the higher prices, with condominiums and houses recording growth rates of 10.6 percent and 4.5 percent, respectively. Houses measured include single-attached, detached, town houses, duplexes and apartments.

Quarter on quarter, condominium prices grew by 9.9 percent, offsetting a 2.9-percent drop for houses.

The median price for all housing types was P3.37 million, the BSP said, lower than the P4.34 million for condominiums but above the P2.95 million for houses.

Houses in the NCR were the most expensive with a median price of P7.7 million, while condominiums in other areas in the Philippines were the cheapest at P2.5 million.

Residential real estate loans taken out during the first quarter, meanwhile, were mostly used to purchase new housing units (73.2 percent), with the remaining 26.4 percent and 0.5 percent used to buy pre-owned and foreclosed properties.

By type of housing, 63.7 percent of the loans were used for houses and the rest for condominiums.

Just over a fourth, or 27.4 percent, of the property loans were granted in the NCR. Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) accounted for 29.9 percent; Central Luzon, 13.8 percent, Central Visayas, 9.6 percent; Western Visayas, 7.9 percent; Davao, 4.5 percent; and Northern Mindanao (2.5 percent).

The NCR and these six regions accounted for 95.6 percent of housing loans granted by banks, the BSP said.

The RPPI calculates the average change in prices of different kinds of housing units over time from bank data on loans made to purchase residential properties.

The quarterly index, beginning the first quarter of 2025, now uses a different methodology to align with international best practices and has been renamed from the Residential Real Estate Price Index. Among others, it now uses acquisition cost instead of appraised value, and the property type has been expanded to include pre-owned and foreclosed units instead of just new ones.

Instead of just the NCR and areas outside it, the latter has further been divided into balance GMA, Metro Cebu, Metro Mindanao and other areas in the Philippines.

Source: Manila Times

Bulk price growth of building materials in NCR eases in May, retail price growth steadies

Wholesale price growth of construction materials in Metro Manila eased further in May, its slowest in three months, while retail price growth steadied, the Philippine Statistics Authority (PSA) reported.

Based on preliminary data, the PSA showed that year-on-year growth of the construction materials wholesale price index (CMWPI) in the National capital region (NCR) cooled to 0.2% in May from 0.3% in April.

The May reading was significantly lower than the 0.6% growth posted in May 2024.

It was also the lowest year-on-year growth in three months, when February posted no annual growth.

Year to date, May CMWPI growth averaged 0.2%, significantly lower than the 0.9% growth a year earlier.

“The downtrend in the annual growth rate of the CMWPI was mainly caused by the slower annual increase of the concrete products index at 0.3% in May from 0.5% in the previous month,” the PSA said in the report.

Concrete products accounted for 45.7% of the index.

Slower growth was also recorded in tileworks: (2% in May from 3.6% in April), and electrical works (0.3% from 0.4%).

Meanwhile, the following commodities logged faster annual declines: fuels and lubricants (-4.7% form -4%), reinforcing steel (-0.9% from 0.6%), and cement (-1.5% from -1.4%).

On the other hand, stronger growth was recorded in the index of hardware (0.4% from 0.1%), doors, jambs, and steel casement (0.5% from 0.4%)., and PVC pipes (0.6% from 0%).

In a separate report by the PSA, the construction materials retail price index (CMRPI) steadied to 1% in May, from April and from a year earlier.

The May CMRPI outcome was the lowest in 14 months or since the 0.6% in March 2024.

In the five months to May, CMRPI in NCR averaged 1.1% from 1% in January-May 2024.

The CMRPI is based on 2012 constant prices, while the CMWPI is based on 2018 constant prices.

The PSA attributed the steady growth to slower annual increases in the following commodity groups: carpentry materials (0.1% in May from 0.4% in April), painting materials and related compounds (2.1% from 2.4%), plumbing materials (0.5% from 1.5%), and tinsmithry materials (1.3% from 1.5%).

Meanwhile, among the seven commodity groups in the CMRPI, masonry materials (1.1% from 0.6%) and miscellaneous construction materials (0.4% from 0.3%) posted faster annual growth.

Nicholas Antonio T. Mapa, senior economist at Metropolitan Bank & Trust Co., said that he expects modest growth increases in building material prices, which reflects robust but subdued demand for construction activity.

“A further reduction in borrowing costs could help spur a rise in demand for construction projects and activity in the coming months,” he said.

In its April policy meeting, the central bank slashed borrowing costs by 25 basis points (bps), resuming its easing cycle. So far, the central bank has reduced key rates by a total of 100 bps since it began its easing cycle in August 2024.

Source: Manila Times

Rethinking road pricing

When Electronic Road Pricing (ERP) was first introduced in Singapore in 1998, the naive journalist that I was believed it would be a suitable intervention for Metro Manila. Congestion in high-traffic areas could be minimized if motorists were made to pay to use certain streets during specific hours.

ERP essentially turned Singapore’s regular roads into tollways, with pricing determined by congestion and time of use, rather than distance traveled. Fees were higher during peak hours. The system used gantries equipped with sensors at entry and exit points and automatically collected fees via in-vehicle units.

ERP is similar to the electronic toll collection system we have locally — except that in ERP, fees are charged for using public roads during peak hours. If applied to EDSA, for example, motorists would pay a fee for using the road during high-traffic times. Outside these hours, EDSA would remain toll-free.

