Philippine Real Estate News – May 2016

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hello everyone,

here’s some select articles about Philippine Real Estate and our Economy from various newspaper correspondents that matters for your reference.

from Philippine Daily Inquirer’s correspondent, Tessa R. Salazar :

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Property sector momentum sustained even after elections

With a little over two weeks to go before the national and local elections, property analysts have weighed in on how each of the Presidential candidates will affect the real estate sector.“I was very disappointed with the candidates as they neglected the housing sector in their policy platforms. Not one of the presidential candidates highlighted the importance of the housing sector in their platforms. Most of the rhetoric focused on public infrastructure, technology, peace and order and employment but there were no specific mention of an integrated, compelling and institutional housing plan that can change the industry for the better,” lamented Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory.Monique Cornelio-Pronove, CEO of Pronove Tai International Property Consultants, asserted: “Regardless who among them wins, the real estate market will continue its upward trajectory as the economic fundamentals of the country remain strong. The current administration leaves behind a healthy fiscal reserve that the new administration must now spend to build more roads, rail and improve as well as add more airports and ports around the country. We have a robust young population with a median age of 25 years that has the capacity to spend, and this drives the retail market. The services sector continues to expand, thus providing employment to our graduates. We have the confidence of the international community and the challenges we face on infrastructure provides a lot of opportunity for investments. Whoever wins the election, the real estate market will continue to be in good stead.”Claro dG. Cordero Jr., Jones Lang LaSalle Philippines associate director and head of research, consulting and valuation, said: “Our view is that real estate will continue to project an upward growth trajectory regardless of who will sit in office after the elections. The property indicators and demand drivers, specifically, the BPO industry and the remittances coming from overseas Filipinos, will continue to flow and pump prime the consumer industries and positively influence the growth of new investments in the country. While the general direction will be the same, the rate of growth might just be different as each candidate will need to deal with their respective issues that might sidetrack the prioritization of urgent laws and policies to create a more favorable real estate investment environment.” World’s top economies

“If the next President and the new set of leaders address more effectively corruption, criminality, climate change, poverty, pollution, too much politics, the police, housing, healthcare, agriculture, armed forces, transportation, traffic, infrastructure and incompetence, the Philippines will be in the top 20 economies of the world by 2021 when we celebrate 500 years as a Christian nation, adopting western civilization with our Asian Filipino culture,” enumerated architect and urban planner Felino Palafox Jr., National Real Estate Association chair and Palafox Architecture Group Inc. president.

Palafox added: “We hope and pray the next President will have visionary leadership, strong political will, will listen and apply good planning, good design, and good governance. He or she must not be intellectually and integrity challenged. He or she must have the skills and the heart to lead and manage the Philippines well into the 21st century.”

“Grace Poe and Rodrigo Duterte both requested us advice on urban planning. Jejomar Binay and Mar Roxas asked for my support. All of the four have good platforms. I will vote for the one who has the heart and the skills to address (national) issues,” said Palafox.

“Clearly, the property sector has been on a long and sustained momentum. It has always been a pillar and a major contributor to the country’s economic growth. It also directly benefits 52 major industries. On top of that it has services as a major component. Every house constructed has a direct contribution to the growth of steel, wood, labor and financing. But no one highlighted the importance of the sector. And it’s not a good sign,” said Soriano.

Soriano shared his observations on the five candidates.

“A solid accomplishment initiated by Roxas was the creation of the IT and BPO industry. He authored RA 8756, encouraging multinational companies to establish headquarters in the Philippines through incentives. Clearly, a major segment that has contributed significantly to the sustained growth of the current real estate market. Roxas’ support for the BPO sector helped this industry become a key driver in the residential and commercial sector. Roxas proposes an adequate, affordable and accessible housing program, complete with basic necessities.”

 No housing plan

Soriano said that Poe has no housing plan in her 20-point platforms. “She highlights infrastructure and technology as pathways to growth but no mention of a housing policy that can be the centerpiece of her administration,” said Soriano.

Soriano said that Duterte “is looking at the creation of business and economic hubs to host major industries and their factories, patterned after Singapore and Hong Kong to stem the tide of unemployment.”

“The closest connection to real estate was his avowed mission to revive the Philippine steel industry. Foreign investments:  Infrastructure gaps, whether in the countryside or in key urban centers, shall be prioritized and substantially filled, or at least initiated, during his term. He has no specific program on housing and real estate,” said Soriano.

Soriano said that Miriam Defensor Santiago “highlights public infrastructure to help facilitate rapid economic growth.”

