<p>This policy note provides an update of housing subsidies in the Philippines and the fiscal costs of their application. It addresses the issue on whether the subsidies for housing programmes could have been put into more efficient use by the government.</p>
<p>In putting forth recommendations, the policy note highlights key lessons that are worth considering for the Philippines: </p>
<ul>
<li>The housing finance subsidy should be a transparent amount that may be budgeted and with government commitment in terms of amount and continuity of resources. Chile, Colombia, and Costa Rica dedicated more than 1 percent of government budget in maintaining temporal continuity in the long term.</li>
<li>Subsidy interventions in the financial system should be focused on low- to middle-income households or those who are able to fulfill obligations resulting from small loans. Subsidy can be provided through a point system that rewards the need for housing and savings effort.</li>
<li>The demand subsidies should be portable, allowing families to select their housing in terms of type of property, location, and other characteristics. The subsidy is given to the household, not to the developer or financial entity.</li>
<li>The poor with incomes below minimum wage and those with incomes that are 1.5 to 3.5 times the minimum wage require other types of intervention. Most likely, these are through different types of public housing arrangements such as NHA housing and rental arrangements, among others. </li>
</ul>