Philippine Real Estate News – July 2016

real estate news 42 pr

hello everyone,

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

from manilatimes.net correspondent, Mayvelin U Caraballo :

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BIR cuts Tax Clearance Certificate Requirements

The Bureau of Internal Revenue (BIR) has released two revenue orders it said are meant to align with President Rodrigo Duterte’s call to streamline government process.

The revenue-generating agency said in a statement the new issuances involve the cutting down on red tape in the processing of Tax Clearance Certificates (TCC), and the issuance of Certificates Authorizing Registration (CAR).

Revenue Memorandum Circular (RMC) 74-2016 streamlines the requirements and the process in the issuance of TCCs required under Executive Order 398.

The said issuance mandates that all TCCs shall be processed and released within two working days from the submission of the complete documents.

The number of documentary requirements was also reduced from nine to three.

“Applicants now need only to submit a notarized application form with two pieces of loose Documentary Stamp Tax (DST), Print-out of Certification Fee paid thru the BIR’s Electronic Filing and Payment System (eFPS) with payment confirmation, and Delinquency Verification issued by the concerned BIR office,” it said.

The issuance further requires the issuance of the Delinquency Verification within 24 hours from the filing of the application by the taxpayer and shall have a validity period of one month from the date of issue, it added.

The BIR said criteria for approving applications for TCC shall be governed by existing issuances which includes no unpaid Annual Registration Fee, no open valid “stop-filer” case, user of the eFPS for at least two consecutive months prior to the application for TCC, not tagged as “Cannot Be Located” taxpayer, and no delinquent account.

Meanwhile, Revenue Memorandum Order 41-2016 mandates strict adherence to the BIR’s Citizen Charter and the provisions of Republic Act (RA) 9485, or the Anti-Red Tape Act of 2007 (ARTA), in the processing and issuance of CARs.

The said RMO reiterates the documentary requirements relative to applications for the issuance of CARs covering sale of real property, transfer or assignment of stocks not traded in the stock exchange, transfer subject top donor’s tax, estate tax, and other taxes including DST related to the sale/transfer of properties.

It also specifies the CAR shall be issued five days from the submission of the complete documentary requirements, in contrast to the previous time frame of five to 10 days.

“Officials and employees found to have violated this directive shall be subject to the criminal and administrative penalties provided under the ARTA,” BIR said.

The RMO is in response to complaints raised by taxpayers of CARs issued well beyond the prescribed period, it added.

from interaksyon.com correspondent, Joann Santiago :

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Fitch Ratings cites rising Geopolitical risks in Asia

MANILA, Philippines — Fitch Ratings said geopolitical risks is expected with the rising globalization, thus, the need to keep an orderly international atmosphere to thwart any negative effects.

In a research note, the debt rater said the maritime disputes in the South China Sea (West Philippine Sea) highlight the rising importance of geopolitics on international policy agenda in the Asia Pacific.

“Fitch Ratings believes a shift in the regional and global balance of power mean geopolitical risks will remain prevalent in the long term,” it said, citing that the risks “have the potential to cause significant economic and political instability.”

“Diminishing US geopolitical influence and strength in Asia in the past decade, concurrent with China’s efforts to expand its presence, are fundamentally changing the region’s security paradigm,” it said.

PCA ruling

On July 12, 2016, the Permanent Court of Arbitration based in The Hague, The Netherlands came out with its decision on the case filed by the Philippines against China regarding jurisdiction in some islands in the West Philippine Sea.

In a press release, the Tribunal said it “found that Mischief Reef, Second Thomas Shoal and Reed Bank are submerged at high tide, form part of the exclusive economic zone and continental shelf of the Philippines, and are not overlapped by any possible entitlement of China.”

It also cited that China interfered with Philippine petroleum exploration in Reed Bank, purported to prohibit fishing by Philippine vessels within the Philippines’ exclusive economic zone, protected and failed to prevent Chinese fishermen from fishing within the Philippines’ exclusive economic zone at Mischief Reef and Second Thomas Shoal and constructed installations and artificial islands at Mischief Reef without the authorization of the Philippines.

“The Tribunal therefore concluded that China had violated the Philippines’ sovereign rights with respect to its exclusive economic zone and continental shelf,” it said.

Mischief Reef is also called Panganiban Reef in the Philippines, Second Thomas Shoal is known as Ayungin Shoal and Reed Bank as Recto Bank.

