hello everyone,
Here’s some select articles about Philippine Real Estate and our Economy from various newspaper correspondents that matters for your reference. Take note that these articles when assessed actually guides us locally on what direction the economy is heading, what kind of issues our government is going through and generally, and how this affects our daily businesses and and particularly, the real estate market.
here’s an article from Business World taken from Tata Panlilio Ong :
The 2017 Investment Priorities Plan
On Feb. 28, President Rodrigo R. Duterte, through Memorandum Order No. 12, approved the 2017 Investment Priorities Plan (IPP), as drafted by the Board of Investments (BoI). The IPP is issued every three years and lists the priority investment activities that may be eligible for incentives. The IPP is aligned with the goals, priorities and strategies under President Duterte’s 10-point socioeconomic agenda and the framework on the Comprehensive National Industrial Strategy. After publication, the 2017 IPP took effect on March 18, 2017. At present, the BoI is finalizing the general policies and specific guidelines of the 2017 IPP which will set out in detail the criteria and other parameters that the investment activities must meet to qualify for incentives.
Formulated with the theme “Scaling Up and Disbursing Opportunities,” the 2017 IPP aims to generate more investments to jumpstart manufacturing resurgence; spur inclusive growth and create more jobs especially in the countryside.In his foreword to the 2017 IPP, BoI Chairman and Trade Secretary Ramon M. Lopez explained that the list of priority investment areas significantly differs from the 2014 IPP “with the inclusion of more MSME (micro-, small- and medium-scale enterprises)-oriented, innovation-driven, health- and environment-conscious activities that look at expanding job opportunities for more segments of the population and bringing more firms into the local and global value chains.” Moreover, “there is a deliberate policy to shift investments to the countryside.”
Under the 2017 IPP, the preferred activities are:
1. All qualified manufacturing activities including agri-processing;
2. Agriculture, fishery and forestry;
3. Strategic services — including integrated circuit design; creative industries/knowledge-based services; maintenance, repair and overhaul (MRO) of aircraft; charging/refueling stations for alternative energy vehicles; industrial waste treatment; telecommunications; state-of-the-art engineering, procurement and construction (EPC);
4. Health care services including drug rehabilitation centers;
5. Mass housing — with reduced price ceiling for mass housing units to P2 million from P3 million previously. Except for in-city low-cost housing for lease, only projects outside Metro Manila may qualify for incentives;
6. Infrastructure and logistics including local government unit public-private partnerships (LGU-PPPs);
7. Innovation drivers — research & development (R&D) activities; conduct of clinical trials (including drug trials); establishment of Centers of Excellence; business incubation hubs; fabrication laboratories; commercialization of new and emerging technologies and products of the Department of Science and Technology or government-funded R&D;
8. Inclusive business models — covers business activities of medium and large enterprises in the agribusiness and tourism sectors that provide business opportunities to MSMEs as part of their value chains. These projects may qualify for pioneer status;
9. Environment or climate change-related projects; and
10. Energy — covers power generation projects utilizing conventional fuels, waste heat and other wastes and establishment of battery energy storage systems.
Also included as preferred investment activities are:
* Export activities — including production and manufacture of export products; services exports and activities in support of exporters;* Mandatory inclusions based on special laws that grant incentives like the Philippine Mining Act of 1995, the Renewable Energy Act of 2008 and the Tourism Act of 2009, among others; and
* The list of priority investment areas for the Autonomous Region in Muslim Mindanao.
A key feature of the 2017 IPP is that it seeks to transform and accelerate the growth of the manufacturing, agriculture and tourism sectors by encouraging them to adopt inclusive business models by expanding their backward and forward linkages to MSMEs and integrate the latter into their value and supply chains. In so doing, the hope is to attract investment, and new capital as well as to accelerate job creation in sectors and regions that are currently underserved. These initiatives can help make a significant dent on the inequality of growth/income and the incidence of poverty which, in the long run, will pave the way for sustainable socioeconomic growth.
The BoI certainly deserves credit for developing an IPP that has a strong emphasis on involving MSMEs. The other government agencies can certainly take their cue from the clear mandate in Memorandum Order 12 that all government agencies “regulate the implementation of the IPP, which is aimed at sustaining inclusive growth and generating more jobs in the country.” Moreover, “all government agencies and entities are enjoined to issue the necessary regulations to ensure its implementation in a synchronized and integrated manner.”
For example, the Securities and Exchange Commission (SEC) can continue to enhance its current efforts to simplify the registration forms to set up MSMEs; establish more satellite offices in key cities outside Metro Manila to make it more convenient for MSMEs in those areas; and increase its investment in technology to make services more accessible.
