Here’s some “select” articles about Philippine Real Estate and Economy from various newspaper correspondents for your reference. Take note how the major developers are venturing into other opportunities, in this blog, Manny Villar has now gotten into Hospital Venture. We’ve already seen in the past how SM Land, Megaworld Inc., Filinvest Land Inc., Ayala Land Inc., Araneta Properties, Lucio Tan Group, and Federal Land have led the pack in investing in Business Process Outsourcing, Ayala Land invested in Tourism, SM Land into Power Generation, Metro Pacific Inc in Hospitals and Road Infrastructure, Information Technology companies such as Lamudi and Property 24 to compete with our very own OLX or Sulit.com, etc…. interesting to note that foreign companies have opened up shop to take advantage of our booming economy. We still need much needed Foreign Direct Investments that will alleviate poverty in the country though and revision of our Laws is the solution to this major problem !
Our fundamentals are sound as what foreign credit bureaus and bank analysts are saying , let’s just hope that we have a peaceful election in 2016 and the Filipino people can “truly” vote wisely a worthy President that will take this country to the next level.
from Manila Bulletin’s correspondent, Lee C. Chipongian :
BSP prepares Real Estate price monitoring :
In implementing the residential real estate price index (RREPI), the Bangko Sentral ng Pilipinas (BSP) is now requiring banks to submit quarterly residential real estate loans (RRELs) reports.
Data from commercial and thrift banks’ RRELs will “provide information for the generation” of RREPI.
“The construction of RREPI based on banks’ approved housing loan applications is a first in the Philippines and is expected to provide a valuable tool in assessing the real estate and credit market conditions in the country,” said the BSP in a statement yesterday.
Based on the new circular which was approved last October 29, the initial report will cover the second and third quarter of 2015 and must be submitted on or before December 29. The later submissions will be every 20th banking day from the reference quarter.
The BSP is planning to release the RREPI first quarter next year. In a previous interview, BSP managing director for monetary policy sub-sector, Francisco G. Dakila Jr., said the RREPI will plug the gap in the BSP’s statistical data when monitoring real estate prices and credit market conditions in the country.
It was explained that the availability of data on property prices is one of the information gaps identified in the Group of Twenty or G-20 report following the Global Financial Crisis, and is also included in the Special Data Dissemination Standard Plus categories under Financial Soundness Indicators that member countries of the International Monetary Fund should adhere to within five years from the time the country signifies its intent to participate in this global undertaking.
Dakila said the RREPI will be one of its valuable tools in assessing the real estate market and trends in asset prices.
Banks’ loan applications for real estate is one of the many information that BSP is using in processing RREPI on a quarterly basis. It is also using what it called a preliminary RREPI which was based on construction materials and building permits. This is data they obtain from the Philippine Statistics Authority.
BSP officials insist there is no evidence yet of asset bubble formation. An asset bubble or the rapid rise of property prices triggered the 2007 and 2008 global financial crisis.
ALTHOUGH the country’s property sector experienced a slower growth of 5.3 percent in gross revenue in the second quarter of 2015, it still emerged as the top employer in the country, according to the Philippine Statistics Authority’s sectoral Quarterly Economic Indices for the second quater of 2015. Online property portal Lamudi Philippines noted that the big players remained confident going to 2016 as they go full blast in developing their megaprojects.
Lamudi said Ayala Land Inc.’s (ALI) Alviera is expected to go further in its development aimed to establish the property titan’s foothold in Central Luzon.
The 1,100-hectare large-scale, mixed-use development in Porac, Pampanga, is considered as one of ALI’s most ambitious projects to date. To prove ALI means business, they have allotted P90 billion for the project, significantly more than the company is planning to invest in its Arca South project in Taguig City.
Based on the company’s road map, Phase 1 development, which includes industrial park, a country club, three residential communities and two academic institutions spread over 207 hectares of land, is already under way.
With the opening of Five E-Com Center this year, and three more office towers in the works until 2019, the Sy-led SM Prime’s Mall of Asia (MOA) Complex is being positioned to be a premier business district. Moreover, SM Development Corp. already has two condo projects in the complex, three office towers, the country’s third-largest mall, a convention center and an indoor arena. The Andrew Tan-led Megaworld Corp., meanwhile, has invested P65 billion for its integrated resort project in the Bay City in Parañaque.
