here’s some select news on Philippine Real Estate and economy that matters from various newspaper correspondents :
from The Standard’s correspondent, Christine F. Herrera :
Aquino family reclaims Hacienda Luisita
PRESIDENT Benigno Aquino III’s family has managed to reclaim ownership of the 6,453-hectare Hacienda Luisita, reducing the farmer-beneficiaries who were supposed to own the land under the agrarian reform program to sakadas or plantation workers, a federation of agricultural workers said Monday.
The Unyon ng mga Manggagawa sa Agrikultura disclosed that Aquino’s family sold the Central Azucarera de Tarlac to a businessman, Martin Lorenzo, but the company remains under the control of the family, through the President’s first cousin, Fernando Cojuangco, who is a first cousin of the President.
UMA acting chairman John Milton Lozande said the sale was made to avoid paying back farmer-beneficiaries some P1.33 billion in proceeds from the sale of lands in
Hacienda Luisita and to abort the distribution of land to farmers and farmworkers.
After the sale last year, Lorenzo named Cojuangco the president and chief operating officer of CAT.
Using CAT, which is within the Hacienda Luisita estate, Cojuangco immediately acquired shares of other Aquino-Cojuangco firms such as the Luisita Realty Corp. and Luisita Industrial Park Co. through the CAT Resource and Asset Holdings Inc. This effectively made the Aquino-Cojuangco family the real owners of Hacienda Luisita, Lozande said.
In May, Lozande said, almost 700 workers of the CAT were retrenched and forced to sign “voluntary retirement” papers.
Those to be rehired this milling season starting November will now work as contractual workers, he said.
“Because of fake land distribution implemented in 2013, the supposed 6,212 farmer-beneficiaries who used to work for CAT and Hacienda Luisita Inc. are now back to being tenants,” Lozande said.
“It’s like killing people all over again just to revive a ‘zombie’,” Lozande said in describing the revival of CAT.
Lozande said Lorenzo’s excuse in undertaking the retrenchment was to give the Cojuangcos “a lesson or two in efficiency” after he acquired the sugar mill in 2014.
But UMA said the massive retrenchment and contractualization in the mill, coupled with land grabbing and the wholesale swindle of supposed agrarian reform beneficiaries—were tantamount to the slow death of farmers and laborers in Hacienda Luisita.
“They are still raking in profits primarily through the blood and sweat of workers and peasants, who are now doubly exploited through contractualization and the… leaseback scheme.”
Lozande said the planned sale by Lorenzo of land assets under CAT and LRC is a ploy to enable the Cojuangco-Aquino family to evade payment of its standing debt to farmworkers.
The Cojuangco-Aquino-owned HLI, established in 1989 to implement the stock distribution option under the land reform program, still owes farmworkers a total of P1.33 billion.
In its April 24, 2012 landmark decision for total land distribution in Hacienda Luisita, the Supreme Court also ordered the audit of the P1.33-billion farmworkers share in the sale of 580 hectares of the company’s land assets to RCBC, Centennary Holdings, and the SCTEX area traversing Hacienda Luisita.
“Disposing the CAT and LRC’s land assets will muddle the audit, as we believe that these are still part of HLI’s assets where farmers have a legitimate share. Morally and historically, the Cojuangco-Aquinos do not deserve a single centavo, they should no longer own even a single inch of land in Luisita,” Lozande said.
These assets include 505 hectares that are purportedly no longer required for cane milling and sugar refinery operations, and that Lorenzo plans to sell or develop out of the self-declared 628-hectare refinery complex, he said.
Other than that, he said the Supreme Court ordered the Department of Agrarian Reform to cover other agricultural lands originally held by another Cojuangco-Aquino firm, the Tarlac Development Corp. or Tadeco.
In February 2014, the LRC applied to the Philippine Economic Zone Authority to declare a 260.4-hectare property located in Barangay Balete, Luisita for inclusion to the existing Luisita Industrial Park-Special Economic Zone, Lozande said.
The area, where scores of farmers were injured when their crops were bulldozed and their huts were burned in 2013, is purportedly a Tadeco property, he said.
“The PEZA’s ultimate go-signal for the LRC’s application must be approved by President Aquino himself,” Lozande said.
“Aquino’s alter-egos at the Department of Justice and the DAR have so far failed to act positively on any of the complaints and petitions filed by the Alyansa ng Manggagawang Bukid sa Asyenda Luisita (AMBALA), on behalf of the victims and affected farmers.
from The Standard’s correspondent, Julito G. Rada :
PH is credit positive — Moody’s
Global debt watcher Moody’s Investors Service said Monday the 6.3-percent expansion of the Philippine economy in the fourth quarter is credit positive for the country’s sovereign rating.
Moody’s, which upgraded the country’s credit rating to Baa2 with stable outlook in December 2014, said it was keeping its 2016 growth forecast at 6 percent, saying the Philippines remained resilient and was in a better position than regional peers to ride out the financial market volatility.