The maritime dispute between the Philippines and China is among the numerous overlapping territorial claims in the region.

Fitch Ratings cited Vietnam’s claims on the South China Sea as well as territorial disputes over uninhabited islands in East China Sea between Japan and China, cross-strait issue between Taiwan and Mainland China, and the North Korea issues.

Terrorism, other security risks

Aside from territorial disputes, the debt rater said terrorism and related security risks are also among the issues in the region that affect drivers of economic growth.

It said recent geopolitical risks in Asia “have largely been constrained” but pointed out that “potential economic implications could be severe in the event of a sudden escalation.”

“Tensions between states could lead to impaired bilateral trade and investment and, depending on the severity, could affect investor confidence,” it said.

Fitch Ratings said these developments “are not currently a direct ratings driver for sovereigns in the region.”

It said developments in Europe, such as the Brexit, will also have an impact on Asia’s markets and economies.

“Nonetheless, Fitch believes deepening globalization in recent decades means incentives to maintain an orderly international environment are powerful,” it added.

from interaksyon :

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IMF Maintains 6% Growth Forecast for Philippines in 2016

MANILA, Philippines — The International Monetary Fund (IMF) maintained its six percent growth forecast for the Philippines this 2016, to be backed by strong macroeconomic fundamentals and supportive monetary conditions.

This was decided after the two-week Article IV mission to the Philippines, conducted by IMF officials from June 28 to July 12, 2016 both in Manila and Davao and headed by Mission chief Chikahisa Sumi.

In a briefing Tuesday, Sumi said the mission team “found out that the Philippine economy is doing well.”

“Growth is strong despite external headwind of trade slowdown, financial market volatility, and the most recent episode of Brexit,” he said.

In the first quarter of the year, the domestic economy registered the second highest growth in Asia with 6.9 percent growth, next to India’s 7.9 percent.

Last May, the multilateral lender issued its Regional Economic Outlook (REO) where it announced its six percent growth forecast for the country this year and 6.2 percent forecast for 2017.

IMF’s growth forecast for the Philippines this year is the lower end of the government’s downwardly revised six to seven percent growth target for the year. Next year’s forecast is lower than the 6.5-7.5 percent target.

Sumi said domestic growth is expected to remain strong, as the Duterte administration has announced its 10-point economic program.

He, however, stressed the importance of further increase in infrastructure investments as well as on social protection programs such as on education and health to ensure that benefits of an expanding economy will be felt by more people.

He said the government has room to increase state deficit to about three percent of gross domestic product (GDP), from the previous administration’s two percent to GDP target, to fund more quality infrastructure programs.

“It has solid foundation from which the country can tackle the remaining challenges. We are quite confident that the new administration can tackle more infrastructure and social spending,” he said.

Sumi said they made some calculations and it showed that an increase of share of deficit to three percent of GDP will be cushioned by the anticipated rise in revenues, even with possible impact of disasters.

He said the additional infrastructure investments will result to higher job generation and encourage private investments, which are expected to be focused on transportation, logistics, and telecommunications , among others.

The planned adjustments in the tax rates are seen to help increase revenues, support more infrastructure and social protection programs and enable the government to hit its long-term growth target of seven to eight percent, he said.

Sumi, meanwhile, raised the need for the Philippine government to maximize the benefits of having a young population otherwise it would be to its disadvantage.

He said ensuring that the country has a good education system and health program are the keys to this situation to address the rise in unemployment rate.

”We need to invest in human capital like education and health so that makes the case for getting the revenue up,” he said.

IMF also sees domestic inflation rate to remain low, with the 2016 average seen at two percent while it is three percent for 2017.

The governments inflation target from 2015-18 is a range between two and four percent. In the first half of the year, rate of price increases averaged at 1.3 percent.

The IMF team also noted the supportive monetary conditions, which Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said is in line with their stance.

Tetangco, however, said they told the IMF mission team about external developments that provided some challenges in the domestic monetary policy-making.

One of these challenges is having excess domestic liquidity, which is being addressed through, among others, the implementation of the interest rate corridor (IRC) starting June this year.

“It’s important for BSP to manage the level of liquidity so that this does not create inflationary pressures. But so far, I think the moves we have taken, the policies we have implemented have so far been successful,” he said.

from goodnewpilipinas.com :

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Palawan, Boracay, Cebu voted World’s Best Islands

Palawan, Boracay, and Cebu topped the votes as the World’s Best Islands 2016 in a survey conducted by leading magazine Travel and Leisure.

