• Home
  
  
• Member Registration
  
  
• Member Control Panel
  
  
• REBAP Chapters
  
  
• REBAP 1 COOP
  
  
• REBAP Toastmasters
  
  
• Find Broker
  
  
• Contacts
  
  
• Site Map
  
  
  
• Administrator
  
  

“CONTINOUS GROWTH POTENTIALS ABOUND IN PROPERTY SECTOR”

We are more prepared to handle our woes. In fact, our local banks are still quiet because according to BSP, we have a strong financial system and the credit crunch proliferating in the developed countries has been addressed already by our financial institutions long before this new woes in U.S. and Europe. On top of that, the government is requiring increase in the minimum guarantee on bank deposits from Php250 to Php500 threshold depositor’s recovery from Philippine Deposit and Insurance Agency (PDIC). The East and Southeast Asian nations have also already agreed to an US$80 billion funds to counter global economic woes.

Now let us review our domestic outlook. Let us compare actual figures and forecast from the BSP, not only in relation to the property industry but to our local economy as a whole.

Our sustained and new labor markets (e.g. seafarers, nurses, caregivers, domestic helpers, laborers/skilled workers, etc.) on export service industry are still opening at 27% increase in deployment compared to previous years according to POEA.

As per BSP actual and forecast figures:
Our external debt to GDP ratio from the highest of 70.81% in 1998 to 35.57% in May 2008 after 10 years of decline.

Inflation peaked in August 2008 at 12.5, but expected to gradually decrease to single digit level at 9.2 on December 2008, still remains at an average of 9.3 from January to December 2008. In 2009, it is expected to levelize at an average of 5.9 from January 2009 at 8.6 to December 2009 at 6.4 with its lowest level forecast in July at 2.9 and August at 3.1.

Revenues against expenditures from January to June, 2008: we have a primary surplus of Php123 billion compared to 1997 to Php88.7 billion or an increase of Php35 billion.

Now, let us translate these positive economic indicators onto our the Philippine real estate industry. The real estate boom in the last 3-5 years may slowdown in the next six months but prices of properties will hold while the effect of peso currency which is now almost at Php50 per 1US$ will benefit our OFW’s and our export market, an almost 25% additional increase in their earnings. Focus is now being shifted to the so called current drivers in industry growth. Potentials still abound in OFW on housing, demand for Retirement Villages/Medical or Tourism, Hotel/Resorts and Leisure and demand for alternative office districts for Business Process Outsourcing (BPO).

Balikbayan Market: OFWs on the Housing Sector:

New Labor markets are still opening and will sustain for the next five years or more:

Filipino Seafarers in Japanese Merchant Fleet continuous to dominate the highest labor force deployment. Mr. Koichi Fujiwara, Director General of the Japan Maritime Bureau says, in 2004, 25,031 out of a total of 34,612 seafarers which represents 72.3% are Filipinos while in 2005, 26,546 out of a total of 37,035 or 71.7% are Filipinos.

Nurses in Japan according to a Report No. 6 of the Study Group on the Labor Supply & Demand of Nurses for Japan Ministry of Health in 2004 reveals that the supply shortage of nurses are in 2006 (41,600); in 2007 (41,700); in 2008 (37,100); in 2009 (27,900); and in 2010 (15,900).

On caregivers, also in Japan alone, according to the Japan Ministry of Health, Labor and Welfare Trends and Forecast for Caregivers based on actual numbers form 2000 to 2015. In 2010, they would need 1,215,200 (caregivers) over total of 13,792,487 (elderly – over 75 yrs. old) or 11 (elderly – caregiver ratio) and in 2015 their needs would be 1,310,000 (caregivers) over a total of 15,735,000 (elderly – over 75 yrs. old) or 12 (elderly – caregiver ratio).

Based on POEA and BSP figures, in 1998 around 6 million OFW deployed had remitted their dollar earnings amounted to US$8.0 billion while in 2007 around 10 million OFW’s deployed had remitted around US$16.0 billion. About 87% comes from OFW’s, Balikbayans and foreigners. OFW’s invest money on buying their homes with 30% of income spent on housing.

Availability of loan portfolio of about Php30 billion on lower interest thru Pag-Ibig Housing loans at 6% per annum for 25 years while on private banks, mortgages rates ranges from 8.5% to 12.0% fixed for a term of 1 to 5 years. Sub-prime credit in U.S. is not a major issue here because we have strong fundamentals in our mortgage system.

From 2005 to 2010, housing requirements about 3.76 million houses, 70% coming from the new households and rest from 2005 backlogs.