“Some of her plans would be to develop: Mixed-use government centers with adjacent residential, commercial, and entertainment facilities in the National Capital Region and in the 17 regions. One major project per region and per province. Still no mention of an institutional housing program,” said Soriano.

Soriano said that Binay’s plans include accelerating infrastructure development, and invest more in infrastructure.

“Under a Binay presidency, his goals are to strengthen substantially the sectors of agriculture, manufacturing, tourism, BPO, and exporting—which are the five biggest job generators. Again no specific housing initiatives despite his almost five years as chair of the HUDCC,” said Soriano.

#VotePH2016: The Inquirer multimedia coverage of the 2016 national and local elections in the Philippines provides to voters the latest news, photos, videos and infographics on the candidates and their platforms, as well as real-time election results come May 9, 2016. Visit our special Elections 2016 site here: http://www.inquirer.net/elections2016.

from Business Mirror correspondent, Henry Empeno :

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Firm turning abandoned Subic hotel-casino into BPO, support center for online gaming

SUBIC BAY FREEPORT—After a decade of neglect, the former Legenda Hotel and Casino here is now being transformed by an online-gaming company into an offshore support facility.

Subic Bay Metropolitan Authority (SBMA) Chairman Roberto Garcia said the once-popular Subic attraction for high-rollers has been taken over by Tele Empire, a company that will engage in business-process outsourcing (BPO) and support services for online gaming.

The new operator will pay rent for the whole property at an appraised value of P3.6 million a month, Garcia said.

“We got a very good deal here because for a long time, the Legenda Hotel has been a huge eyesore right in the middle of Subic’s business district,” Garcia said in a recent media briefing.

“Now we’re getting rid of this eyesore and getting good money for it, at the same time,” he said.

The former haven for high-rollers sits on one whole block of prime land along the Waterfront Road, right next to Building 229, which houses the main offices of the SBMA.

The Malaysian-owned Legend International Resorts Ltd. Co. (LIRL) started operating the casino-hotel in 1993 with a $130-million investment.

However, the state-owned Philippine Amusement and Gaming Corp. (Pagcor) padlocked the Legenda casino in May 2006 for nonpayment of arrears amounting to P365 million.

The LIRL claimed its casino has been operating at a net loss, but Pagcor said its special audit team discovered Legenda was charging expenses in its non-casino operations to its casino operation.

The SBMA has worked on a debt-restructuring scheme with the LIRL management, but the firm did not comply with it, thus, ending up with unpaid obligations to the SBMA amounting to P850 million, records indicated.

After the last employees left in 2009, the hotel building was left to the elements. Last year its derelict façade became the backdrop of a Halloween costume-show organized by SBMA employees.

As of now, the new operator has stripped the facility bare of the furniture and fixtures that remained in the abandoned building.

“It’s already being repaired,” Garcia said.

The SBMA official said while the new operator will provide support services for online gaming, no actual gambling will be done at the Subic premises.

“I will not allow it,” Garcia said.

from Business Mirror correspondent, VG Cabuag :

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8990 sees doubling of revenues in 2017 as NCR projects pick up

OSAKA, Japan—8990 Holdings Inc., a developer of mass-housing projects, said it may reach its goal of doubling its revenues by 2017 from this year’s target as its Metro Manila projects are seen to be performing well.

Januario Jesus Gregorio Atencio III, the company’s president and CEO, said the company is “seriously studying” and reviewing its figures as the company has now a “better feel” of its Metro Manila projects of mostly high-rise condominium projects and some with retail space.

“We are actually trying to find the way if we can grow 100 percent in 2017 [from this year]. We are looking very hard, studying very hard how we can double [our revenues],” Atencio said.

Atencio added that the company’s revenues are growing at about 20 percent annually since it went public in 2014.

For this year, it is targeting 24 percent increase to P12 billion from last year’s P9.65 billion.

At that pace of growth, the company’s revenues will increase to P14 billion by 2017. But Atencio said that amount is only being produced by its provincial project, as evidenced by last year’s figures.

“Another P14 billion will now be NCR [National Capital Region], Metro Manila. If I am able to do that, so this year’s P12 billion [in revenues] becomes P28 billion by next year,” Atencio said.

“I got the landbank I need to pull it off at 500 hectares,” he said.

The landbank came from the accumulated property it had over the years.

Its Metro Manila projects include a complex of high-rise residential buildings in Vitas in Tondo,  Manila, and another in Ortigas Extension in Pasig. Both projects include a small shopping mall, which 8990 itself will operate.

