here’s some “select” articles about Philippine Real Estate and Economy from various newspaper correspondents for your reference.
from The Associated Press correspondent, Teresa Cerojano :
Asia’s ‘infrastructure gap’
LOOKING out at bumper-to-bumper Monday-morning traffic crawling along the Philippine capital’s main avenue, taxi driver Ranilo Bañez shook his head in frustration.
Congestion has gotten so bad as the economy grew, he said, that a 10-kilometer trip that once took 30 minutes can stretch to two hours.
“We lose so much,” said Bañez, 64. “We waste a lot of gasoline and time.”Congestion has gotten so bad as the economy grew, he said, that a 10-kilometer trip that once took 30 minutes can stretch to two hours.
The Philippines is far from alone. The outpouring of support for a Chinese-led bank to finance infrastructure highlights a gap in Asia’s success story: From power-starved India to Thailand’s overburdened railways, developing economies face a shortage of basic facilities so severe that it threatens to hold back growth and living standards.
Manila and other cities are choked with construction sites for office and apartment towers. But spending on roads, railways and other unglamorous but essential infrastructure collapsed after the 1997 financial crisis and has yet to recover.
“The catch-up they need to do is still considerable,” said Ramesh Subramaniam, director general of the Asian Development Bank’s (ADB) Southeast Asia department.
If spending fails to pick up, “then this could possibly have an impact on future growth,” he said. “Certainly, it is going to reduce the competitiveness of the countries in the region.”
On top of its planned infrastructure bank, which 57 countries want to join, the government of President Xi Jinping has launched initiatives to improve road, rail and sea links.That gap has given Beijing a chance to assert its ambition to be a regional leader and fueled a diplomatic alms race.
Japan joined Washington in staying away from the Chinese bank. Instead, Tokyo responded in June by announcing its own credit package of $110 billion for the region.
The ADB has estimated developing Asian economies need to invest $8 trillion in the decade through 2020, or some 80 times the planned $100-billion capital of Beijing’s bank.
India is set to pass China this year as the world’s fastest-growing big economy. To keep that up, its government says, the nation of 1.2 billion people needs to spend $1 trillion on infrastructure in the five years through 2017.
Prime Minister Narendra Modi called in May for India to speed up building “all projects that will ensure a modern infrastructure backbone.”
India’s most ambitious initiative is the $100-billion Delhi-Mumbai Industrial Corridor Project. It calls for creating seven industrial cities, high-speed railways, six airports and three sea ports.
In Vietnam the ruling Communist Party in June approved a proposal for a $15.8-billion second airport for its business capital, Ho Chi Minh City.
Nationwide, the government says India needs 450 new coal-fired power plants. It also plans a $10.2-billion high-speed train to link Mumbai, the financial capital, with Ahmedabad, an industrial city to the north.
To meet power demand that rises by 10 percent a year, state media say Vietnam needs to spend $50 billion in the decade through 2020 and another $75 billion over the next decade. They put Vietnam’s spending needs for highways at $22.5 billion in 2015-2020.
Thailand has a 3-trillion-baht ($92-billion) building plan for 2015-2022 that includes high-speed train routes that eventually will stretch from China in the north through Malaysia in the south to Singapore. It calls for expanding seaports and Bangkok’s commuter trains.
In the Philippines President Aquino in May approved $1.4 billion in spending for seven projects, including commuter rail in Manila, upgrading 339 km of national roads and irrigation for 70,000 hectares of farmland.
Bjorn Pardo, founder and CEO of Xend, a delivery company in the Philippines with 250 employees, said it copes with congestion by using custom-outfitted motorcycles instead of trucks.
“The traffic situation will not get significantly better anytime soon,” Pardo said in an e-mail.
The Philippines ranks 95th out of 144 countries on a World Economic Forum survey of infrastructure quality. Its 2011-2016 development plan promises to reduce the number of homes without access to power and running water and build ports, railways, power plants and cargo terminals.
“Our priority will be energy,” said Benjamin Diokno, an economist at the University of the Philippines and former Cabinet secretary. “The urban rail system is also pressing. The railway system from north to south is pressing. Everything is pressing.”
The ADB says if the required facilities are built, the region’s people could get an extra $4.5 trillion in income in the decade through 2020 and another $8.5 trillion after that.
Many have yet to work out how to pay for those projects.
Before the 1997 crisis, public-works spending in many developing Asian economies was equal to 6 percent to 8 percent of annual economic output.
Postcrisis, that tumbled to as little as 2 percent. It dipped below 1 percent in the Philippines in 2010. Today it is below 3 percent in Indonesia, Pakistan and other economies—less than half the level the ADB says is needed to support growth at current levels.
In the Indonesian capital, Jakarta, courier Yusuf Abdillah complained he loses two hours a day in traffic jams that can stretch up to 8 km.
“I’m fed up,” said Abdillah. “The government is being irresponsible.”
Many governments want to draw in money from pension funds, insurance companies and other
The Philippines hopes encouraging private investment will help boost infrastructure spending from 3.4 percent of gross domestic product this year to 5 percent next year, according to Economic Planning Secretary Arsenio M. Balisacan.