It is the 20th township project that has residential component of more than 1,230 units, in addition to a 3,000-seat opera house, shopping mall and casino in keeping with the Bay City’s entertainment concept. In an alliance between corporate titans, George Ty-led Federal Land and ALI subsidiary Alveo Land, established a joint venture to develop a 45-hectare township project in Biñan, Laguna. The two companies are earmarking capital expenditure of P1.9 billion for the yet-unnamed project. GT Capital mentioned the project will be a few kilometers away from the planned Laguna Boulevard interchange of the Cavite–Laguna Expressway and will be close to Nuvali and Ayala Westgrove Heights.
In September the Gotianun family-led Filinvest Land bagged the contract to develop 288 hectares of prime land in the Clark Green City, a project master-planned by the Bases Conversion and Development Authority (BCDA).
The BCDA has tied up with the Home Development Mutual Fund to build 2,000 affordable mixed-income housing units for the future employees working in the Clark Green City. Moreover, the BCDA and the University of the Philippines (UP) signed an agreement in August this year to build a UP campus in a 70-hectare area.
from Philippine Star correspondent, Richard S Mercurio :
Investors cautious on negative news, say foreign groups
MANILA, Philippines – Negative news is bad for business, and what is bad for business could spell doom for the economy.
The “laglag-bala” or bullet planting scam in the country’s airports has not yet made a dent on the Philippine economy yet, but it poses the threat of wounding the country’s attractiveness as an investment destination if it is not addressed immediately.
“Investors are certainly not amused and will question the ability of the Philippine government to deal with issues affecting business,” European Chamber of Commerce of the Philippines (ECCP) executive vice president Henry Schumacher told The STAR.
The Philippines continues to be recognized as one of the top-in-mind attractive destinations among investors globally due to its sustained robust economic growth rates, according to foreign business groups in the country.
The country’s economy improved six percent in the third quarter of the year, the third fastest growth in Asia next to China’s 6.9 percent and Vietnam’s 6.8 percent.
Last year, foreign direct investments (FDIs) in the country even soared to a record high of $6.201 billion from $3.737 billion in 2013.
FDI inflows this year, however, have plunged. FDIs declined 35 percent in the seven-month period from a year ago.
Although the bullet planting and allegations of extortion at the Ninoy Aquino International Airport (NAIA) has nothing to do with this downtrend yet, it may have implications moving forward.
“I do not think that, at this point, the previous incidents would in a big way affect investor confidence. If allowed to continue, however, this type of incident may contribute to damage the security reputation of the Philippines, which is one of the factors potential investors for sure will look at,” Nordic Business Council Philippines (NBCP) president Bo Lundqvist told The STAR.
NBCP promotes and facilitates trade, commerce, industry, and investment between the Philippines and the Nordic (Denmark, Finland, Iceland, Norway, Sweden) and Baltic (Estonia, Latvia, Lithuania) countries.
The “laglag-bala” or “tanim-bala” scam at NAIA has gained prominence not only in the country, but even in other countries in Asia and the United States, placing fear and concern on both local and foreign travelers alike.
Lundqvist said the Philippines’ reputation as a safe and easy place to do business should be protected, if the country wishes to continue enjoying its status as an attractive investment destination.
In the World Bank’s October report gauging economies in terms of ease of doing business, the country’s ranking dropped six notches to 103rd from last year’s 97th spot across 189 economies.
Schumacher said aside from the Philippines’ reputation, tourists, overseas Filipino workers and business travelers are the ones currently suffering from the prevalence of the bullet planting modus.
In terms of sector, foreign business group executives said it is obviously the country’s tourism industry that would take the biggest blow should the scam continue and remain unaddressed.
“If this catch on further international press, most probably if the incidents target foreign arrivals, it will for sure affect the tourism industry. This industry is volatile and potential security threats can immediately cause cancellations of large number of incoming tourists for a long period of time,” Lundqvist said.
The tourism sector is one of the bright spots seen in further expanding the Philippine economy.
The contribution of the tourism industry to the economy was estimated at 7.8 percent last year and is currently the third largest dollar earning industry of the Philippines next to semiconductor and business process outsourcing industries.
But if there is any consolation for the country at present, it is that the bullet planting modus has yet to make its impact on the local tourism industry.
“I did a quick survey of lots of APEC guest and only about one third even knew about it and that third, while thinking it was creative and a bit funny or strange, certainly didn’t think it was a headliner and didn’t understand why it kept making news,” American Chamber of Commerce of the Philippines executive director Ebb Hinchliffe said.