Of the two, only the Tondo, Manila, project has broke ground and the company still has to sell the units there. 8990, meanwhile, still has to start the Ortigas project.

It also has a stand-alone condominium projects in Mandaluyong and another in Cubao in Quezon City. Atencio said the company also has a string of land acquisition, just like the Las Piñas lot that the company plans to spend some P3 billion to also develop a complex of residential and commercial buildings.

8990 is launching some 14 new projects with a total of 75,000 residential units all over the country this year, though the first phase will only cover 7,000 units with a combined sales worth P7.2 billion. 8990 units average of P1 million.

Sales from previously-launched projects are expected to take up the slack of the 2016 target, bringing the company’s sales to the P12-billion goal.

The projects include horizontal developments under the Deca Homes brand in Bulacan, Iloilo, Cebu, Davao and Bacolod, as well as medium-rise building projects under the Urban Deca Homes in Cavite, Cebu and Manila.

Last year, the company booked an income growth of 23 percent to P4.05 billion, from the previous P3.31 billion on the back of the company’s sales and delivery of projects from its development all over the country.

Core business income, which comprises housing and contract to sell net revenues, breached the P10-billion mark with P10.7 billion, from P8.4 billion last year, registering a 27-percent increase.

Income from contract to sell receivables jumped 33 percent to P1.2 billion from P900 million.

Atencio said about 85 percent of total revenues came from its brand of subdivisions located in Cavite, Pampanga, Iloilo, Davao and General Santos, while 15 percent were contributed by medium-rise projects in Cebu and Muntinlupa.

from Interaksyon’s Philippine News Agency :

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EFTA abolishes all customs duties for PHL products with new free trade pact

MANILA – Philippine products, including industrial goods as well as fish and other marine products, can access European Free Trade Association (EFTA) States duty-free after the two parties signed a free trade agreement (FTA).

“With the entry into force of the Agreement, the EFTA States abolish all customs duties on imports of industrial products, including fish and other marine products, originating in the Philippines,” EFTA said.

On Thursday, the EFTA-Philippines FTA was signed in Bern, Switzerland by Trade Secretary Adrian S. Cristobal Jr., President of Swiss Confederation Johann N. Schneider-Amman, Iceland Ambassador Martin Eyjólfsson, Minister of Foreign Affairs of Liechtenstein Aurelia Frick, and State Secretary of Ministry of Trade, Industry and Fisheries of Norway Dilek Ayhan.

In return, the Philippines will gradually eliminate customs duties on industrial products, including fish and other marine products from EFTA.

The EFTA-Philippines FTA will also boost trade in services including sectors of finance, telecommunication, movement of natural persons, and maritime transport.

Under the FTA, the two parties agreed to cooperate in trade facilitation to comply with international standards and high quality of public service.

The FTA text also noted simplification of international trade procedures under its agreement on trade facilitation.

“The Parties shall apply trade and border procedures that are simple, reasonable and impartial,” the FTA text stated.

“The Parties shall limit controls, formalities and the number of documents required in the context of trade in goods between the Parties to those necessary and appropriate to ensure compliance with legal requirements and thereby simplify to the greatest extent possible the respective procedure,” it added.

Trade of goods between EFTA and the Philippines grew at an average annual rate of 11 percent between 2005 and 2015.

Total bilateral merchandise trade reached US$863 million, with Philippine exports to EFTA at US$456 million and imports from EFTA countries at US$407 million.

Top exports of the country to EFTA include precious metals such as gold, electronic parts and dental prosthesis, electrical machinery and medical instruments. Philippine imports include pharmaceuticals, clocks and watches, and machinery.

EFTA considers the Philippines as a significant market and one of the fastest and most resilient countries in Asia.

Combined GDP of EFTA States reached US$1.2 trillion despite having only a population of 13 million.

from Manila Bulletin correspondent, Lee C. Chipongian :

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Remittance flows hampered by foreign bank restrictions

Foreign banks’ restrictions on remittance processes – a move to curtail threats of money laundering and terrorist financing – has been having an adverse impact on the cost of fund transfers for overseas Filipinos.

 

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. called this a “de-risking strategy” of foreign banks or foreign correspondent banks of money transfer operators (MTOs). It is an issue that has long been in existence even before the $81 million bank heist that hit at least one local bank.

During yesterday’s Financial Inclusion Summit at the central bank, Tetangco tackled the issue that has been briefly noted during the money laundering hearings at the Senate these past weeks, which is the closure of accounts of several MTOs and its negative effect on remittance costs and flows.

