THE GOVERNMENT’S fast-track licensing scheme may bring housing projects to market sooner but could favor large, well-capitalized developers because preselling proceeds must remain locked in escrow until a regular license to sell is issued, property analysts said.
“A developer can no longer treat TLS-era pre-sales as free working capital, they need enough of a buffer to cover refunds if a project doesn’t convert in time,” Savills Philippines Research Head Dino Palanca said in a Viber message.
He said the escrow requirement under the revised temporary license to sell (TLS) rules raises the capitalization needed to launch a project, likely favoring developers with stronger balance sheets.
The TLS allows qualified developers to begin selling units while awaiting certain permits from other government agencies. However, all proceeds must be deposited in an escrow account and cannot be withdrawn until the developer obtains a regular license to sell.
Under Memorandum Circular No. 2026-012, developers that have met the regular licensing conditions may apply for a TLS while awaiting additional requirements, including an environmental compliance certificate and an approved survey plan from the Department of Environment and Natural Resources, as well as a building permit from the local government.
The Department of Human Settlements and Urban Development (DHSUD) said the measure seeks to prevent qualified housing projects from being stalled by regulatory bottlenecks while protecting buyers.
Mr. Palanca said the TLS would accelerate the market entry of housing units but would act more as a timing mechanism for existing project pipelines than as a catalyst for new developments.
“Its real value is letting well-advanced projects start pre-selling instead of sitting idle through permitting, which should modestly shorten the supply pipeline over time,” he said.
The TLS is valid for one year and may be extended for a final six months if the delay in obtaining the outstanding requirements is not attributable to the developer.
Mr. Palanca described the maximum 18-month period as “workable” for technically advanced projects, although it may be tight for developments requiring approvals from several government agencies.
If a TLS expires without being converted into a regular license, the developer must refund all payments, including interest and taxes, within 30 days.
Mr. Palanca said the “one-strike” rule against further extensions is a significant deterrent to developers seeking to use the TLS as a permanent workaround.
Colliers Philippines Research Director Joey Roi Bondoc said the TLS rules, combined with the decentralization of regulatory approvals, could ease longstanding delays in the issuance of licenses and accelerate housing launches outside Metro Manila.
Under Memorandum Circular No. 2026-012, the DHSUD transferred the processing and approval of regulatory applications from its central office to regional offices, except in the Negros Island Region.
The regional offices have 15 days from the payment of fees to approve or reject a regulatory application.
“Even the regional offices can see that there’s a strong demand in their region, therefore, they should really expedite the processing. There’s really a need to loosen the regulatory bottlenecks,” Mr. Bondoc told BusinessWorld in a telephone interview.
He said faster approvals could help address housing supply, demand and affordability by allowing developers to proceed with launches despite delays in permits issued by other agencies.
Mr. Palanca said the reform would not necessarily create new projects immediately because it primarily allows advanced projects to begin preselling earlier.
Mr. Bondoc said the DHSUD should ensure that small and medium-sized developers understand the revised rules and have a way to raise implementation concerns.
“A better consultation with these small-sized players will be crucial. Of course, it’s still in its initial phases and we really have yet to see the success of its rollout. But given that it is still in the initial phases, I think that there should be a constant feedback mechanism between the developers.”
The DHSUD also requires advertisements to clearly state the TLS number so prospective buyers know that a project has only a temporary license.
Analysts said the disclosure should be applied consistently across marketing platforms and should clearly explain the temporary nature of the license.
The article was originally published in Business World and written by Juliana Chloe A. Gonzales.
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