In addition, the Bureau of Internal Revenue can revisit the strong clamor to simplify registration steps for MSMEs as well as to develop a simplified “starter kit” for the books of account, invoices, official receipts and other forms for MSMEs.
The various local government units can also come up with standard, simplified and expedited processes for the issuance of business permits and other permits for MSMEs.
Finally, boosting investment by granting tax and other incentives is just one of the items in the “wish list” of the local business community and foreign investors. Their overarching concerns about doing business in the Philippines include a cohesive and consistent set of economic policies and tax rules; a level and predictable playing field and a good peace and order situation.
Of course, improved transportation and infrastructure systems; and lower cost of electricity, internet and communication will also go a long way in solidifying our country’s image as a preferred investment destination.
Tata Panlilio-Ong is a Director with the Tax Advisory and Compliance division of P&A Grant Thornton. P&A Grant Thornton is one the leading audit, tax, advisory and outsourcing services firm in the Philippines.
Reduced Tax perks bad for BPO Firms
MANILA, Philippines – Property consultancy firm Colliers International has warned of the adverse impact on the country’s business process outsourcing (BPO) industry of reduced tax perks proposed under the first package of the tax reform program.
Colliers said several tax measures that intend to help the Philippine government bolster revenues and eventually fund its ambitious infrastructure development program have been forwarded to Congress.
Among the measures sponsored by the Department of Finance (DOF) is the rationalization of fiscal incentives awarded to foreign outsourcing firms operating in the country.
Colliers said reducing tax perks for BPOs would stifle the industry’s growth.
“While the proposal broadens the government’s revenue base, it diminishes the Philippines’ competitiveness as a major outsourcing hub,” Colliers said.
The first package of the DOF-sponsored tax reform program includes the removal of value added tax (VAT) exemption on BPOs’ sales and imports.
Colliers said once the tax reform proposal is enacted, BPO firms’ transactions would be subject to a VAT equivalent to 12 percent of gross receipts.
“The removal of the zero-VAT status will hinder the government’s ability to attract more outsourcing investments. These tax incentives have lured large BPO and Knowledge Process Outsourcing (KPO) companies to set up shop in Metro Manila and other key urban areas across the country,” it said.
“Removing this incentive from the current set of fiscal perks granted to outsourcing companies will derail existing firms’ expansion and prospective investors’ plans of opening shop in the country,” Colliers said.
A reduction of incentives would not only affect BPO firms’ operations, but it would also weaken the country’s position as one of the most attractive sites for BPO and KPO operations in the world.
At present, Colliers said nine Philippine cities are included in the Tholons list of top 100 outsourcing sites in the world. These are Metro Manila, Cebu, Davao, Santa Rosa in Laguna, Bacolod City, Iloilo City, Dumaguete, Baguio City, and Metro Clark.
here’s an article from philippinestar.com correspondent, Lawrence Agcaoili :
Financial markets weather impact of martial law – ING
Cebu Landmasters’ IPO Oversubscribed
“We are very happy with the demand. We are almost two-times oversubscribed and we exercised the oversubscription option,” BDO Capital and Investments Corp. president Eduardo Francisco said in a mobile message.
He noted a strong takeup for Cebu Landmasters shares even as the offer period overlapped with the P8.6-billion maiden share offering of Eagle Cement Corp.
The Cebu-based developer, founded by property veteran Jose Soberano, offered 505 million shares and another 75 million as an over-allotment option, at P5 apiece.
Proceeds from the primary shares offering will be used to fund land acquisition and development costs for new and ongoing projects in the Visayas and Mindanao, debt repayment and general corporate purposes.
The company, which aims to be the leading and most preferred local developer in the Visayas and Mindanao by 2020, lined up several residential, office and mixed-use projects this year.
It plans to launch projects in Cagayan de Oro, Davao, Dumaguete, Iloilo, Bacolod and Bohol.
The property firm is also expanding its hotel portfolio, after it signed a partnership with Scotts Philippines Inc., a wholly-owned subsidiary of The Ascott Limited, the world’s largest serviced residence operator.
Cebu Landmasters will develop Citadines Cebu City, with Ascott as the hotel operator. Citadines Cebu City will house over 180 rooms, of which 92 condotel units will be offered for sale and 88 units will be retained by the company.