RETIREMENT FACILITIES

Data from JCER March 2007 Demographic Change and the Asian Economy, the projected demographic profiles – Ratio of Over 65 years old to Total Population (in %), the Philippines projected in 2050, will only be at the rate of 13.3% against Japan 40% , Korea 39.5%, Hongkong 32.7%, China 26.1%, Singapore 22.5% and Malaysia 15.7%.  The unregulated population control in Philippines now working to its favor being the youngest among the Asians.
-     A study was conducted by Healthcare Coalition Institute (HCI) yielded the following given the right strategy.  “The Philippines has the capacity to support between One million to Three million Expatriate Retirees bringing an average of at least USD 1,500 per retiree per month translated to USD 18 billion to USD 54 biillion per annum.

-     From the U.S. Census Bureau, International Database, those considered “young” retirees in selected markets from 6 countries (Japan, Korea, Taiwan, U.S., Europe and China) a total of 727,000 in 2006, 800,000 in 2010 and 912,000 in 2015.

-     As of 2007, the total number of hotel rooms in Metro-Manila registers at 13,500 rooms.  Demand for more hotel rooms to rise with projected tourist arrivals to accommodate 3.5  million tourists in 2008 from 3.01 million in 2007.  The expected surge would generate US$5.8 billion in international tourism receipts.

     In Makati alone, DOT accredited hotels registers at 74.9% occupancy rate from January to December, 2007.  Business like BPO and leisure trip on major tourist destination will sustain the high occupancy rate by 80%.

     Growth in tourist arrivals to encourage investments in the hospitality industry.  In 2007, the challenge is to increase the 200,000 medical tourism industry by developing medical hotels on certain tourist destination area.

            Update on the upcoming Hotel and Resort Developments:

• Makati – Kingdom Hotel, St. Gilles Hotel
• Fort Bonifacio – Shangri-La, Landmark 66 Office/hotel, Twin Towers 5 Hotel-Star Hotel Bay Area – Regent Hotel and Radisson Hotel
• Cebu – Ultima Prime, Sofitel Cebu, Marco Polo Plaza (expansion), Legends Hotel Cebu and Kandaya –Daan Bantayan Cebu
• Boracay – Crown Regency Resort and Convention Center, Shangrila – La Boracay, The Regency Lagoon, Boracay West Groove (expansion)

BPO on OFFICE SECTOR FORECAST

Rental rate levels will start to decline in Metro-Manila CBD’s driven by growing sub-lease market and emergence of alternative business districts.

     BPO companies will move out of Grade A high rise office buildings into new I.T. building or converted warehouses in alternative business districts due to lower cost.

     BPO (Offshoring and Outsourcing) growth projections to highly urbanize center in the provinces like Tacloban, Laoag, Tagbilaran, Naga and Tuguegarao in 2008, also in Kalibo, Legaspi, Roxas, Butuan in 2009 and Puerto Princesa, Dipolog, Cotabato and General Santos.

     All the above current drivers in the property industry were highlighted in the last National Convention of Real Estate Brokers Association of the Philippines (REBAP), Inc., an association of certified real estate licensed brokers with more than 600 members in 22 Chapters nationwide held last November 26, 27 and 28, 2008 at the world-class Mt. Malarayat Golf and Country Club at Lipa City  with Batangas Vice-Gov. Marc Leviste and City Mayor Oscar Gozos welcoming the delegates and invited main guest of honor and speakers were Mr. Ramon C.F. Cuervo III of R.A. Cuervo, Inc., DOT Secretary Ace Durano represented by Mr. Joji V. Gregorio of Philippine Convention and Visitors Corporation, PRA Administrator Edgar Aglipay and Mr. Rodolfo Torres, author of 33 Amazing laws on Prosperity and Success represented by Mr. Joe V. Abadesco, Chairman of Phil. Society for Training and Development have updated the delegate-participants on important topics in economy and the growth potential and potential problems and concerns in housing, tourism on hotels/resorts/medical tourism, retirement activities, and other inspirational and motivating topics.

     All the above positive indicator propels optimism.  Certain factors in our economy that will suppose to pose major effect like before (i.e. dependency to export trade with U.S. and Europe) which are longer considered critical this time, in fact, our Bureau of Customs reported an increase in export last August 2008.  The Philippines will survive the financial storm despite the political protests on Con-Ass or Cha-cha, series of senate investigations, presidential candidates wrangling for the forthcoming 2010 local election and the unsolved peace and order in Mindanao.

-End of Article-