But many projects have yet to be structured as profit-oriented ventures to repay investors. And investors are wary of political interference and potential delays over environmental and other concerns.
China has pledged to supply most of the initial $50 billion in capital for its Asian Infrastructure Investment Bank.
In June governments, including Britain, New Zealand, France, Australia and South Korea, signed an agreement on the bank’s basic principles.
Still, the ADB’s Subramaniam said the region’s total spending is likely to be less than half the amount required.
“The continuing unmet needs clearly indicate we need more resources and different ways of structuring projects,” he said.
from The Philippine Star’s correspondent : Danessa O. Rivera
Foreign ownership limits hinder Phl growth potential
MANILA, Philippines – Restrictions in foreign ownership of land and uneven investments in public infrastructure continue to prevent the country from realizing its full economic potential, according to a former National Economic and Development Authority (NEDA) chief.
University of the Philippines economist Dr. Gerardo P. Sicat, the first director general of NEDA, underscored the implications of these policy issues that hinder national development in his recent visit to the NEDA Regional Office in Northern Mindanao.
These include restricting foreign nationals to own land, investing in public infrastructure, and prohibiting them to utilize the country’s natural resources.
“More restrictions on policies such as disallowing foreign capital in public utilities made us unable to exactly generate the kind of activities that need to happen,” Sicat said.
The former NEDA chief stressed that foreign investors have greater capacity and capability to contribute to the country’s development.
Under Article 7 of the Philippine Constitution, foreign investors are prohibited to own more than 40 percent of real properties and businesses, while they are totally restricted to exploit natural resources and own any company in the media industry.
The House of Representatives is eyeing to approve the economic Charter change resolution authored by Speaker Feliciano Belmonte Jr. within the week.
The resolution seeks to insert the phrase “unless otherwise provided by law” in the pertinent provisions of the Constitution that limit foreign ownership of certain businesses and land.
Meanwhile, the Senate is open to debates on the economic resolution once the Lower House passes the measure.
In terms of infrastructure, Sicat said most of these such as roads have greatly improved, but there are also areas that depict persistent poverty.
He noted that there is a need to continually improve roads for industries to come in and generate employment.
“Planning is not only a work of NEDA but of all important institutions integrated into one,” he added.
Sicat is currently undertaking a study on how the Philippines has improved and the bottlenecks that impede regional developments.
from Manila Bulletin’s correspondent, by Madelaine B. Miraflor :
The value of the hotel-branded residential units in the Philippines has now gone up to P158 billion as the partnership between international hospitality brands and local developers tightened over the past years, signifying a growing global interest towards the country’s real estate.
A new research done by Asia-based hospitality consulting group C9 Hotelworks showed that Southeast Asia’s hotel residences real estate market is now at a record level of P749 billion, P158 billion of which is for sale in the Philippines.
As of now, there are currently over 28,000 hotel branded residential units for sale across seven Southeast Asian nations, represented by nearly 120 projects. In the Philippines, the market-size is reflected in a supply of over 11,000 residential units.
“One key catalyst for the rising tide has been an increasing number of mixed use projects that contain hotel and real estate components… Brand dogma has firmly attached itself to the symbiotic hotel and real estate partnership,” the research showed.
The top two locations in the country for hotel residences are Metro Manila, followed by Boracay.
Meanwhile, while the average price per square meter for urban properties is around P196,547 a square meter, in resort destinations, the value of property slightly decreases to P189,276.
“The historic pattern of hotel and real estate marriages has moved away from the beach and leisure destinations and is gaining traction in urban city offerings. Traditional lifestyle buyers are being supplanted by end users, with Asian’s representing the largest transaction segment,” C9’s Managing Director Bill Barnett said.
In Metro Manila, the Shangri-La Group has a long history of quality real estate driven developments, while new projects such as the Raffles Residences and Grand Hyatt Residences have demonstrated strong sale pace and high-pricing points.
Broader upscale and midscale offerings are also now creating a wider presence such as the Citadines tie-up at CDD Millennium Ortigas and the investment driven yields from hotel rentals at Hotel 101 and Lancaster the Atrium.
“What is clear in looking at the landscape is that rapidly escalating land prices are driving developers to embrace mixed-use projects in increasing numbers, and often add in commercial, sporting and tourism attractions as part of broader lifestyle offerings,” the data showed.
Century Properties, according to C9, has been a large proponent of this trend embracing not only hotel brands with their recent Novotel Suites affiliation with the French hospitality group ACCOR but also tapping into designer and celebrity brands ranging from Trump, to Philippe Starck, Armani and even Paris Hilton.
Moving forward, a growing number of new projects coming into the Philippines will still include hotel brand alliances.
from Rappler.com :
Philippines immune from China slowdown, HSBC says
MANILA. Philippines — The Philippines is immune from external shocks, particularly from China’s economic slowdown, the HongKong and Shanghai Banking Corporation ( HSBC ) said.