Tetangco said that for some time, correspondent banks have been limiting their exposure to “possible channels” for money laundering and other financial crimes.

“This is a de-risking strategy largely driven by business decisions of foreign banks, weighing the risks and benefits of dealing with remittance companies. This has been going on in recent years and has not been helped by the present money laundering case here,” said Tetangco. “Since the closures limit the players that can competitively operate in the remittance market, this has the potential to reverse the steady gains we have made in reducing remittance costs.”

Tetangco said de-risking resulted to a rise in the informal remittance channels a “subsequent financial exclusion.” “In the end, this may exact an even larger toll on the overseas Filipinos and their families in terms of deprivation of access to safe and reliable financial services.”

The Philippines has already raised this issue before several groups including the Financial Action Task Force, Alliance for Financial Inclusion, the Global Partnership for Financial Inclusion of the G20, the US Department of Treasury, the Financial Stability Board, and the World Bank.

More efforts are being done on the government side such as adherence to the

National Risk Assessment or NRA, an inter-agency group that evaluates’ the country’s money laundering and terrorist financing “vulnerabilities and weaknesses.”

Tetangco said to address the issue of costs, overseas Filipinos are tapping the financial technology companies or Fintechs, smart phones and online money transfer services such as those linked to Facebook.

“Customer acceptance of these developments seems likely,” he noted, citing a global survey that  83 percent of consumers in the seven remittance corridors including US-Philippines, are using mobile money.

Overseas Filipinos’ remittances, from 2005 to 2015, have reached over $228 billion, both personal and cash (or bank transfer) remittances.

The estimated 10 million overseas Filipinos are sending money that is equivalent to about 9.8 percent of the country’s gross domestic product.

from Manila Times correspondent, Catherine A. Talavera

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Property sector fastest-growing in Q4

The country’s real estate sector was the fastest growing industry in terms of gross revenue during the fourth quarter of last year, according to the Philippine Statistics Authority (PSA).

PSA’s Total Gross Revenue Index for the last quarter of 2015 inched up by 5.9 percent with the growth being driven by the real estate sector growing at 12.7 percent from the 7.5 percent expansion registered in the same period of last year.

This was followed by the Transpotation and Communication industry with a 9.9 percent growth rate.

“All other industries posted positive growth but at a slower pace when compared with the same quarter last year,” PSA noted.

Finance slowed down to 8.5 percent from a 10.2 percent growth a year earlier, Trade registered 6.7 percent growth from 7.7 percent, Manufacturing stood at 3.5 percent from 8.8 percent growth, and Private Services at 2.4 percent, sharply slower than its 9.2 percent expansion in Q4 2014.

Meanwhile, the real estate industry was also the top gainer in the Total Employment Index, with a growth of 11.3 percent from the 10.2 percent growth registered in the same quarter of the previous year.

Industries such as the manufacturing sector and private services also showed signs of employment growth but at a slower rates of 4.4 percent and 3.5 percent, respectively.

In contrast, two industries posted negative movement during the quarter. Trade contracted 0.8 percent, accelerating from a contraction of 0.6 percent posted in the same quarter of 2014, and Mining and Quarrying suffered a 5.4 percent decline, reversing a year-earlier growth of 4.0 percent.

PSA noted that those declines pulled the full index down, resulting in slower-paced overall growth of 3.4 percent from the prior year’s 4.5 percent.

The real estate industry was also the fastest growing industry in the Total Compensation Index, as it grew 16.7 percent, nearly double the previous year’s 8.5 percent growth.

Private Services also posted growth, but at a slower pace of 8.6 percent from the 10.2 percent growth a year earlier.

“Mining and Quarrying on the other hand pulled down the total compensation index with a 9.1 percent decline from the 9.9 percent drop a year earlier,” PSA said.

The total compensation index grew, but at slower pace of 6.1 percent from 8.0 percent posted in the same period a year earlier.

Futhermore, with the slowdown of both employment and compensation, PSA said the total compensation per employee index decelerated to 2.7 percent growth from 3.3 percent.

“Slowdowns were noted in Manufacturing, at 2.9 percent from 3.9 percent and Transportation and Communication at 1.8 percent from 5.1 percent,” PSA said.

from Manila Bulletin :

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SM’s 57th mall opens in San Jose del Monte April 29

SM City San Jose del Monte opens its doors to the public tomorrow, Friday, April 29, as SM Prime Holdings’s 57th mall, and the third in the province of Bulacan after SM City Marilao and SM City Baliwag.