Palawan

Palawan, received a score of 93.71, regaining its top rank at No. 1  when it debuted in the list in 2013.

The World’s Best Awards  describes the experience for travelers going to Palawan: “Visitors are greeted with mountains rising out of impossibly turquoise waters, where shipwrecks and reefs make for prime scuba diving and snorkeling.”

The largest Philippine province of Palawan is home to one of the new Seven Wonders of the World, the Puerto Princesa subterranean river, one of the longest underground rivers in the world.

White Beach, Boracay

Boracay with its powdery beaches and grand resorts was at No. 2 spot, earning 90.47 points. The small island in the Visayas group of islands was top ranked in the list in 2012.

The island province of Cebu with its many offerings of beaches, dive spots and recreational activities debuts in the World’s Best Islands list at 6 th spot with a score of 88.65.

Writer Melanie Lieberman wrote, “The Philippines’ predominance shows that discerning travelers are willing to travel great distances for the rewards of clear waters and sugary white beaches.”

from Manila Bulletin correspondent, Maricel Burgonio :

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Grant Thornton Q2 IBR: PH Exports Outlook slightly up for 2017

The Philippines export outlook slightly increased amidst split findings across Asia Pacific due to a slow recovery of the global economy, the Grant Thornton International Business Report (IBR) said.

In its second quarter global business survey report, it said that 2,500 businesses in 36 economies finds a marked split in the export expectations of businesses across the Asia Pacific region.

For the business outlook in exports next year, the Philippines slightly rose to 20 percent in the second quarter from 18 percent in the first quarter.

Philippine exports declined by 3.8 percent year-on-year in May this year to $4.7 billion as export of all commodity groups decreased.  The growth of exports is expected to remain muted for the rest of 2016 with the slow recovery of the global economy, Socioeconomic Planning Secretary Ernesto M. Pernia had said.

Pernia had warned that subdued global economic prospects, weaker-than-expected economic performance of major trading partners, and weather shocks such as La Niña and typhoons remain  risks to the manufacturing sector’s growth.

Thailand, on the other hand,  increased by 10 points from 6 percent to 16 percent while Japan gained 11 points  from 1 percent to 12 percent).

While the region as a whole is expecting an increase in export activity over the next 12 months, mirroring the global outlook, a handful of Asia Pacific economies actually report radically reduced expectations as concerns over currency volatility and world trade take hold.

image: http://www.mb.com.ph/wp-content/uploads/2016/07/Marivic-Espano-2-300×300.jpg

Marivic Españo, Chairperson and CEO of P&A Grant Thornton said, “As the world becomes more interconnected, exports become an important source of growth for large parts of the Asia Pacific business community. This is why it is good to note that despite a global backdrop of economic, social and political uncertainty, for large parts of the community, plans to export more are increasing.”

She said that reduced commodity demand in China also has weakened export prospects and lowered commodity prices creating depreciation for commodity exporting economies such as Malaysia and Australia.

In New Zealand, they are feeling the pinch as their currency appreciates against the Australian Dollar. While Singapore’s status as a trade hub could be feeling the effects of global uncertainty slowing some trade flows.

The reasons for the slump in export plans in these countries differ, but the steps businesses can take to remedy them are consistent. The IBR reveals that Australia, where the currency has weakened, has seen an increase in firms citing exchange rate fluctuations as a constraint on their ability to grow (up 4 points to 16% in Q2). Similar increases are reported in New Zealand (up 8 points to 20%) and Malaysia (up 2 points to 64%).

Overall business optimism increased across Asia Pacific in the second quarter rose from 21 percent to 28 percent. The Philippines, in particular, has the highest business optimism at 94 percent, increasing by 38 points.  However, this was measured before the UK voted to leave the European Union.

“Although the UK’s decision to leave the European Union may not directly impact many businesses across Asia Pacific, it could do so indirectly – for example, if markets continue to be volatile as a result of the decision,” adds Espano.

“When thinking about the threats and opportunities that a Brexit could create, and planning how to create and protect value, it may be worth considering any short, medium and long term implications for issues like people and talent, exports and imports, strategic ambitions, financing, risk, operations and protecting investment. This will also help guard against unexpected shocks which could derail long-term growth prospects.”

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robert
Robert G. Sarmiento Properties
Professional Affiliation :
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