Analysts see long-term gains of Land Use bill despite near-term regulatory risks

By Juliana Chloe A. Gonzales

THE PASSAGE of the long-overdue measure that will institutionalize land use planning could redefine the Philippine property landscape, with market analysts citing long-term benefits even as they warned of increased regulatory risks and higher compliance costs for developers.

The proposed National Land Use Act (NLUA), which will establish a unified framework for land use, gained ground after the House of Representatives approved House Bill No. 8466 on final reading last week.

“From a market and advisory standpoint, the proposed protections introduce an added layer of regulatory risk for developers holding agricultural land banks intended for future conversion,” Dino Mari G. Palanca, director for marketing and research at Savills Philippines, told BusinessWorld in an e-mailed response to questions on Thursday.

“Developers with ongoing planning or incomplete approvals may experience delays, timeline adjustments, or higher compliance costs, particularly if existing land classifications conflict with the new national framework.”

While he expects near-term regulatory risks, Mr. Palanca said measure may encourage more disciplined due diligence, clearer project phasing, and greater focus on already designated settlement areas.

“Over the longer term, the policy could also help temper speculative land banking and encourage more demand- and infrastructure-driven development,” he said.

The framework can reduce some of the regulatory ambiguity that slows down mixed-use and township projects for the developers, Mr. Palanca said, but it will still depend on other factors like alignment with the local government units, transitional provisions, and the clarity of implementing the rules.

The measure could also positively influence foreign direct investments and joint ventures, Savills said, provided there is a transparent and predictable land development framework.

“A clearer framework could improve visibility on where long-term development can realistically occur, helping reduce entitlement and regulatory risks for large-scale projects,” he said.

“This may encourage more strategic partnerships between foreign capital and local developers, particularly in township, industrial, logistics, tourism, and infrastructure-linked developments.”

The policy, supported by improvements in the ease of doing business and investment incentives, could help position the Philippines as a more competitive destination for long-term real estate and infrastructure investments.

Joey Roi Bondoc, director for research at Colliers Philippines, said that the NLUA will likely redefine the property landscape.

“By mandating the protection of prime agricultural lands and tightening penalties for unauthorized conversion, the law impacts developers by limiting development options, and enforcing stricter, centralized land-use standards,” Mr. Bondoc told BusinessWorld in a Viber message on Friday.

Mr. Bondoc stated this will not completely affect developers with existing land banks earmarked for conversion or expansion.

“The bill’s sanctions mainly target developers with illegal, speculative, or non-performing land banking such as land conversions carried out without Department of Agrarian Reform (DAR) approval, or projects that obtain conversion orders but remain idle without valid justification,” he clarified.

“The measure mandates compliance and pushes for sustainable development. Property firms that comply with the measure and its provisions have nothing to worry about.”

On the protection of ancestral lands and natural resources, he explained that large-scale private sector-led projects nearby environmentally or culturally significant areas will be heavily protected as the framework shifts towards a balanced economic development with focus on environmental protection.

“We believe that this should likely benefit property developers in the long term. The proposed bill aims to improve disaster resiliency by guiding development away from hazardprone zones,” he said, noting the measure reduces risk of delays and legal disputes stemming from overlapping claims or uncertain land status.

Colliers believes that the measure bodes well for the Philippine property sector over the long term, as it should balance the interest of farmers, developers, consumers, and property investors.