Moody’s said in its latest credit outlook on Feb. 1 the 6.3-percent gross domestic product growth in the fourth quarter showed the Philippines’ resilience to external headwinds and the government’s “ability and willingness to shore up domestic demand amid a weak external environment.”
“Even the severe El Niño dry spell, which hit farm output, failed to stymie the expansion. The strong growth is credit positive because it demonstrates the economy’s resistance to global shocks…,” it said.
Moody’s said this strong performance came at a time when weak global demand was slowing growth in export-oriented Asian economies and put the Philippines in a more robust position than many of its regional peers to weather any further global economic and financial market volatility.
“Although the presidential elections create some political uncertainty, we expect economic reform and policies that foster infrastructure investment and maintain fiscal prudence to remain the key long-term goals of the government. We expect 6-percent GDP growth in 2016, up from 5.8 percent in 2015,” it said.
The Philippine Statistics Authority said GDP growth in the fourth quarter accelerated to 6.3 percent from the revised 6.1 percent in the third quarter, bringing the full-year expansion to 5.8 percent, slower than the projected 7 percent to 8 percent, but still one of the fastest in the Asian region.
Moody’s said stronger government spending and robust household consumption and services exports buffered the economy against deteriorating global growth.
“Looking ahead, the Public Private Partnership Program for infrastructure development and a pickup in economic activity as the country gears up for midyear elections will underpin growth,” it said.
Moody’s said although the Philippines was not immune to economic slowdown in China, it was less reliant on Chinese demand than many of its neighboring countries.
“Whereas many Asian countries count China as their largest export partner, it is the Philippines’ fourth-largest export destination. The Philippines is also much less dependent on commodity receipts for exports or fiscal revenues than its regional peers,” it said.
Moody’s said the increase in government consumption and investment in the second half of 2015 after restrained public spending resulted in a sluggish growth in the first half.
GDP grew 5 percent in the first quarter, 5.8 percent in the second quarter and 6 percent in the third quarter, before picking up to 6.3 percent in the fourth quarter.
Moody’s also said the Philippines received a large share of its current account receipts, which was composed of exports of goods and services and remittance inflows, from the United States, where demand was growing more strongly than in previous years.
“Robust demand for Filipino services such as business process outsourcing and tourism, which the government has sought to promote, has offset the weak demand for merchandise goods. Travel services rose a strong 58.9 percent in the fourth quarter from a year ago, up sharply from 16.8 percent in the third quarter,” Moody’s said.
The 2015 GDP growth of 5.8 percent exceeded the earlier expectation of Moody’s of a 5.7-percent expansion. Its previous 6-percent GDP growth forecast for 2016 was made in November last year.
from Business World c/o Bloomberg :
Asia results suggest bubbles avoidable after all
From Singapore to Sydney to Seoul, regulators have implemented prudential rules that target house-price inflation at the same time as they deliver stimulus to their economies through monetary policy. As the list of countries dropping rates toward zero lengthens, macroprudential measures, once out of favor in the developed world, are staging a comeback.
“Asia has been a pioneer in macroprudential measures,” said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc. in Hong Kong. “Ideally, the region would’ve had higher interest rates in recent years to cool down speculative pressure, but that wasn’t possible. So, this was a substitute, and early signs are, it seems to have worked.”
The crux of the debate over macroprudential measures harks back to an argument from former Federal Reserve Chairman Alan Greenspan that a central bank could clean up the mess from financial excesses, not prevent it.
But, following the US housing bust and freezing up of global credit markets in 2008, such a laissez-faire attitude became increasingly untenable. The conundrum of cheap money pouring into real estate in Asian economies, as the Fed lowered its benchmark rate to near zero, demanded action.
Singapore led the response, introducing residential property curbs in 2009. These included:
• a cap on debt repayment costs at 60% of a borrower’s monthly income;
• higher stamp duties on home purchases; and
• increased real estate taxes.
Hong Kong acted in 2010 and in subsequent years, introducing:
• a special stamp duty on properties resold within two years, later lengthened to three;
• an additional 15% tax on purchases by foreigners and corporations in 2012 in response to overwhelming demand from mainland Chinese buyers; and
• a doubling of the progressive ad valorem rates in February 2013 to a maximum of 8.5%.
Prices in both jurisdictions are now falling, with Singapore registering a ninth consecutive quarterly drop in December while secondary residential prices in Hong Kong dropped 6.9% in the fourth quarter.
Adair Turner, chairman of the UK Financial Services Authority until it was disbanded in 2013, said city-states like Singapore are now international property markets, and using interest rates alone would do some “pretty weird things” to their economies.
“It takes a hell of a lot to control an out-of-control property boom with an interest rate,” he said in Singapore on Tuesday. “To deal with them, monetary authorities and regulators need an array of tools and powerful macroprudential tools.”
Elsewhere, macroprudential measures weren’t embraced so quickly. Australia’s central bank Governor Glenn Stevens was reluctant to reimpose them, arguing that they were scrapped down under from the 1980s because people always found a way around them.
