TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE
939
S. No.
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25 AUG-5 P4;02
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Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
TO PROVIDE INCENTIVES FOR THE PRIVATE SECTOR TO UNDERTAKE 
RENTAL RESIDENTIAL HOUSING AT RATES AFFORDABLE TO LOW AND 
MIDDLE-INCOME FAMILIES AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The housing backlog of the country is one of the major predicament in the 
country that the government consistently endeavors to address but, ironically, 
continues to worsen over the years. It stands at 6.5 million units as of 2022. An 
article of the Philippine Institute for Development Studies (PIDS) published on 
February 9, 2025 quoted a report of the United Nations Human Settlements 
Programme or UN-Habitat stating that the estimated housing need in the Philippines 
is projected to dramatically increase from 6.5 million to 22 million by 2040 if current 
trends continue. The report further revealed that "informal settler families are 
estimated at 3.7 million, half a million of which are living in slums and high risk areas 
in Metro Manila or the National Capital Region." On the other hand, the Department 
of Human Settlements and Urban Development (DHSUD) officially estimated that the 
housing backlog in the country will reach 10 million by the end of the term of the 
current administration.1
Renting a dwelling unit has long been a viable alternative to Filipino families 
from various income classes. However, there is a need for dwelling units for rent at
1 PIPS - Philippine Institute for Development Studies


reasonable and affordable rates. For the private sector to invest in housing 
construction which will be rented to the low and middle-income level families at 
reasonable and affordable rates, a program package of incentives is needed.
The Philippine Development Plan 2023-2028 acknowledges that strengthening 
public rental housing is an option for those who cannot afford homeownership is 
required to address the large deficit in housing units, fiscal challenges to meet 
resource requirements for housing production, low absorptive capacity of the 
National Housing Authority (NHA), and ownership affordability issues.2
The Philippine Institute for Development Studies (PIDS) urges the local 
government units (LGUs) "to partner with the private sector. LGUs can provide the 
land, extend tax incentives, identify beneficiaries, conduct social preparation 
activities, and collect housing rent or fees. Meanwhile, the private sector can 
undertake the development, construction, and management services of the 
property."3
The "Incentives for Rental Residential Housing by the Private Sector Act 
seeks to provide incentives to private companies which undertake rental residential 
housing at affordable rates. Such incentives include exemption from taxes and tax 
credits. The proposed measure will provide two-pronged benefits - affordable 
housing units for the people and gainful business opportunities for the private 
sector. This will be instrumental in achieving our nation's goals:
• 
to "increase access of informal settler families, homeless, and underprivileged 
to housing" under the Philippine Development Plan 2023-20284;
• 
to "secure home ownership" to live a "maginhawang buhay" under the 
AmBisyon Natin 20405; and
• 
to "make cities and human settlements inclusive, safe, resilient and 
sustainable" under the Sustainable Development Goals6
2 Philippine Development Plan 2023-2028 - Philippine Development Plan
3 PIDS - Philippine Institute for Development Studies
4 Philippine Development Plan 2023-2028 - Philippine Development Plan
5 2162022 A Long Term Vision for the Philippines


The approval of this measure to address the unmet needs for housing is 
urgently requested.
[NGGOY EJERCITO ESTRADA
’ Goal 11 I Department of Economic and Social Affairs


TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. No. 939
ufr •’ 
■
25 AUG -5 P4 :02
R!:CEi;-.OB\
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
TO PROVIDE INCENTIVES FOR THE PRIVATE SECTOR TO UNDERTAKE 
RENTAL RESIDENTIAL HOUSING AT RATES AFFORDABLE TO LOW AND 
MIDDLE-INCOME FAMILIES AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Title. - This Act shall be known as the "Incentives for Rental
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Residential Housing by the Private Sector Act".
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Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State to
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provide the basic need of shelter for the homeless low and middle-income with the
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cooperation of and by providing incentives for the private sector.
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Towards the attainment of this policy, incentives private sector provided to
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promote, accelerate and enhance continuity of the public and private sector's
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cooperation to provide residential housing for rent at reasonable affordable rates.
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Sec. 3. Incentives for Rental Housing by the Private Sector. - Any law to the
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contrary notwithstanding, the following incentives are hereby granted to encourage,
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promote and support the private sector to provide rental residential housing for low
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and middle-income families:
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(1) Exemption from the Value-Added Tax on lease of properties of the
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rentals from dwelling units covered by Republic Act No. 7644 and such
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dwelling units which are hereinafter leased for residential housing of
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low and middle-income families renovation of existing units into rental
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apartments by construction of new units or dwelling residential housing 
of low or middle-income families;
(2) 
Exemption from any local government taxes on real estate - the rates 
of levy imposed as of the effectivity of this Act under Republic Act No. 
7160 or the Local Government Code of 1991, to the extent of the tax 
increase arising from the increase in the assessed value of the property 
from and after the effectivity of this Act: Provided, That the real estate 
and dwelling units constructed thereon are covered by R.A. No. 7644, 
the rental regulation law, up to December 31, 1997;
(3) 
Tax credit of twenty-five percent (25%) of the gross rentals for five (5) 
years following the completion of the new or renovated housing units 
for rental housing for low and middle-income families earning less than 
One Hundred Thousand Pesos (P100,000.00) per annum at rental rates 
of not more than Forty Thousand Pesos (P40,000.00) per annum per 
unit;
(4) 
Tax credit up to twenty-five percent (25%) of the contractor- 
developers professional fees earned from construction of new units or 
renovation of existing units into apartment dwelling units for rental 
residential housing for middle and low-income families earning less 
than One Hundred Thousand Pesos (P100,000.00) per annum and to 
be rented at not more than Forty Thousand Pesos (P40,000.00) per 
annum per unit; and
(5) 
Entitlement to financing for the necessary repairs to preserve existing 
rental units, renovation of existing units to apartments for rental 
housing, or the construction of new units for rental housing 
developmental financing provision of Republic Act No. 6846, the Abot- 
Kaya Pabahay Fund, or the socialized housing program under Section 
22 (a) of Republic Act No. 7660, the Documentary Stamp Tax Law, or 
such other Housing Financing for low and middle-income socialized 
housing programs provided by existing law.


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Sec. 4. Implementation and Monitoring. - The provisions of this Act shall be
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implemented by the Department of Human Settlements and Urban Development
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(DHSUD), in consultation with the Department of Finance (DOF). DHSUD shall
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submit an annual report to the President and the Congress.
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Sec. 5. Implementing Rules and Regulations. - Within sixty (60) days from
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the effectivity of this Act, the Secretary of DHSUD, in coordination with the Secretary
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of the DOF, shall promulgate the Rules and regulations to carry out and enfoce the
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provisions of this Act.
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Sec. 6. Separability Clause. - If any provision or part hereof is held invalid or
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unconstitutional, the remainder of the law or the provision or part not otherwise
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affected shall remain valid and subsisting.
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Sec. 7. Repealing Clause. - Any law, presidential decree or issuance,
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executive order, letter of instruction, administrative order, rule, or regulation
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contrary to or inconsistent with the provisions of this Act are hereby repealed,
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modified, or amended accordingly.
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Sec. 8. Effectivity. - This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette or in a newspaper of general circulation.
Approved,