- Written by Rizal Raoul Reyes
ALTHOUGH 2014 is the Year of the Horse, the Philippines property sector cannot achieve a galloping pace brought about by several factors.
“For me, the Philippines property sector is still on a jogging pace because it needs several reforms to stimulate the sector and attract more investors just like its neighboring countries,” said David Leechiu, country head of JLL Philippines, in a recent media interview held in Makati city.
Leechiu said the provision of the Constitution limiting foreign investors to 40-percent ownership in investments hinders the growth of the property and other sectors as well. He stressed that legislators should seriously look into amending the economic provisions of the Constitution to boost investment and capital in the country. Further, he said reforms must be pursued in joint ventures, property tax, capital gains and other important economic activities.
“I wish we can do more reforms to grow further,” Leechiu said. Assuming that the Philippines achieves a stable fiscal position and good credit rating, Leechiu said the property sector will have to create additional office space from 20,000 to 100,000 square meters from non-business-process outsourcing and traditional offices.
Office space leased totaled 365,000 sq m as of end-2012, while a total of 117,000 sq m were pre-committed also in the same period. Total committed space was 482,000 sq m.
In 2013 a total of 470,750 sq m were committed with 185,520 sq m leased as of end-2013, while 285,230 sq m were pre-committed.
Leechiu said, “The business-process outsourcing [BPO] sector continues to be a major growth driver, particularly in employment, with a total full-time employees of 960,000 in 2013.” He noted that the government is on target of hitting the 1-million mark in employment in the BPO sector in 2016. “We think the country can hit as high as 1.3 million workers in 2016.”
A lion’s share, or 75 percent, of the information communications technology-BPO is concentrated in the National Capital Region (NCR). In the Central Visayas region, 6 percent of the jobs are based in Cebu.
The top BPO locations in Metro Manila are Makati City (355), Quezon City (198), Fort Bonifacio (191), Ortigas (70) and Mandaluyong City (85). The government aims to generate $25 billion in revenues in 2016.
In the high-end condominium projects, JLL reported that the premier developers developed a total 3,322 units, with the majority of them achieving high volume of sales.
Further, the market for high-end and midrange developments also showed robust growth as indicated by the increase in demand. From the existing period (1995-2013), a total of 3,930 units were put up. The
demand continued to rise to 6,790 units in the 2014-to-2019 period.
demand continued to rise to 6,790 units in the 2014-to-2019 period.
Leechiu said the Philippine retail sector is also benefiting from the country’s economic growth as shown by the continuous development of malls not only within and outside Metro Manila.
Although the country’s tourism industry continues to attract large number of foreign visitors, Leechiu stressed there is a lot to be done to make the country one of the top destinations in the region. “In 2012 the Philippines received 1.8 percent of the total arrivals in Asia Pacific.”
In Asia and the Pacific Tourism Overview 2012, the Philippines, with 4,273 tourist arrivals, emerged 12th among 15 countries as the top destinations in the Asia-Pacific region. Topping the list were China (57,725); Malaysia (25,033); Hong Kong (23,770); Thailand (22,354); and Macao (13,557).
However, Leechiu said the country showed remarkable improvement in 2013, when it emerged fourth with 19.6-percent growth in international tourism receipts and an 11-percent growth in international tourism arrivals. The Top
3 were Thailand, Japan and Hong Kong.
3 were Thailand, Japan and Hong Kong.
The tourism department reported that 3.8 million foreign nationals arrived in the Philippines from January to October 2013. However, the bigger picture indicated that the Philippines has a lot of catching up to do in terms of attracting foreign investment. In 2012 the country only managed to attract $2.8 billion in foreign capital—much lower than Indonesia ($19.8 billion); Thailand ($8.6 billion); and Vietnam ($8.4 billion).
“We can’t develop the country overnight. But we have to make the right policies and regulations to attract more investors in the country,” he pointed out.
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