PEST Analysis

Political and Legal Forces

Economic Forces

Property as as investment
The Philippines real estate market is not only attracting investments from
Filipino expatriates but also from foreigners who are married to Filipinos. The
relatively cheap properties and the opportunity to make significant returns are a
major draw for foreign buyers, according to property developer Colliers
International. Frank Cimafranca, Philippine consul general in Dubai, also urged
Filipinos working in Dubai to consider investing their income in real estate. It's a
better alternative to keeping money in the bank. The interest rates now are very
low and you'd be lucky if you get 2% in the bank, Cimafranca told Gulf News.

-EUROMONITOR
Socio-Cultural Trends

Technological

Filipino expatriates prefer the property option

BYLINE: Florence Pia G. Yu ?Deputy Web Editor
LENGTH: 801 words
Sector considered generally safer than the stock market and people are realistic
about what they can set aside
Dubai The real estate sector may be subject to economic cycles, but its status
remains rock steady as the preferred investment choice of Filipino expatriates in
the UAE and elsewhere.
Their investment choice takes in condominiums, plots and standalone homes,
with average spends being in the region of 4 million pesos (Dh400,000 plus).
That's also the reason why the country's property market has thankfully
circumvented the kind of turmoil that the US, Western Europe and GCC realty
went through.
"Demand is not speculative - investors don't buy property thinking about future
profit," said Cheng Rasul, head of the Philippine National Bank for the Middle
East. "In the Philippines, many people aim to have a house of their own, so
investments are realistic. Filipino workers abroad too are generally risk-averse.
"Many find investments in stocks risky since values may fluctuate. On the other
hand, the Philippine real estate is a safe haven."
But not all real estate purchases tend to get the desired results. A. Skrilec, a
business woman, pulled out on a deal after finding out that the property could not
be modified based on her requirements. "It is important that you get everything in
writing before you commit to a deal because some agents will say anything to get
your money," she said.
Sourcing home loans from government-backed mortgage providers can also
prove cumbersome. "Sometimes my monthly payments are not automatically
updated in their system for some reason and I get these notices of non-payment.
My next goal is to close this loan so I will have less headaches," Skrilec added.
Then there's the financial obligation that comes with the purchases. Emily
Abregana Anaya, who moved from Bahrain to Florida, said she and her husband
invested in a 3.5 million peso (Dh294,170) residential property in the Philippines
and a 200-square-metre plot which she bought for 350,000 pesos but is now
worth 1 million pesos.
"We plan to purchase additional lots," she said.
Strong returns
Her preferred investment mode requires purchasing land directly from the owners
instead of the developers since "their prices are overboard and inappropriate to
the value of the property that you get. Thus it is smarter for you to build your own
home in your own lot."
What is her idea of a good property investment? "It should give you a return of at
least 20 per cent." Lito Echevarria, a radio presenter in Dubai, purchased a
house and plot that is now worth twice what he price.
"Real estate is the easiest investment option because it doesn't require complex
market knowledge, like when you invest in stocks."

Russell Jay Paca, a Dubai-based engineer, saved for a few years to realise the
dream of owning a two-storey duplex apartment worth 7 million pesos. He has
since gotten a substantial return on investment from the rent on the first
apartment. The other unit serves as the Pacas' vacation home.
Real estate is still one of the best investments in the Philippines." It's not just
Filipino expatriates who are investing. The realty market attracts a lot of attention
from foreign investors. Last month Algemene Pensioen Groep, one of Europe's
biggest fund managers, invested 2.25 billion pesos in Century Properties, thus
extending a major vote of confidence.
Filipino expatriates want a safe haven or a trophy to show for their years of work
in foreign lands. Just look to Google for more proof. Type in "Philippine real
estate" and you get more than 75 million results. No place like home.
Bloomberg
Steady demand
Potential buyers and guests look at a model unit of a condominium by SM
Development Corp in Manila.
investment
ownership
citizenship paramount
Filipinos residing in the Philippines or abroad but have maintained their
Philippines citizenship are entitled to own property in the country. Natural-born
Filipinos with dual citizenship also enjoy the same privilege, provided they have
not renounced their Philippines citizenship.
Corporations in the Philippines whose capital stock is 60 per cent Filipino-owned
may also own non-agricultural private land.
Those entitled to own property under limited conditions include natural-born
Philippine citizens who voluntarily opted to acquire foreign citizenship through
naturalisation.
Unlike Philippines citizens, former citizens who are natural-born Filipinos are only
entitled to own either 5,000 square metres of urban land or 30,000 square metres
of rural land in the Philippines for business or other purposes.
Foreign citizens and corporations may also acquire and own condominium units,
but the land on which the building stands must be owned by a condominium
corporation 60 per cent of which is Filipino-owned.
- Staff Report
Quote Attribution
Quote Title
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Newspaper