Located on a 60,193-sqm site in Barangay Tungkong Mangga along Quirino Highway, the latest SM City presents a 101,407.28 sqm

 

five-level mall with three levels of retail, and two levels of basement parking and a pond area. It will serve shoppers in San Jose del Monte City and nearby towns in Bulacan, North Metro cities like Caloocan and Quezon City, as well as several areas in Rizal.

Located at the northeast periphery of Metro Manila, the San Jose del Monte City is bounded by the Bulacan municipalities of Marilao and Santa Maria on the west, and Norzagaray on the North. Quezon province lies to the east, Rizal province to its southeast, and Caloocan City to its south.

Known as the “balcony of the metro,” San Jose del Monte is the largest town in Bulacan in terms of land area and population.  It was proclaimed the first city of Bulacan on Sept. 10, 2000. Its proximity to Manila and Quezon City has made the place ideal for quiet and peaceful living.

The place is hilly, with the Sierra Madre Mountains providing a panoramic backdrop to the area. With that, it continues to grow as private subdivisions mushroom in strategic areas, and it develops as an ideal industrial site.

Because of its prime location for enterprise and investments, growing residential and commercial developments, as well as satisfactory

 

infrastructure and support facilities, San Jose del Monte is considered as one of the thriving cities for doing business in the country. The opening of SM City San Jose del Monte highlights SM’s confidence in the city’s booming economy, and will be a catalyst for employment and business opportunities.

SM City San Jose del Monte’s carefully integrated architecture, landscape, and planning will ensure a convenient urban experience for its customers. The exterior architectural design is sophisticated and bold, featuring crisp colors and textures. A striking West Plaza has a monumental presence along Quirino Highway, featuring a stepped water feature, and eye- catching signage that welcomes shoppers at the mall entrance.

The rear of the site overlooks a vibrant natural landscape. The dining balconies overlook a public plaza and graceful parkway. The plaza, with its water features, central pond, and pedestrian bridge, will provide shoppers a place to relax and take in the views.

SM City San Jose del Monte’s interiors are organized around a central atrium that terraces back at each level, allowing natural clerestory light to reach deep into the building. Pedestrian bridges cross the atrium on each floor, while stairs, elevators, and escalators traverse the space vertically, contributing to the dynamic feel of the interior. The space is further accentuated by vivid bands of color which give the space a festive, contemporary appearance.

The SM Store and SM Supermarket are the mall’s major retail anchors, leading the way with SM mainstays like SM Appliance Center, Watsons, Ace Hardware, Surplus, and BDO. There is more shopping fun ahead with the many fashion boutiques like For Me, Penshoppe, Bench, EMO, Oxygen, Regatta, Genevieve Gozum, Mendrez, Dickies, Shapes, Mint open together with Baby stores like Osh Kosh B’ Gosh and Chicabootie ; jewelry stores like Silverworks, Unisilver, Timedepot; eyewear stores like Executive Optical, Yes Optical and Ideal Vision .

The mall’s Cyberzone will be an attraction in this growing city with major players GLOBE, Samsung, Huawei, O+, Oppo, My Phone as well as Electroworld; as well as computer store like PC Express, Comworks, Mega One, Technokid, Citylight Telecom and Octagon.

Three alfresco dining areas will make dining a pleasant experience while eating out options will give shoppers a lot to choose from. These include international chains like, Mc Donalds, Dunkin Donuts, Coffee Bean and Tea Leaf, KFC, Kenny Rogers, Hap Chan, Yoshinoya; as well major national chains like Bagnetified, Mang Inasal, Jollibee, Gerry’s Grill, Infinitea, Cabalen, Greenwich, Chowking, Red Ribbon, Max’s Kuya J, Bonchon, Pancake House, Yellow Cab, Shakey’s, Wings and Wedges, Wonderbake, Fatboy’s Pizza.

SM City San Jose del Monte will also have four state-of-the-art digital cinemas; as well as amusement centers like Quantum, Power Ville Fun Ride, and World of Fun. Health and wellness centers like Borough Medical Care Institute, Dermcare, Forever Flawless, Nails Glow Hand and Foot Spa, Let’s Face it, Nuat Thai Foot and Body Massage complete the malling experience.

For customer convenience, the mall will have 805 vehicle parking slots and 107 motorcycle parking slots as well as transport bays.

The new mall’s design team is composed of DSGN Associates and New Golden City Builders, general contractor and EDD Construction, project managers.

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robert
Robert G. Sarmiento Properties
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