The company plans two more hotel projects.
here’s an article from businessmirror.com.ph correspondent, Roderick Abad :
Dusit International breaks ground for Resort Development in La Union
SAN JUAN, La Union—With the continuous developments now taking place in North Luzon, Thai hospitality brand Dusit International on Monday officially broke ground for the dusitD2 Waves Resort located within the upcoming 7.5-hectare Waves Beach Club and Residences development here, which, when opened by the first quarter of 2019, is expected to entice more tourists and add to the supply of accommodation facilities in the area.
Philippine Hoteliers Inc. Vice Chairman and President Evelyn Singson said the entry of global players like Dusit in the province signals the “positive growth in the real-estate and property development industry in the Ilocos region.
She said this is also expected to bring in more tourists and second-home buyers, as well as encourage more investors to come.
“So, hopefully, we can make San Juan attractive to international tourists because, if you notice, the resorts here are really not [fit] to the standards that international tourists require. So being the first mover, hopefully, we will bring progress to San Juan,” she told reporters at the sidelines during the ceremonial groundbreaking for the upcoming first global hotel to rise in the province and the region. “If you don’t build, then, no one will come. But once you offer something that meets their standards, then, they will hopefully come. The market will expand once you have the facility.”
The Waves Beach Club and Residences, being developed by partners RCL Realty and Consulting Services Inc. and Brightbeam Corp., is a premium Malibu-inspired resort complete with a lifestyle, commercial and residential hub located at the surfing capital of Northern Luzon.
As the anchor of the entire development, dusitD2 Waves Resort will sit at the front of the project, which will feature a 174-room hotel complete with topnotch amenities like a gym, a spa, a swimming pool, restaurants and bars, and a 1,000-capacity function room. Guests will have direct access to the property’s private beach in Urbiztondo, the famed surfing spot. There will also be a spacious parking space.
Once it’s completed in the next two years, this initial part of the five-phase project is seen to increase the limited hotel- room inventory in the province.
“The entire province of La Union does not yet have 1,000 hotel rooms. Definitely, there is a demand. San Juan, where we are doing the project, is the surfing capital of the North, so there will be booming [hotel and tourism industries here],” RCL Realty Chairman and CEO Fausto Liriano said.
“So, the 174 rooms will basically add around 25 percent of around 800 rooms available in the province as of 2016,” RCL Realty President Joseph Nicholas V. Valero said, citing they are for sale to interested buyers who are looking for investments. “They will probably be at 41 square meters [sq. m. on the average] at P8 million [per unit].”
The first phase of the development will also have 110 villas, which will have its own clubhouse that includes a swimming pool, playground, and joggers lane. The houses will be named after various types of waves: Waimea, Maverick, Malia, Sycamore, and Castelrock.
Liriano said they could be used, either for residential use of the owners or they can give it back to the rental program, wherein the dusitD2 will manage for them.
“Then, [they can benefit from the] profit-sharing,” he said, noting each lot costs between P10,000 and P15,000 per sq.m.
While the villas are on a pre-selling mode, the dusitD2 Waves Resort will approximately have an investment cost of around P1 billion, which both the RCL Realty and Brighbeam Corp. will finance through private equity and bank loans.
“We are still undecided if we will be building it and managed all by Dusit, or we will sell individual and then put it in the rental program. But with the villa, there is no problem with financing, because basically, it’s pre-selling. We are not doing house financing. We have accreditations with banks,” Liriano said.
For the condominiums comprising the second phase, he said they “will have a more clear picture” on how they will plan to build it in the next six months.
As to future expansion of the project, he said it remains uncertain, though they are open to acquisition of lands adjacent to the property.
“There are lands besides us that we are talking about. We cannot assure anything because we haven’t acquired those lands [yet]. But we are talking to them and we are trying to secure those lands,” he said. “If we consolidate all [of them], we can have additional 9 hectares.”
In keeping up with their promise, Liriano is confident they are on track to finish the whole Waves Beach Club and Residences project in the next 5 years to 7 years.
“We want to move fast. And the reason why is we have many other developments on the pipeline. This is not our only project,” the chairman and CEO of RCL Realty said.
CL Realty is a real-estate firm headquartered at the Makati Central Business District, with a satellite office in La Union.
Brightbeam Corp. is the Philippines’s largest chain of quick-service centers for motor vehicles.
Dusit International operates dusitD2 properties across Thailand, China, Kenya and USA. In the Philippines, there are currently six, with La Union being the latest. These include two in Davao, two in Cebu, and one at Fort Bonifacio in Taguig. There are plans also to build another property of this brand in Ilocos.
