In the Philippines, the construction of any building or structure is governed primarily by Presidential Decree No. 1096, otherwise known as the National Building Code of the Philippines (NBCP). Under this law, a building permit is not a mere formality but a mandatory legal requirement intended to ensure the safety, integrity, and orderly development of structures.

Constructing without a valid permit—or "illegal construction"—carries significant legal, financial, and administrative risks for property owners and developers.

1. Mandatory Requirement of a Building Permit

Section 301 of the NBCP explicitly states that no person, firm, or corporation shall erect, construct, alter, repair, move, convert, or demolish any building or structure without first obtaining a building permit from the Office of the Building Official (OBO) in the city or municipality where the project is located.

This requirement applies to almost all types of construction, with very few exceptions (such as minor traditional indigenous family dwellings or small sheds under specific dimensions).

2. Administrative Penalties and Fines

The most immediate consequence of building without a permit is the imposition of administrative fines. The Building Official has the authority to:

Issue a Cease and Desist Order: An immediate "Stop Work" order is served on the owner. Construction must halt until the permit is secured and fines are paid.
Impose Administrative Fines: Fines are calculated based on the gravity of the violation and the value of the construction. Under the revised implementing rules, fines can range significantly depending on whether the violation is classified as less grave, grave, or very grave.
Surcharges: Constructing without a permit typically incurs a surcharge of 100% of the building permit fees.

3. Criminal Liability and Imprisonment

Section 213 of the NBCP provides for criminal prosecution. Any person who violates the provisions of the Code or its implementing rules and regulations may be held liable.

Penalties: Upon conviction, a violator may face a fine of not more than P20,000.00 or imprisonment of not more than two (2) years, or both.
Liability of Professionals: If the violation is committed by a corporation or partnership, the officers (President, Manager, etc.) are held liable. Furthermore, the licenses of the involved architect or engineer may be suspended or revoked by the Professional Regulation Commission (PRC).

4. Demolition of the Structure

Under Section 215 of the NBCP, structures built without a permit that are found to be "dangerous," "ruinous," or in violation of zoning and safety standards may be subject to a Demolition Order.

Illegal Encroachments: If the structure encroaches on public easements or setbacks, the local government unit (LGU) can exercise its police power to order the removal of the structure at the owner's expense.
Non-Compliance: If the owner fails to comply with an order to repair or demolish, the Building Official may undertake the demolition, with the cost assessed against the property owner.

5. Denial of Utility Connections

In the Philippines, a Certificate of Occupancy is required to legally occupy a building and to secure permanent utility connections.

No Permit, No Occupancy: Without a building permit, you cannot obtain a Certificate of Occupancy.
Utility Restrictions: Distribution utilities (such as Meralco for electricity or water providers) are legally prohibited from providing permanent service connections to a structure that does not possess a valid Certificate of Final Inspection and Occupancy.

6. Impact on Property Value and Title

Building without a permit creates "clouds" on the legal status of the property:

Tax Declaration Issues: While the Assessor’s Office may still tax the structure (as taxes are based on the existence of the improvement, regardless of legality), the lack of a permit makes it difficult to update the building’s status on official records.
Inability to Mortgage: Banks and financial institutions require a Building Permit and Certificate of Occupancy as part of their due diligence. You will likely be denied a housing loan or the ability to use the property as collateral.
Sales Complications: Savvy buyers will demand to see the permits. A structure without a permit is often viewed as a liability, significantly lowering the market value of the property.

7. Civil Liability

If a structure built without a permit collapses or causes damage to adjacent properties or injury to persons, the owner faces heightened civil liability. Under the Civil Code of the Philippines, the lack of a permit can be used as evidence of negligence, making it much harder to defend against damage claims or "quasi-delict" lawsuits.