If you’re renting a residential unit in the Philippines for ₱10,000 a month or below, the maximum rent increase your landlord can impose in 2026 is just one percent — provided you’ve been living there since at least 2025. That’s the lowest cap in recent memory, set by the National Human Settlements Board (NHSB) through Resolution 2024-001, which governs rent regulation for the 2025–2026 period. For tenants in lower-cost housing, this effectively freezes rent movement at a token level. For landlords, it means the annual adjustment can barely keep pace with inflation, let alone rising maintenance costs.
These numbers sit at the center of a regulatory framework that goes back to 2009, when Congress passed Republic Act No. 9653 — the Rent Control Act. The law was never meant to be permanent. It gets extended periodically through board resolutions, and the caps have changed over time. What hasn’t changed is the basic structure: not all rentals are covered, and the rules for those that are differ sharply from the rules for commercial leases or high-end residential units. Understanding where your situation falls — and what the law actually requires — can save both tenant and landlord from costly disputes.
How the Rent Control Act Draws Its Lines
The key distinction isn’t just about rent amount — it’s also about who is paying it. A unit that is covered under one tenant can exit coverage when that tenant leaves and the landlord resets the rent. If the new rent stays within the ceiling, the caps apply again prospectively. If it crosses the threshold, the unit is no longer covered. This “vacancy recompression” rule means that a landlord can effectively bypass the cap between tenants, but once a new lease is signed within coverage, the 12-month clock and the percentage limit restart.
What Actually Changes the Size of Your Increase
Whether you’re a tenant bracing for a renewal notice or a landlord planning next year’s budget, the answer depends on three variables: the unit’s rent level, the tenant’s continuity, and the type of property. A covered unit with the same tenant since 2025 faces a 1% cap in 2026. A covered unit with a new tenant who moved in after the resolution took effect is not subject to any cap at all — the landlord can set the initial rent freely. A dormitory or boarding house for students faces a separate ceiling of 10% annually, higher than the standard 7% historically allowed for regular residential units.
For commercial tenants, the entire framework is different. There is no statutory cap on rent increases. The lease contract is the sole authority. Standard practice includes fixed annual escalations of 5% to 10%, or stepped amounts tied to specific years. When a commercial lease expires, the landlord can demand a new base rent at market rates. If the tenant stays on without a new contract, an implied month-to-month lease (tacita reconduccion) arises under Article 1670 of the Civil Code, and the landlord can increase rent with 30 days’ notice.
Fine Print That Catches Both Sides Off Guard
Notice Requirements — Not Just a Formality
Any rent increase for a covered unit must be communicated in writing at least 30 days before the intended effective date. The notice must state the new rent, the effective date, and the legal or contractual basis for the increase. Failure to give proper notice doesn’t just delay the increase — it can void it entirely. The Supreme Court held in Torres v. Leviste (2021) that failing to observe the 30-day notice period nullifies the entire increase, not just the excess amount. Landlords should serve notice in a provable way: a dated letter with acknowledgment receipt, registered mail, or an agreed electronic channel.
Deposits and Advances — Strict Limits, Real Consequences
Section 7 of RA 9653 limits the total upfront a landlord can collect to one month’s advance rent and two months’ security deposit. The security deposit must be kept in a bank account in the landlord’s name, and interest earned belongs to the tenant. At lease end, the deposit can only be applied to unpaid rent, unpaid utilities, and damage beyond normal wear and tear. Any remainder must be returned within one month. Landlords who fail to return the deposit or deduct without proper documentation risk civil liability and administrative penalties.
Utilities and Pass-Throughs
Landlords cannot inflate utility charges as a disguised rent increase. They may only collect actual consumption plus a reasonable maintenance fee. Over-billing is actionable under the Consumer Act. For sub-metered units, the arrangement must be transparent and itemized. This is a common area of dispute, especially in boarding houses and dormitories where utilities are shared.
Grounds for Ejectment — Limited and Lawful
RA 9653 Section 9 lists five lawful grounds for eviction: (1) unauthorized subleasing or assignment; (2) three months’ rent arrears; (3) the owner or family needs the unit for personal use after lease expiry, with three months’ written notice and no re-rental for one year; (4) necessary repairs ordered by a competent authority; (5) the lease period has expired. Landlords cannot lock tenants out, change locks, cut utilities, or remove doors. Self-help eviction is illegal. The proper remedy is an ejectment suit in court.
What to Do With This Information
For Tenants: Verify Your Coverage and Your Increase
Start by checking whether your unit falls within the coverage ceiling. If your monthly rent is ₱10,000 or below in NCR or a highly urbanized city, or ₱5,000 or below elsewhere, you are covered. Ask your landlord to provide the legal basis for any increase in writing. If the increase exceeds the applicable cap — 1% for 2026 renewals, or 7% historically — or if no written notice was given 30 days prior, you may contest it. Keep copies of your lease, payment receipts, and all notices. If the dispute cannot be resolved directly, proceed to barangay conciliation (mandatory for claims up to ₱400,000). If that fails, file a complaint with the Department of Human Settlements and Urban Development (DHSUD) or the appropriate court.
For Landlords: Plan Increases Within the Rules
Confirm whether your unit is covered as of January 1 each year. If it is, plan increases at or below the current cap — 1% for 2026 continuing tenants. Serve written notice at least 30 days before the effective date, stating the new rent and the basis. Collect no more than one month’s advance rent and two months’ security deposit. Open a separate bank account for deposits and return any balance within one month of move-out, with itemized deductions only for lawful charges. Avoid self-help eviction; use the courts for ejectment. If your unit is above the coverage ceiling, you are not bound by the cap, but the lease contract and Civil Code still apply.
For Commercial Tenants and Landlords
Since commercial leases are exempt from RA 9653, the contract is everything. Review escalation clauses carefully before signing. Fixed percentage increases, flat rate steps, and percentage-of-gross-sales clauses are all standard. When a lease expires, the landlord can set a new base rent at market rates. If you stay on without a new contract, an implied month-to-month lease applies, and either party can terminate or adjust terms with 30 days’ notice. Always get any renewal terms in writing.
Frequently Asked Questions
Can my landlord increase rent in the middle of the lease term? ▾
Does the 1% cap apply to new tenants moving in during 2026? ▾
What happens if my landlord tries to increase rent by more than the allowed cap? ▾
Are boarding houses and dormitories covered by the same rules? ▾
Can a landlord evict me for not agreeing to a rent increase? ▾
How long does a landlord have to return my security deposit? ▾
Do these rules apply to Airbnb or short-term rentals? ▾
Can local governments impose stricter rules than the national law? ▾
Sources
The Future of Residential Leasing in the Philippines — Covers broader leasing trends and how rent control fits into the evolving rental market.
Know Your Rights: Apartment Lease Break Options in the Philippines — Explains tenant options when leaving a lease early, including interactions with rent control protections.
Follow us on LinkedIn!
Rent Increase Regulations Under Philippine Law. Respicio, 2025.
Annual Rent Increase Rules Philippines: Rent Control Law and Allowed Percentage. Respicio, 2025.
Legal Limits on Rent Increase in the Philippines. Lawyer Philippines, 2025.
Tenant Rights Philippines: Rent Control Act Guide. RentScout, 2025.
Rent Increase Philippines 2026: Landlord Guide. Suzy Rent, 2026.
National Commercial Rent Increase Rules. Landager, 2026.