“As an economist, you always regard macroprudential rules as second best,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd., reflecting on Stevens’s views. “You always prefer to raise interest rates and let the market sort itself out. But in the exceptional circumstances that the world has found itself in the last few years, they do seem to have proven their worth.”
Across the Tasman Sea, New Zealand’s central bank moved faster. In October 2013, it told banks that only 10% of their portfolios could be composed of home loans with low down payments.
It relaxed that limit to 15% in November for everywhere except Auckland, where prices continued to rise. It also required investors buying in the country’s largest city to have a deposit of at least 30% of a property’s value to qualify for a mortgage.
Australia succumbed to the inevitable as prices in its two biggest cities rocketed amid record-low rates. In December 2014, the banking regulator urged lenders to limit growth in mortgages to 10% a year, and in July last year it gave the four largest banks a year to increase the average capital they hold against mortgages to 25% from about 16%.
The measures forced Australian lenders to raise mortgage rates for property investors in July and for owner-occupiers in November, the first such increase in five years. That led to a 2.3% fall in Sydney home prices in the quarter ending Dec. 31.
In South Korea, regulators last year imposed stricter lending standards to curb swelling household debt and from as soon as February most new home buyers will have to take out amortized loans instead of those with interest-only payments.
Fitch Ratings is forecasting a sharp deceleration in house- price growth in Australia and New Zealand and a further fall in Singapore. It cited prudential measures as among the reasons, as well as very high prices that make housing increasingly unaffordable for owner-occupiers.
Macroprudential measures “had been a feature of policy in the US and many other industrial economies in the 1950s, ’60s, and ’70s, and it has remained a key aspect of the regulatory approaches in many emerging market economies in the 2000s,” Donald Kohn, an external member of the Bank of England’s financial policy committee and a former vice-chairman of the Fed’s board of governors, said in a speech in October. “In the wake of the GFC, macroprudential regulation has been reborn in advanced economies.”
International Monetary Fund research in March found such measures can have a “significant effect” on credit growth. Yet it also noted “asymmetric impacts” in that they tend to work better in boom than bust episodes.
Indeed, it’s not a case of uninterrupted success. In the UK, house prices continue to climb, fueled by a reduced supply of properties coming onto the market, a reality that even macroprudential measures can’t resolve.
But, the reality is that more countries may experiment with macroprudential rules given the IMF has downgraded global growth for this year, and several central banks, including New Zealand’s, are unwinding rate increases that proved too tough for their economies.
“Central bankers are going to have to keep interest rates extremely low for some time to come,” said Mr. Oliver. “The best way to deal with it is macroprudential controls.” — Bloomberg
from Manila Bulletin :
Energy-friendly buildings: A rule rather than exception
Because office buildings have been identified as among the biggest users of earth’s resources and among the significant contributors to climate change, the quest for savings in energy and water usage has become a constantly evolving process for global property managers.
He observed, for instance, that new top-end buildings in the major business districts are now veering away from floor-to-ceiling glass curtain walls, the big thing in the 90’s when many of Makati’s iconic corporate towers were built. Punch windows imbedded on concrete walls are again making a comeback in corporate developments primarily as an attempt to keep out heat in buildings and to lower air-conditioning costs and energy usage.Property managers today are continuously challenging current practices so that the usage of energy, water and other resources are kept to a minimum, according to Henry Torremonia, JLL head of property management in the Philippines.
The reality of high energy and operating costs are now reflected even in the design of buildings with JLL property managers giving inputs at the blueprint stage to building owners on how to lessen the load on the air-conditioning system, how to layout equipment for easy access and maintenance, and so on.
There are not only economic incentives for cost efficient buildings but also social ones, he adds. He is particularly proud that a number of buildings managed by JLL has won citations from the Department of Energy which hands out the Don Emilio Abello Energy Efficiency Awards.“We are keenly aware of operating, maintenance and replacement costs of office equipment and measure our performance against the savings we can generate for the building owner,” said Torremonia.
These buildings include among many others Citibank Square, Citi Tower, GT Tower. In addition, Executive Corporate Center property manager Carlos Cariaso from JLL won the Energy Manager Award.
In addition to being cost efficient managers, JLL property managers are also trained to anticipate trends so that building owners are assisted in helping meet the needs of occupants.
Torremonia observes, for instance, that among corporate employees “exercise has become very important and is fervently sought after.” Thus, he may recommend to a building owner to install bike racks and showers so that employees who bike or run to work can easily change clothes and look forward to going to work.
from Philstar’s correspondent, Richmond Mercurio :
BCDA asset sale on hold until next administration
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“Part of institutionalizing governance in BCDA is also to time it properly. We believe that this would appreciate more later or after the 2016 presidential elections. We believe that the Novai property could be at that time mature already for disposition. We will be having a masterplan of that portion,” Casanova said.
BCDA reported that the 475,009 square-meter parcel of land is now estimated to be worth more than P47 billion based on the current selling price of about P100,000 per square meter.
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Robert G. Sarmiento Properties
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