MANILA: The National Human Settlements Board (NHSB) has reduced the cap on rental increases for residential units with monthly rates of PHP10,000 or less to a maximum of 2.3 percent, down from last year’s limit of 4 percent. The new regulation, intended to protect low-income tenants from excessive rent hikes, will be in effect from January 1 to December 31, 2025.

According to Philippines News Agency, the NHSB’s decision, articulated in Resolution No. 2024-001, was adopted in December 2024 following a recommendation from the National Economic and Development Authority (NEDA). Undersecretary Henry Yap signed the resolution on behalf of the Department of Human Settlements and Urban Development (DHSUD), representing Secretary and NHSB Chair Jose Rizalino Acuzar. The rental cap is part of efforts to safeguard tenants in lower-income brackets under the guidelines of Republic Act 9653, known as the Rent Control Act of 2009.

The regulation stipulates that the cap applies to residential units occupied by the same tenants as of 2024 and who continue their lease into 2025. Properties with rents exceeding PHP10,000 per month are not subject to this restriction. The resolution clarifies the definition of a residential unit, encompassing apartments, houses, and other dwellings, excluding motels and hotels but including properties used for home industries if principally used for living purposes.

If a unit becomes vacant in 2025, landlords may set new rental rates for new tenants, as these are not covered by the resolution. Boarding houses, dormitories, and similar accommodations, however, are limited to one rent adjustment within the year, regardless of whether the cap is reached. Newly constructed or leased properties in 2025 are not bound by the cap and may establish their own rental rates.

For 2026, a new cap of 1 percent will apply to units occupied by the same tenants paying PHP10,000 or less per month. Tenants paying rents above this threshold in 2025 will not be subject to the 2026 cap. Tenants are encouraged to resolve disputes through the Barangay Justice System before resorting to court action. Violations by landlords could result in fines between PHP25,000 and PHP50,000 or imprisonment for up to six months, subject to court discretion.