“There has been a limited number of incidents of which only a few have involved foreigners. I do not think that at this point, these incidents will bring harm to the Philippine economy. Neither do I think it reflects on the majority of airport workers in the Philippines. However, if it is not swiftly addressed by the government, it may create further bad press for the Philippines,” Lundqvist added.
Department of Tourism (DOT) assistant secretary Art Boncato Jr. assured the DOT would extend all efforts to work with all sectors to ensure guests are accorded the kind of hospitality the Filipinos are celebrated for.
Boncato said the country is now pushing towards exceeding the five million mark in foreign arrivals by the end of the year.
“Things are looking up with our Visit the Philippines Again 2016 tactical campaign. The DOT’s mandate is to grow tourism because it is about providing food on the table of many communities who rely on it,” Boncato said.
Foreign business groups are now calling for the immediate solution to such extortion scheme which has been allegedly targeting migrant workers and tourists.
Schumacher said the modus should have been stopped and eradicated the minute it became known.
“First impressions for tourists and visiting businessmen last,” Schumacher said, urging the government to replace the management of NAIA to solve the issue.
“That management cannot even provide taxis. If you arrive at Terminal 3 in the late afternoon or early evening, there are long lines of passengers waiting for transport. Of course, you can get a taxi for three times the normal rate – with official receipt,” he said.
For Lundqvist, he said it is important for the government to conduct a proper investigation into the matter, with the objective of finding the perpetrators and use the full force of the law to sentence them.
“If the Philippine government can resolve the issue in a transparent and permanent way, I believe it will not cause significant harm,” he said.
“I would also like to see the government enforcing transparent security measures in place at all airports, preventing airport staff from at any part of the airport harassing passengers. Perhaps added to that, airport staff may need education in customer service and their important role as first line representatives of the Philippines as foreign travelers arrive here,” Lundqvist added.
from InterAksyon.com :
Moody’s stress test shows PHL Banking system one of most resilient to Crisis
MANILA – The Philippine banking system is one of the most resilient in the world in times of crisis, according to Moody’s Investors Service, basing its assessment on the results of stress tests it conducted.
The impact on bank capitalization of a simulated shock would be lower for the Philippines than the global average, the stress tests showed.
Under its hypothetical extremely severe scenario, Moody’s said the average capitalization ratio globally would drop by 5.5 percentage points, faster than the decline of 4.9 percentage points for the Philippines.
In a similar trend, the average bank capitalization globally under this scenario would be 6.0 percent, much lower than the 8.4 percent for the Philippines.
The estimated 8.4-percent capitalization ratio for the Philippines under the “stressed” scenario would still be better than the international benchmark of 8 percent prescribed under Basel regulations.
Capitalization ratio is defined in the Moody’s report as the tangible common equity of banks as a percentage of their risk-weighted assets.
The banking systems of 68 economies around the world are assessed by Moody’s.
“The Philippine banks’ resilience to stress is positive compared to other banking systems around the world,” Moody’s said in its latest Philippine banking outlook report titled “Resilience of Domestic Economy Drives Stable Outlook.”
In the conduct of a stress test under a hypothetical crisis situation, Moody’s applies multipliers to baseline probabilities of loan default. This is meant to deliberately exaggerate the potential shock to better gauge the ability of banks to absorb unforeseen developments.
Meantime, Moody’s also said it has assigned a “stable” outlook on the Philippine banking system after it upgraded the credit ratings of various banks in the country.
The stable outlook means that the new and higher credit ratings of banks are likely to be maintained over the short term.
Prior to the upgrades, Moody’s had assigned a “positive” outlook, which indicated that the previous ratings were up for an upgrade.
Among the banks whose credit ratings were revised recently are Banco de Oro, Metropolitan Bank and Trust Co., Bank of the Philippine Islands, Land Bank of the Philippines, Philippine National Bank, and Rizal Commercial Banking Corp.
The credit ratings of BDO, Metrobank, BPI, and Land Bank were upgraded by a notch from Baa3 to Baa2. The ratings of PNB and RCBC were upgraded by two notches from Ba2 to Baa3.
Moody’s latest assessment of the Philippines’ banking sector is consistent with the view it will remain sound and stable, and will continue to support sustained growth for the overall economy.