In its latest Global Research entitled Commodity Concerns Dominate, HSBC economist James Pomeroy said the Philippines is among the emerging market (EM) countries that are immune from the economic slowdown in China.
“The Philippines is one of the few EM countries relatively unexposed to a slowdown in Chinese growth and lower commodity prices,” Pomeroy said.
China is stilll a major source of imports of the Philippines.
Imports from China increased by 8% to $5.98 billion from January to July this year, from $5.54 billion in the same period in 2014.
Exports to China, meanwhile, dipped 24.1% to $4.56 billion in the first 7 months of 2015, from $6.02 billion in the same period last year. (READ: China’s economic slowdown : A double-edged impact on PH )
“Trade in goods (and especially commodities) plays a small part in exports and so the same risks to growth do not exist,” Pomeroy said in the report.
The Philippine Peso has outperformed other currencies, according to the HSBC economist.
“This has been reflected in the relative outperformance of the Philippine peso, as the Philippines has avoided much of the turmoil in financial markets,” Pomeroy said.
The report considered a broad range of indicators to look for warning signs in 40 development and emerging market economies.
“We are less concerned about the Philippines than we were, given the relative immunity from a slowdown in China,” Pomeroy said.
Unlike the Philippines, HSBC said capital flight has hurt Malaysia and Indonesia because of lower commodity prices.
“Commodity weakness has also hurt, and foreign exchange reserves are being depleted, and current account balances are in deficit or have dropped substantially,” the report read.
According to the HSBC report, “by being close to China, both geographically and in terms of trade linkages the downturn in Chinese data has hit sentiment.”
It added, buoyant asset prices and high levels of household debt are also hurting Sweden and Norway.
“Both countries suffer from high levels of household debt, rising house prices and have central banks that have cut policy rates to record lows. This leaves them vulnerable to financial stability risks that could leave the economies exposed to any downturn or, at some later stage, a rise in rates,” HSBC said.
In the Philippines, “the run-ups in asset prices that we had seen have cooled, and so our concerns have abated,” Pomeroy said.
China’s economic growth slid below 7% for the first time since the global financial crisis.
Growth of China, the world’s second largest economy, went up by 6.9% in the third quarter of the year, its lowest since the first quarter of 2009, when it slowed to 6.2%. – Rappler.com
from Interaksyon’s correspondent, Victor C. Agustin :
Zamora sues Gatchalian, says he owns Valenzuela’s 11-hectare relocation site
House Minority Leader Ronaldo Zamora has thrown a monkey wrench into the plan of Valenzuela Mayor Rexlon Gatchalian to relocate squatters in an 11-hectare expropriated site.
Zamora late last month managed to secure a favorable Court of Appeals decision as a last-minute intervenor, suing the mayor and the Valenzuela government over their expropriation of what is now known as the Disiplina Village-Bignay.
The congressman from San Juan, whose office did not respond to emails seeking comment, told the appellate court that he acquired the rights to the property in 2011 from long-time owners/claimants Zenaida Tuazon-Dayrit and the late Judge D. Roy Masadao.
The same property, incidentally, is also being claimed by Philippine Shares Corp., said to be a company belonging to the BF Homes Group.
According to court records, Valenzuela was already readying the release last December of a P5-million check, representing 15 percent of the expropriation price, to Philippine Shares Corp. when Zamora sprang the surprise intervention.
As a result, CA Justices Rosmari Carandang, Mario Lopez and Eduardo Peralta Jr. remanded the case back to Valenzuela Regional Trial Court Judge Lilia Encarnacion Gepty, reinstating the action to quiet title while hearing the related expropriation case.
The Valenzuela judge had earlier denied Zamora’s intervention, saying his belated entry would only further delay the 13-year-long proceedings in addition to his not being a party to the cases.
But the three appellate justices, saying they could not leave Zamora without any remedy to pursue his “transfereependente lite” claim over technicalities, overruled the Valenzuela judge.
According to a City Hall official, the prolonged litigation itself will not impact on the Gatchalian plan to develop Disiplina Village-Bignay as Metro Manila’s largest in-city relocation project for riverbank dwellers.
The first 1,000 families are slated to move into the government-built, low-rise buildings by January, paying P300 a month in rent for each unit to developer National Housing Authority.
When completed by end-2016, the 11-hectare village will house over 3,000 families, who shall have been relocated from flimsy shanties built on the riverbanks of Tullahan, Polo and Meycauayan rivers.
According to the NHA-Valenzuela plan, Disiplina Village-Bignay will have its own elementary and high schools as well its own market, transport terminal, four basketball courts, health center, church, fire station, police precinct, mortuary, three day-care centers, two playgrounds, two parks, and a garbage sorting and recovery facility.
In the meantime, City Hall in compliance with the new CA order will deposit the P33.33 million expropriation cost to the court, which will hold the amount in escrow, until after it shall have decided as to who really owns the land.
“Once the ownership dispute is settled, the monetary proceeds of the expropriation will be turned over to the winning party,” a City Hall official said.
Have a great day !
Robert G. Sarmiento Properties
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