Philippine properties took center stage once more at last month’s 2016 Annual Realtors Conference and Expo held at Orlando, Florida by the National Association of Realtors (NAR) – the 1.1 million-strong “voice of real estate” which chose CREBA as its sole cooperating association in the Philippines since 2011.
This keen attention to investing in the Philippines is not surprising as key figures speak for themselves. The Philippine economy accelerated the fastest in East Asia at 6.9% during the first quarter of the year amidst sustained growth in investments and household expenditures and ramped up public infrastructure spending. Prospects for economic growth remain rosy, given the stable inflation environment, improved job situation, overseas Filipino workers’ remittances, and higher foreign direct investments.
Demand for residential properties is mainly driven by the middle class, particularly OFWs who repatriated about $24.3 billion last year — nearly a third ($7 billion) of which went to property investments, according to Bangko Sentral.
Of the 15 Million Filipinos working and residing abroad, at least 3.5 million are in the United States, 2.3 million in Asia, 2.2 million in the Middle East, and the rest are spread out in Canada, Europe, the Pacific Islands including Australia and New Zealand and the United Kingdom. OFW remittances in 2014 hit the $25.8 billion mark and is seen to rise to as much as $28.2 billion in 2017.
From a $3.2 billion industry in 2006, the BPO sector was seen to grow to as much as $25 billion in the Philippines this year. It has also opened a lot of opportunities and new centers of business activities in many major cities. At its infancy, BPO operations caused an explosion of office space occupancy and employment opportunity in many spots in Metro Manila as well in Cebu, Pampanga, Baguio, Dumaguete and Davao. Recent years have seen the “next-wave cities” hosting a long line of new industries locating in their areas, such as Iloilo, Bacolod, Cagayan de Oro, Batangas, Naga and Legaspi, Tacloban and Subic where new residential projects, malls, and condominiums sprout like mushrooms, attracted by the nucleus of professional workers moving to the BPO locations.
NEDA cited the services sector as a driver of property market growth, hence, CREBA thankfully finds the economic cluster’s position against a proposed 2-year moratorium on the conversion of agricultural lands to human settlements, commercial, industrial and other non-agri uses a necessary step to keep this growth momentum. We can expect developers to build more across the country’s central business districts, in and out of the metro.
The growing population of the country’s young professionals will be a source of sustained demand for residential properties, as projections point to an increasing share of the 30-49 age group in the next couple of decades.
By the year 2040, 66.8% of the country’s projected population of 141.7 million will be part of the 16-64 age bracket, per the National Statistical Coordination Board. This means that the Philippines is on the cusp of what BSP defines as a “demographic sweet spot” — a period when a country has the most number of people available to participate in its workforce, hence, a higher combined spending power.
Not to be missed out on is the huge economic power of the “baby boomers,” who, today, aged 60-70 or above, are very qualified to invest or buy properties either as a family house or second home commanding a very big market for real estate for various purposes, including retirement, worldwide. (Fortunately, this writer came ahead of this baby group, and is beyond the usual property buying spree that comes with the “boomers” age.)
Our tourism arrivals hit an all-time high of almost 5 million last year with South Korea leading the top 10 source markets at 1.34 million tourists. The others nine are the United Stated, Japan, China, Australia, Singapore, Taiwan, Canada, Malaysia and United Kingdom.
This is one of the best times to invest in Philippine real estate. Through the vast NAR network, we get to connect with a million property professionals around the globe. CREBA trusts in this network to help Philippine developers and practitioners find new markets and investors for their projects from all over the world and make a resounding call that we are very open to business.
Published in the Manila Bulletin December 2016