ECONOMIC ENVIRONMENT, REAL ESTATE TRENDS, AND POPULATION GROWTH

Mr. Ramon CF Cuervo and Hon. Vice President, Jejomar Binay who is also the Chairman of the Housing Urban Development Coordinating Council.

Maligayang Pasko! I know it’s too early but Filipinos traditionally starts the first day of “Ber” month as start of Christmas. No wonder, the Philippines is the only country in the world that has the longest Christmas celebration.

In its latest economic update that they distributed to the business community, our government has already given its early Christmas treat for the Filipinos- “A promising future lies ahead.”

Many news outlets reported that the Philippines posted a strong economic grwoth in the 2nd quarter, even the news channel, CNBC, branded our country as the “Asia’s new darling of investors.”

CNBC reported that the Philippines posted a 5.9% GDP growth rate in the second quarter, one of the highest in Asia and next only to China and Indonesia. This growth brought the Philippines’ first half GDP growth to 6.1%.

Factors that helped improved the economy is surge in export growth, service industry, reduced fiscal deficit, strong domestic demand, higher OFW remittances, and government spending.

After surging by 19.7% in May, export growth slowed to 4.2% in June, YTD up 7.7%.

OFW Remittances increased by 4.2% to $1.81B in June, the slowest rate for the year, YTD up 5.1% to $10.13B.

Government spending reached P162.6B in July, up 21.8%; YTD to P958.0B, up 15.1%. The budget gap hit P39.2B in July to bring the YTD figure to P73.7B.

The service industry of the country has impressed regional economists. And one of the best performing is the Business Process Outsourcing industry. This industry continues to have a strong growth.

On top of strong economic growth, Malacanang said that the Philippines will follow the lead of strong Asian economies by entering the Demographic Window to make the Philippines an investment destination.

President Aquino believes that wooing investors from abroad can help reduce poverty and create more jobs.

Demographic window is defined to be that period of time in a nation’s demographic evolution when the proportion of population of working age group is particularly prominent. This occurs when the demographic architecture of a population becomes younger and the percentage of people able to work reaches its height. (Source: www.wikipedia.org)

The business community will be enticed of Demographic Window because when labor supply and income earners are plentiful, the business becomes more productive and can contribute to the economy.

Population growth is good and has positive effects to the development and growth of our nation and people. The fact is that the nations that were pushing for birth control in the past are now suffering a negative birth rate. These nations like Japan, China, Spain, France, Singapore etc., are now trying to push up their birth rate but can’t do so because of the mind set of people who have been deceived by the false theory of “overpopulation”.

From left: Mr. Bernardo Villegas, Mr. Ramon Cuervo, Mr. Irwin Bryan L. Choa and his father, Mr. Bansan Choa.

The improving economy has been very good to the real estate industry too.

Amid the rising cost of housing, the country continues to attract local and foreign property investors because of the property boom in the Philippines.

This trend is expected continue due to a  significant rise in housing stock with 8,253 houses expected to be supplied in Metro Manila and that the prices of high-end residential projects to surge by another 9.9%  this year, according to Colliers International.

OFW remittances are one of the main factors that drive the real estate growth. Their remittances, in which the World Bank reported that it goes directly or indirectly to the real estate industry, have sustained the low-end and middle-scale housing projects.

Their remittances do not only create houses for their families but help create job and feed the retail trade in construction industry.

Aside from OFW remittances, the continued expansion of BPO industry and increasing population of expatriates has spurred the growth in real estate demand.

The employment in BPO industry grew to 638,000 people in 2011 with $10.9B in revenues and its continuing increase has prompted the real estate developers to take this advantage.

According to the economy expert, Mr. Bernardo Villegas, the Philippine economy is on the right track to be the 14th biggest economy in the world in 2050. Mr. Villegas is the Director of Center for Research and Communication, UA&P.

For retirees, many of them make the Philippines as their top destinations and their increasing population also increased the need for property market.

Other real estate trends:

  • Effective October 2012, BSP has expanded the coverage of the 20% cap on banks real estate exposures by including investments in debt and equity securities that ultimately finance the needs of real estate companies, loans provided developers for socialized and low-cost housing projects, as well as end-user loans to individuals. The exposure ratio stood at 14.52% as of the end of 2011.
  • ALI won the bidding for the FTI, a 74 hectare property in Taguig, with a bidding value of P24.33B
  • Century Properties announced it plans for a new project in Commonwealth Avenue- The Residences at Commonwealth. It is a 4.4 hectare property and will offer 1BR and 2BR configurations with an average price of P80,000 per sqm.
  • Megaworld launched Uptown Ritz, its 45-storey all-suite residential condominium project in Bonifacio Global City. 3440 units will be offered at P135,000 per sqm.
  • Vista Land launched their 30-storey project at The Fort- The Hudson.

It looks like the real estate industry will move forward and grow. The trend is positive even after the last quarter of 2012 but with a slow growth due to the “Ghost Month”. But it shall pick up towards October up to the yearend.

The Philippines is surely one of the fastest growing economies in the world and it is on the road to become the 14thlargest economy in the world by 2050.

This is good news to all Filipinos and indeed a good early Christmas present for the Filipinos.

THIS BLOG OR ARTICLE IS OWNED BY MR. RAMON C.F. CUERVO AND MAY CONTAIN LEGAL PROPERTY WHICH IS RIGHTS-PROTECTED. IT IS INTENDED FOR PUBLIC READING ONLY. COPYING, DISTRIBUTING, OR RE-PUBLISHING THE ARTICLE OR BLOG WITHOUT THE APPROVED CONSENT OF THE WRITER IS PROHIBITED. ANY ENTITIES WHO WANT TO SHARE THIS BLOG OR ARTICLE, PLEASE CONTACT THE WRITER AND ACKNOWLEDGE THE SOURCE:www.cuervopropertyadvisory.wordpress.com  AND WRITER: MR. RAMON C.F. CUERVO, WITH MR. RAPHAEL D. TORRALBA

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