About 13 dusitD2 properties are in the pipeline and scheduled to open in Bhutan, Mongolia, Myanmar, Oman, the Philippines, Qatar, and the United Arab Emirates. Other brands in Dusit International’s distinctive international portfolio include Dusit Thani, Dusit Princess and Dusit Devarana.
here’s an article from manilastandard.net correspondents, Macon Ramos-Araneta and Maricel V. Cruz :
Congress okays tougher AMLA
THE Senate and the House of Representatives have approved their respective version of a bill that would expand the coverage of the Anti-Money Laundering Act to include casinos to improve the Philippines’ legal framework against money laundering and make it more attuned to international standards.
With 21 affirmative votes, no negative votes and no abstentions, the Senate on Tuesday approved Senate Bill 1468 while the House approved House Bill 5663?which set at P5 million per transaction the amount that can be legally questioned?by 219 votes.
Senate Bill 1468 was authored by Senate President Pro Tempore Ralph Recto and sponsored by Senator Chiz Escudero.
Escudero, chairman of the Senate committee on banks, financial institutions and currencies, said the bill primarily sought to “put more teeth into the existing AMLA by including the casino industry under the coverage of the law.”
Eastern Samar Rep. Ben Evardone, head of the House committee on banks and financial intermediaries, said the House decided to come up with a tougher AMLA following the $81-million Bangladeshi cyber heist, the biggest hoard of dirty money reported to have entered and left the country last year.
Evardone said the House bill set the amount that could be challenged to P5 million from P500,000 “to protect the industry that provides jobs and livelihood to many Filipinos.”
“This will enhance the country’s competitiveness and the transparency of financial transactions. This will also improve the image of the gaming industry as a haven for investors,” Evardone said.
Reps. Josephine Sato of Mindoro Occidental, Winston Castelo of Quezon City and Henry Oaminal of Misamis Occidental authored the consolidated measure that sought to amend the AMLA.
The Anti-Money Laundering Act, first passed into law in 2001, established the Anti-Money Laundering Council to ensure that the country will not be “used as a money laundering site for the proceeds of any unlawful activity.” It also required the government to cooperate “in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed.”
“Under this proposed measure, casinos, including internet and ship-based casinos, with respect to their casino cash transactions related to their gaming operations, shall be considered as ‘covered persons,’” Escudero said.
He said that, under the new AMLA, any single casino cash transaction involving an amount in excess of P5,000,000 or its equivalent in any other currency would now be considered as a “covered transaction.”
Escudero said the passage of the bill was necessary given the June deadline imposed by the Asia/Pacific Group on Money Laundering to the Philippines to strengthen its money laundering laws.
The APG is an international body monitoring the implementation and enforcement of internationally accepted standards against money laundering and the financing of terrorism. It is currently monitoring the country’s compliance “with respect to the enactment of an anti-money laundering law including casino operators as covered persons.”
here’s an article from dealstreetasia.com correspondent, Tomas S. Noda III :
Philippines: Singapore’s sovereign fund GIC acquires direct stake in BPI Bank
Singapore’s sovereign fund GIC Private Ltd has acquired a direct stake in Bank of the Philippine Islands (BPI), a diversified universal bank owned by conglomerate Ayala Corp. Through a block sale transaction at the Philippine Stock Exchange (PSE) last May 11, GIC realized a direct 1.2 per cent stake in BPI, as Liontide Holdings Inc, formerly Ayala DBS Holdings Inc, transferred 46.63 million shares worth $91.4 million (P4.56 billion) to GIC, The Philippine Star reported.
The shares were sold at P100 apiece. Liontide’s interest in BPI was reduced to 20.1 per cent or 792 million shares from 21.26 per cent consisting of 837.63 million shares. DBS in November 2013 through its wholly-owned subsidiary DBS Bank Ltd, divested its remaining 9.9 per cent stake in BPI to GIC and Ayala, for a total consideration of SGD850 million in cash. DBS used to hold its 9.9 per cent stake in BPI through a private joint venture company with Ayala and the divestment took the form of a sale of DBS’ shares in that company, as opposed to a sale of BPI shares.
GIC manages over $100 billion in a diverse range of assets – from equities to real estate and natural resources – in over 40 countries globally.
BPI is the third largest lender in the Philippines with P1.45 trillion in assets as of December 2016. The bank’s net income in 2016 reached P22.05 billion, rising 20.9 per cent in the previous year. Comprehensive income was P21.74 billion, up by 30.2 per cent.
BPI last traded at P105.40 per share on Friday (May 26).
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