The Commission on Audit (COA) has ordered a sweeping review of developers’ compliance with the government’s balanced housing mandate, flagging possible underpayments tied to how the Department of Human Settlements and Urban Development (DHSUD) computed obligations.
COA said in an audit report that escrow requirements for “incentivized balanced housing compliance” were based on DHSUD Department Order No. 2021-004—a policy earlier questioned by the Department of Justice for legal infirmities. The audit body found provisions of the order inconsistent with Republic Act 7279, as amended by Republic Act 10884, which govern developers’ mandatory participation in socialized housing.
The law requires subdivision and condominium developers to allocate a share of project area or cost to socialized housing, either directly or through alternative compliance modes.
COA said the questioned provisions may have effectively reduced required participation, raising the risk of deficiencies in escrow deposits meant to support the program.
COA directed DHSUD to recompute all incentivized compliance cases dating back to 2018 and collect any underpayments. The directive covers projects with provisional escrow deposits still under evaluation and awaiting final compliance clearance.
But COA warned that even projects already cleared could be revisited if later findings show their compliance fell short of legal requirements.
DHSUD said it would comply with the DOJ opinion and COA findings, and has begun consultations with developer groups on possible next steps.
Housing Secretary Jose Ramon Aliling said developers would be given time to settle any deficiencies, with timelines calibrated to ongoing economic pressures linked to the Middle East conflict.
