here’s some “select” articles about Philippine Real Estate and Economy from various newspaper correspondents for your reference.
from Philstar’s correspondent, Lawrence Agcaoili :
Philippines has ‘rare kind of economic resilience’ – Moody’s
MANILA, Philippines – Debt watcher Moody’s Investors Service says the Philippine economy remains resilient to the current headwinds buffeting neighboring countries and emerging markets as a whole.
The credit rating agency cited the country’s rare kind of economic resilience against a challenging global environment and pointed out the Philippines is well ahead of other emerging markets in terms of managing external adversities.
Moody’s cited the country’s strong domestic consumption, healthy external payments position, stable banking sector, rising contribution of private-sector investments to growth, increasing per-capita income, benign inflation, and declining debt burden.
“The Philippines’ Baa2 government bond rating reflects the economy’s resilience to the current headwinds buffeting neighboring countries and emerging markets as a whole,” Moody’s said in its latest report on the Philippines.
It expects the Philippines, compared with other emerging markets, to remain less affected by external shocks, such as market volatility arising from the pending tightening of US monetary policy, weak global demand, and slowdown of China and other major economies.
“The Philippines’ susceptibility to event risk is low, reflecting a robust external payments position, strong local demand that insulates funding conditions for the government from external financial shocks, and a banking system that poses limited contingent risks to the government,” it said.
The country is keen on keeping its credit rating within the investment- grade category given its benefits to the general economy and to ordinary citizens.
A credit rating within the “investment-grade” territory (in contrast with ratings within the speculative category) signals adequate ability and willingness of a government to pay liabilities as they fall due.
Such a rating helps reduce interest rates on borrowings not only of the government but also of private enterprises and individuals. An investment-grade sovereign credit rating may help attract job-generating investments.
In zeroing in on the country’s banking sector, Moody’s noted its ability to cushion external headwinds.
“The banking system is virtually immune to contagion from external shocks. It is largely deposit funded – aided in part by steady flow of remittances-and exhibits a lack of dependence on external funding and low exposure to the export sector,” Moody’s said.
Moreover, Moody’s also highlighted the growing confidence of the private sector, which is reflected in rising investments and which help boost incomes of Filipinos.
On the fiscal front, Moody’s said the country’s fiscal strength continued to improve due to the consistent decline of the debt burden, which means improving manageability of the government’s liabilities.
from asia.nikkei.com’s correspondent, MASAHIRO OKOSHI :
Manufacturing slump creating ghost towns
NANTONG, China — Beijing says China’s economic slowdown is a necessary phase in the country’s transition to sustainable growth, but that is little consolation to the scores of manufacturers fighting for survival amid tanking demand. Job cuts are rippling through the shipbuilding and other industries by the thousands, and local businesses and communities are struggling to cope as their livelihoods disappear.
China’s growth slowed to below 7% for the first time in six and a half years in the July-September quarter. The government has implemented one stimulus measure after another, but the manufacturing industry, which many say holds the key to a recovery, remains mired in a slump.
The shipbuilding industry is a prime example of how bad things have gotten. China is the world’s No. 1 shipbuilder, controlling about 40% of the global market. But the sector is reeling, with orders for the January-September period plunging 70% on the year.
Because it has become a poster child for industries saddled with excessive production capacity, banks are hesitant to extend credit to shipbuilders, forcing the more desperate players to turn to high-interest lenders. Bankruptcies have been filed one after another this year.
One of those failed shipbuilders is Nantong Mingde Heavy Industry, and its collapse has hit its local community hard.
The city of Nantong, Jiangsu Province, where the private shipbuilder was based, is located across the Yangtze River from Shanghai. Nantong’s riverside areas are now mostly deserted, with many restaurants and shops there shuttered due to a lack of customers.
Nantong Mingde was a major source of jobs in the area, employing about 8,000 people. All of those workers, many hailing from other parts of the country, were gone by the end of August due to the company’s bankrupcty. Now, the area resembles a ghost town.
Not far from the deserted dockyard, a similarly depressing scene can be observed. The production facilities of China Huarong Energy, China’s largest private shipbuilder, are still operating, but business is not so good.
The company changed its name this spring and has been stepping up efforts to move away from shipbuilding. But because change has not gone much deeper than that, business continues to suffer. A high-end hotel just outside the main gate of the factory is open, but its dimly lit lobby is empty.
from BusinessInquirer.net correspondent, Paolo Montecillo :
Philippines expects to benefit from China rate cut
Beijing’s interest rate cut late last week, meant to arrest the recent economic slowdown in China, may push investors’ cash into emerging markets with strong fundamentals like the Philippines, the Bangko Sentral ng Pilipinas (BSP) said.
BSP Governor Amando M. Tetangco Jr. said continued reforms in China would help alleviate global jitters over economic prospects for the developing world.
“In the near term, we may see some rebalancing of flows toward US assets as well as emerging market economies that have strong macro fundamentals,” he told reporters Monday.
“We will continue to monitor developments to see if there is need to adjust the stance of policy,” Tetangco said.
Last Friday, People’s Bank of China (PBOC), China’s central bank, slashed its key policy rates by a quarter of a percentage point. Reserve requirements were also reduced.
The twin moves follow an “ultra-dovish” stance recently taken by the European Central Bank, which forced investors to “fret the true health of the Chinese economy,” BPI economist Nicholas Mapa said in a note.
Apart from providing a boost to economic activity, China’s decision also aims to help the country transition away from relying heavily on exports to drive expansion.
Tetangco said China’s moves would help ease fears of an abrupt growth slowdown in Asia’s largest economy. “These should be good for global market confidence.”
In the third quarter of 2015, China’s economy grew by 6.9 percent, the slowest since 2009. Despite the deceleration, its gross domestic product (GDP) was still above most analysts’ expectations.
China’s economic slowdown has been a major source of concern for global investors, and these jitters have spilled over to smaller economies like the Philippines.
Last year, China accounted for about 14 percent of global GDP, up from just 4 percent 2000.
Have a great day !
Robert G. Sarmiento Properties
Professional Affiliation :
Real Estate Broker’s Association of the Philippines
President, Greenhills Chapter 2008, 2009
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