Friday, May 22, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
LEGISLATORS HAVE AGREED to reimpose a cap on rent increases, with Congress expected to ratify a proposed law on Monday.
The Rent Control Act of 2009 sets a maximum 7% cap on rent hikes until December 31, 2013, up from the 2011 set forth in the House of Representatives and Senate versions.
The 7% cap, said legislators meeting as a bicameral committee, was a compromise between Senate Bill (SB) 3163’s 10% and House Bill (HB) 6098’s 4% ceilings.
Republic Act 9341 or the Rent Control Act of 2005, which expired last December 31, set a 10% annual ceiling.
To be covered by the cap are residential units where monthly rentals do not exceed P10,000 — in Metro Manila and other highly urbanized cities — and P5,000 for other areas. Excluded are residential units under a rent-to-own scheme.
Also adopted by the bicam was a one-year moratorium on increases for 2010.
The Housing and Urban Development Coordinating Council will be authorized to study if the industry needs to be regulated or deregulated by the time the law lapses, taking into consideration data such as the number of rental units, prevailing rates, and monthly inflation.
Oriental Mindoro Rep. Rodolfo G. Valencia (1st district), chairman of the House committee on housing and urban development, said more families were foregoing owning their own houses. He said National Statistics Office data as of 2006 showed 1.582 million families renting, from only 1.546 million families in 2000. Of the figure, 97.5% were covered by the expired rent control law.
Asked to comment, the Philippine Chamber of Commerce and Industry (PCCI) reiterated its opposition to the proposed law, saying free markets should be allowed to operate and the welfare of housing owners considered.
"[The measure] will be a very big disincentive to [housing owners]. [Legislators] have to study this further. How long shall we keep a regulated regime? Sometimes we really have to look at a bigger picture," PCCI President Edgardo G. Lacson said. — Bernard A. Allauigan
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