Rent Increases in the Philippines

What Tenants Should Expect at the Start of the Year

The beginning of the year often comes with a familiar message for tenants: “We are increasing the rent.”

But not all rent increases are legal.

In the Philippines, rent adjustments—especially for residential units—are regulated by law. Knowing what landlords can and cannot do empowers tenants to protect their rights and budget accordingly.

This article explains legally allowed rent increases, the applicable law, and what tenants should watch out for.

1. The Governing Law: The Rent Control Act

Rent increases for certain residential units are governed by Republic Act No. 9653, also known as the Rent Control Act of 2009, as extended by subsequent laws.

The Rent Control Act applies to:

• Residential units (apartments, houses, dormitories, boarding houses)

• Units leased on a monthly basis

• Units with rent not exceeding the threshold set by law

⚠️ The law does not apply to commercial spaces or luxury residential units above the rent ceiling.

2. How Much Can Rent Be Increased?

Maximum Allowable Increase

For covered residential units:

• Maximum increase: 5% per year

• Applies only to:

  • The same tenant

  • After the expiration of the lease term

💡 This means a landlord cannot impose multiple increases within the same year, nor exceed the 5% cap while the tenant remains in possession.

3. Units Covered by Rent Control

As a general rule, rent control applies to residential units with monthly rent within the statutory ceiling (which varies depending on location and current extensions of the law).

If your unit falls within the rent ceiling, the landlord must comply with the 5% cap.

If your unit is above the ceiling, rent control does not apply—but other legal rules still do, such as contract law and basic principles of fairness.

4. Can the Landlord Increase Rent During the Lease Term?

No.

If you have a fixed-term lease contract, the rent:

• Cannot be increased mid-contract

• Must remain the same until the lease expires

Any rent increase:

• Must be imposed only upon renewal

• Must comply with the Rent Control Act (if applicable)

A clause allowing automatic increases during the lease term may be void or unenforceable if it violates the law.

5. Can the Landlord Evict You for Refusing an Illegal Increase?

No—refusing an illegal rent increase is not a valid ground for eviction.

Under the Rent Control Act:

• Tenants cannot be ejected for asserting their rights

• Retaliatory eviction is prohibited

Illegal eviction or harassment may expose the landlord to:

• Civil liability

• Administrative penalties

• Criminal sanctions in extreme cases

• 
  

6. Common Landlord Tactics Tenants Should Watch Out For

Tenants should be cautious of:

• Sudden “reclassification” of the unit to evade rent control

• Forced contract termination without legal grounds

• Rent increases disguised as “new charges” or “fees”

• Pressure to vacate to install a new tenant at a higher rate

📌 The law looks at substance over form—renaming a rent increase does not make it legal.

7. What Should Tenants Do If Faced With an Illegal Increase?

Tenants may:

1. Request the legal basis for the increase in writing

2. Check if the unit is covered by rent control

3. Refuse to pay illegal increases

4. Seek assistance from:

   • The Barangay

   • Local housing or rent control offices

   • A lawyer or legal aid group

Rising costs do not give landlords a free pass to disregard the law. Understanding rent control rules helps tenants stand their ground—calmly, legally, and confidently.

If you’re unsure whether a rent increase is lawful, ask questions before paying. Silence can be mistaken for consent.

Source: Ziggurat Real Estate

Metro Manila rental yields may stay flat in 2026

Rental Yields in Metro Manila’s residential market are expected to remain flattish next year amid weak investor demand and lingering condominium oversupply, property consultants said.

“Yields will likely remain flat for the year 2026, with core central business districts (CBDs) recovering faster,” Roy Amado L. Golez, Jr., director for research, consultancy, and valuation at Leechiu Property Consultants (LPC) said.

“Rents in Bonifacio Global City and Taguig have already exceeded pre-pandemic numbers, while other locations remain at a significant discount. This situation will persist until supply is taken up,” he said.

Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said rental yields will likely stay flattish next year as residential demand is driven mainly by end-users rather than investors.

“I think one reason why the ready-for-occupancy promos, for example, of certain developers are working is because the demand is actually end-user driven,” he said in a phone interview.