The Investor Relations Office (IRO) said upgrades in the credit ratings of banks were consistent with the positive ratings actions Moody’s did on the Philippines’ sovereign credit rating.
In 2013, Moody’s upgraded the Philippines’ sovereign credit rating to the minimum investment grade rating of Baa3 with a positive outlook. This was followed by another notch of upgrade to Baa2 with a stable outlook in 2014.
MANILA – Philippines is more than ready to take the global stage anew with the full Association of Southeast Asian Nations (ASEAN) integration by 2016, a Cabinet member said.
Tourism Secretary Ramon Jimenez said Manila’s hosting of the Asia-Pacific Economic Cooperation (APEC) 2015 Summit has not only benefited the local tourism industry, but also prepared the country for economic integration.
He said that from the increased tourist arrivals and domestic travels during the APEC week, to world leaders experiencing the hospitality of Filipinos, the event served like “an intensive one-year training program” for the people from various local agencies.
“One of the primary features of ASEAN integration is setting standards. And when you relate it to APEC, APEC is a standard-setting event. It really made us kind of sure of our gains, so to speak,” Jimenez said in an interview on Mornings @ ANC.
“It’s much easier for Filipinos to put their game face on right now because we are not pretending anymore, we’ve actually done it,” he added.
The tourism chief defined the hosting of APEC as an event of 47 different meetings across 14 months which involved various places in the Philippines; including Bataan, Legazpi, Cebu, Boracay, Tagaytay, Iloilo, and the culmination in Manila.
He said the hosting of APEC made a tremendous impact on the country’s tourism campaign especially in the provinces, with heads of economies and ministers witnessing the beauty of the Philippines.
Jimenez even attributed the demand for better local airports to the improving tourism campaign of the government.
“The only reason we’re talking about better airports now is that I think I have crowded our airports, tourism has crowded our airports,” he said.
Aware of the shortfalls in infrastructure and transportation system, Jimenez assured that the government is already working on facilities to improve the travel experience for local and foreign tourists.
“Decisions to fix that have already been made, it’s just that it takes little more time for cement to dry, so to speak,” he said.
Jimenez also highlighted Filipinos’ strong hosting skills, such as good command of English and hospitality, as the Philippines’ edge over other countries when it comes to global events.
“Now in terms of standards, the ASEAN integration is very good for the Philippines because in many respects we are already the standard. Remember if you go to a country for Singapore, the standard for hospitality is actually set by Filipinos because over 40 percent of the service business in the hospitality industry in Singapore is actually run by Filipinos,” he said.
“Integration makes the Filipino standard the standard. And the challenge for us is to how to become better than ourselves. And APEC was a very good exercise on that,” he added.
With the new campaign dubbed as “Visit the Philippines Again 2016,” Jimenez said people can expect a more competitive local tourism drive by giving travelers reasons to come back to the country as a destination.
“It is the demand that creates the resources. So I have to keep the demand up and that means a sustained tourism marketing campaign. Because that demand forces the system to cope with the influx,” he said.
In addition, Jimenez said among major events to watch out for early next year is the ASEAN Tourism Summit at the Philippine International Convention Center (PICC) in January, Routes Asia 2016 in February, and Madrid Fusion Manila in April.
from Philippine Daily Inquirer correspondent, Doris Dumlao-Abadilla
Manny Villar invests in Healthcare
GROUP PLANS 14 HOSPITALS IN NEXT 5 YEARS
“We want Vista City to have the biggest (hospital in the chain),” Villar said.
The rollout of the next hospitals was not expected to be difficult, Villar said, noting that the group had already identified the suitable landbank.
Asked for the rationale of building new hospitals from scratch, Villar said this would provide synergies with existing developments of Vista Land. “We can move very quickly and we can put in the land as equity. By 2016, we should already be launching the second and the third hospitals,” he said.
The strategy will be to find a group of doctors to team up with. “We provide the land and the market and the financial expertise and they will run the operations,” he said.
Other possible areas for expansion for the Villars’ upcoming Vitacare hospital chain are Parañaque (Lake Front), Bataan (Balanga), Bulacan (Malolos and San Jose del Monte), Cavite (General Trias and Tanza) , Batangas (Santo Tomas), Pampanga (San Fernando), Naga (Camarines sur), Cebu (Talisay), Iloilo (Boton), Davao and Cagayan de oro.
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Robert G. Sarmiento Properties
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