here’ s an article from global property guide last December 2012 on how the Bangko Sentral ng Pilipinas has taken pertinent steps to best monitor the real estate exposure of local banks and prevent a housing bubble.
considering that the Philippine Real Estate Market is at an all time high specially on the residential sector, other government agencies in addition the Bangko Sentral should also adapt measures similar to what other asian countries, particularly, Singapore has done.
Singapore has what they call the Additional Buyer’s Stamp Duty ( this is an increase of 3-10% ) of which the primary goal is to promote sustainable residential property market where prices move in line with economic fundamentals.
ABPD applies to foreigner investors ( additional 10% ), corporations ( subject to higher rate ), permanent residents owning more than one residential property and Singaporeans already owning two residential properties ( additional 3% ). can you imagine the effect this has on the property market in Singapore, obviously an attempt to cool down investments ! it was also met with mixed reactions by the general public.
Since the Philippines is now almost considered investment grade status ( we’ve seen foreign direct investments up by sizable percentage ) and with very competitive interest rates, the Philippine property market continues to attract investors, both local and foreign ( we’ve also noticed the percentage of speculators grow for the past five year years <more so for the last two years>, this then causes the astronomical surge in prices <some locations as much as 45% in one year ). Excessive investment demand will however make the property market cycle more volatile and thus increase the risks to our economy and banking system which will then affect real estate and other related industries.
I understand it is difficult to curb what is good ( philippine real estate is experiencing it’s best years and we’re far off the 1997 global financial crisis ) and I am not saying that the Philippines adapt the same measures Singapore has implemented as what works there may not work here but given the current state of the global economy, we should continue to find ways to stabilize and improve the Philippine economy as this would eventually benefit the Filipino people and its investors in the long run.