In Metro Manila, residential rental yields averaged 4.1% in the primary market, or properties sold by developers to end-users, LPC said in its fourth-quarter property market report.

Meanwhile, secondary market yields — which cover pre-owned units offered for sale or for rent by their owners — averaged 4.8%, based on LPC data.

“Secondary market units will continue to generate higher yields versus primary market units, since buyers will be acquiring units from sellers who bought these units at much lower prices,” Mr. Golez said.

Mr. Bondoc added that Metro Manila’s primary residential market continues to face an oversupply of 30,400 unsold units, equivalent to about eight years’ worth of inventory.

Most of the region’s condominium inventory falls under the affordable to lower middle-income segment, with units typically priced between P2.5 million and P6.99 million, Colliers data showed.

“Current prices of condominiums are on the high side, and with challenging rents, this results in lackluster yields. To boost rental yields, prices should remain flat — since we don’t really see widespread price cuts — to allow the market to catch up,” Mr. Golez said.

Joe Curran, chief executive officer at Savills Philippines, expects rental yields in the region to be “broadly stable to slightly firmer” next year, at around 4% to 6%.

He said lower interest rates, return-to-office mandates, and the long-term stay of expatriates and students could help lift rental demand in Metro Manila’s residential market.

To improve rental yields, developers should adopt a more disciplined launch pipeline for condominium projects, Mr. Curran said.

He also cited the need for stronger marketing and proactive maintenance to make unsold condominium units more attractive for leasing.

“While Metro Manila stock continues to grow, supply that remains aligned with genuine end-user and rental demand should support stronger pricing power over the medium term,” Mr. Curran said in an e-mailed reply to questions.

For 2026, Colliers projects residential vacancy to ease to 26% from 26.5% as of end-2025, as developers slow the launch of residential projects in Metro Manila.

Source: Business World

More Filipinos choosing to rent–not buy–homes

More Filipino families were choosing to rent spaces rather than own homes, a “notable shift” that was more common among households in the urban jungle of Metro Manila as high costs and slow wage growth dash homeownership ambitions.

That was according to the 2021 results of the Consumer Finance Survey released by the Bangko Sentral ng Pilipinas (BSP), which conducts the nationwide triennial poll to check the financial condition of Filipino households.

Results of a survey of 16,212 families between March and December 2022 showed 11.3 percent of respondents preferred rental accommodations in 2021—the year when the economy slowly reopened from pandemic-led lockdowns that threw the Philippines into a recession.

That was higher than the 10.2 percent recorded in the previous survey round in 2018.

By area, renting or leasing was more common in the National Capital Region (NCR) at 34.9 percent, followed by Balance Luzon at 10.6 percent. But it was less popular in Visayas and Mindanao, where homeownership rates are particularly high.

Nevertheless, survey data showed seven in every 10 families in the country owned or co-owned a house.

Homeownership in areas outside of NCR was at 73.9 percent, much higher than the 43.9 percent rate for the densely populated Metro Manila, where sluggish wage growth may not keep up with rising home prices.

Even during the pandemic, BSP data showed residential property prices in the country grew by 4.9 percent in the final quarter of 2021.

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Apart from the shifts in the mode of home acquisition, the latest BSP survey also provided other insights into the financial condition of Filipino families.

Data showed nonfinancial assets continued to form the foundation of Filipino household wealth portfolios, with home appliances and equipment still being the most commonly owned assets at 96.6 percent.

Within the appliance category, mobile phones (92.8 percent) continued to surpass televisions (81.1 percent) as the most common household item.

Residential properties (69.9 percent) were the second most commonly owned nonfinancial asset of households, followed by vehicles (35.3 percent). Among vehicles, motorcycles (61.7 percent) continued to be the most popular.

The composition of financial assets revealed interesting patterns of financial behavior. Deposit accounts recorded the highest ownership rates at 35.3 percent, followed by traditional cash savings kept at home (28.7 percent) and the rapidly growing category of e-money accounts (24.3 percent).

CFS_2021.pdf

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Source: Inquirer