For the sake of discussion, let’s use a base fee of P100 for all motorists using EDSA between 6-9 a.m. and 5-9 p.m. If traffic volume spikes by 7 a.m., the fee could increase to P200 to P300. During pricing hours, fees would be dynamic — rising or falling depending on traffic levels.

The idea is to discourage motorists from using EDSA during rush hour and to encourage them to take alternative routes. The goal is to decongest EDSA, which is the main artery for public transport and commuters using the train system. By setting different rates for private vehicles and public utility vehicles, ERP can also benefit public transportation.

To an extent, I believed ERP was a logical solution for EDSA. After all, it has worked well in Singapore (since 1998) and London (since 2003). Singapore is now transitioning to a next-generation, satellite-based ERP system that uses GPS to charge motorists more precisely, rather than relying solely on gantry sensors, as we do with our current tollways.

Singapore’s ERP system features dynamic pricing that varies by time, location, and traffic volume. It is fully automated, with no toll booths or barriers. Enforcement is seamless. Fees are reviewed regularly and adjusted based on real-time congestion data.

Available information indicates that ERP in Singapore led to a 30% reduction in traffic volumes in congested areas. Peak-hour travel speeds in the city center improved from 20 km/h to 30 km/h. Air quality improved due to fewer idling vehicles, and public transport usage increased. ERP fees also help fund public transport infrastructure and road maintenance.

In London, the congestion charge system has been in place since 2003. It uses a flat-rate model: the equivalent of about P1,100 per day per vehicle entering central London between 7 a.m. and 6 p.m. on weekdays. Cameras and license plate recognition systems monitor entry points. Emergency vehicles, taxis, electric vehicles, and persons with disabilities enjoy exemptions or reduced rates.

London has reportedly seen a 15% to 20% drop in traffic volumes within the charging zone, reduced congestion delays, improved air quality, and a rise in cycling and walking — especially after the addition of bike lanes and pedestrian zones. Most of the collected fees are reinvested in London’s transport system.

Stockholm (since 2006) and Milan (since 2012) have also implemented time-of-use pricing on city roads. Stockholm uses time-based pricing, while Milan combines time- and pollution-based pricing. Both cities have reported improvements in traffic flow and public health outcomes.

In January, New York City began charging drivers a $9 fee to enter Manhattan below 60th Street during peak hours, with reduced rates at other times. Early data shows a 13% drop in vehicle entries, shorter travel times, more people using public transit, and increased pedestrian activity. In just three months, the program collected around $160 million earmarked for transit upgrades.

However, in March, the US federal government revoked its prior approval of the NYC program, claiming it imposed financial hardship on working-class commuters. The programs also lacked toll-free alternatives for the public. The Metropolitan Transportation Authority (MTA) sued to challenge the decision, and the case is now pending in court.

I consider ERP a form of usage-based taxation. It taxes motorists for using a specific road at a specific time. This “usage tax” is conceptually similar to the excise taxes that Filipinos pay on gasoline, cars, jewelry, tobacco, and alcohol. The revenue collected can be earmarked for public transport infrastructure and road upkeep.

In Singapore and London and Stockholm, driver education is arguably more advanced than in the Philippines. Public infrastructure is better. Their mass transit systems — trains, subways, buses — are far more efficient. These cities have shown that congestion pricing works because of three things: effective public transport, transparent use of funds, and well-informed drivers and commuters.

More importantly, road pricing in these places perhaps does not significantly impact the cost of living. Here, the typical argument is: “We already paid taxes to build the roads — why pay again to use them?” An ERP here would add to the existing burden of taxes and fees already imposed on car owners.

Moreover, I reckon cities like Singapore, London, and Stockholm do better than us at planning and implementation. Their systems are relatively reliable. Their citizens are more accustomed to following rules. And they are ahead of us in fighting corruption. Most importantly, they have efficient, reliable, and comfortable public transport systems.

These, I believe, are the essential ingredients that made ERP a “success” in Singapore, London, Stockholm, Milan, and New York. That said, I understand the criticism that ERP could be financially burdensome for the working class, especially if toll-free alternatives aren’t available.

In EDSA’s case, I suspect congestion pricing would simply divert traffic to other roads, without significantly decongesting EDSA itself. Worse, the additional costs from ERP could be passed on to commuters as higher fares (except for trains) and higher vehicle operating costs.

Clearly, our public transport system still has major gaps. Only when we have efficient, affordable, and comfortable light rail and bus rapid transit options — especially on EDSA — will people willingly leave their cars at home. That’s when road pricing can genuinely work, with or without ERP.

For policymakers considering ERP for EDSA or other major Metro Manila roads, this effort must be part of a broader traffic management plan. ERP cannot be a one-off fix. It must complement plans to upgrade public transportation, modernize roads, automate traffic management, and reform vehicle taxes and registration policies.

Without these supporting elements, ERP will simply become another burden — an additional cost for private motorists and public utility vehicle operators. Worse, it may not solve congestion at all but merely redistribute it to surrounding streets.

The government cannot keep building more roads. Land is finite, and only so much can be allocated to road infrastructure. Vehicle ownership will continue to rise. Road pricing is only effective if implemented alongside a comprehensive suite of solutions to manage traffic and transportation demand.

An efficient, comfortable, and cost-effective mass transit system remains the most viable solution to congestion. Without it, road pricing cannot be implemented fairly — or effectively. It shouldn’t be considered at all. Leave the fees to the tollways.

Source: Business World