PH property market seen to be hottest in Asia

BYLINE: Riza T. Olchondra
LENGTH: 385 words
he Philippine office sector is among the most dynamic in Asia and is growing at
record levels, according to officials of CBRE Philippines. The commercial real
estate services firm said Metro Manila was leading the country's office market,
with occupancy rates hitting 97 percent across Central Business Districts (CBDs)
in the first quarter of 2013.
In the office rent market, Manila is among the areas where rental growth is
accelerating, alongside Bangkok, Taipei, Tokyo, according to industry data.
High investor confidence brought vacancy levels to hover at an all-time low of
3.21 percent in Metro Manila from the recorded 3.43 percent in the fourth quarter
of 2012 amid economic growth, credit upgrades, cost-effective rental rates, the
influx of expanding multinationals and manufacturers, and expatriates moving
from renting to buying properties, said CBRE CEO Rick Santos in a briefing on
Wednesday.
Combined with the effect of anti-speculation taxes, tighter rules, and sky-high
property costs in saturated markets such as China, Hong Kong and Singapore,
more property investments are expected to boost Philippine developers, said
CBRE vice chairman and global corporate services chief Joey Radovan at the
same briefing.
Radovan said that even with the challenge posed by a strong peso, the
Philippines remained among the most cost-effective and attractive (with a young
and talented labor force) destinations for BPOs and real estate investors in Asia.
Makati City remains the country's top CBD as it offers the highest quality Grade A
and premium office buildings available in the market, Radovan said. Makati
largely gained from the expansion of multinational corporations, with the CBD's
vacancy rating down to 5.07 percent in the first quarter from 5.45 percent
recorded in the previous quarter.
Declining office space vacancy put upward pressure on rent, pushing average
asking lease rate up to P890.27 a square meter a month for the first quarter of
2013.
Radovan said vacancy rates in Bonifacio Global City (BGC), Ortigas, Alabang,
and Quezon City fell below 5 percent in the first quarter, benefiting from the
tightening of supply and increasing rates in Makati CBD.
CBRE research also showed that the growth of hiring for BPO full-time
employees (FTE) was highest in BGC, Muntinlupa and Quezon City.
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Newspaper

No real-estate bubble in Philippines-CBRE

BYLINE: Roderick Abad
LENGTH: 537 words
THE Philippine real-estate market continues to show no signs of a bubble in the
residential segment, amid the growth in both the demand and supply of housing
units in the country.
This, according to CBRE Philippines, could be attributed to the countrys robust
macroeconomic fundamentals, as well as the preemptive measures implemented
by the Bangko Sentral ng Pilipinas, which is set to release the real-estate price
index by end of this year to eliminate further the risks of a property bubble.
Not to be ignored also is the cautiousness among property players as regards
their development projects, which somehow help in the prevention of the burst
period from happening soon, the company added.
With constant real-estate market activities, prospects for the residential market
remain bullish for 2015 given that the demand and supply will continue to
become stable as requirements for housing prevail.
Following last years numerous project launches and solid demand that led to the
total supply of condominium units exceeding the 30,000 mark, the uptrend is
seen to continue reaching more than the 50,000 level for the full year of 2015.
Makati accounts for the biggest share of new stock per city at 27 percent,
followed by Quezon City, 23 percent; Taguig, 19 percent; Manila, 7 percent;
Mandaluyong, 7 percent; Pasig, 7 percent; and Pasay City, 4 percent.
The ever-expanding business-process outsourcing industry and steady flow of
overseas Filipino worker remittances continuously bring growth in the residential
market, with the latter driving the mid-end housing demand for both horizontal
and vertical developments.
Meanwhile, the increasing expatriate population has changed the luxury-housing
landscape.
With a strong take-up of residential units, CBRE Investment and Capital Markets
Manager Alexandra Katindig said developers are encouraged to launch more
projects and implement new strategies to hike their sales.
One of the popular trends is the development of township or mixed-use projects
for end-users convenience.
Aside from the allocation of retail or office space, these self-sufficient
communities sprouting in Metro Manila also have a residential component.
Katindig said this only shows that the residential segment derives positive
spillover effect from other booming sectors.
Another strategy by developers that are presently evident is their foray into other
residential subcategories.
Stiff competition in the metropolis has led national developers to embrace the
trend in building horizontal subdivisions in the fringes of the capital, proof of
which is the recent launch of Ayala Lands high-end project in Cavite, The
Courtyards.

Also with Ayala Land are SM Development Corp. (SMDC) and Federal Land-both
of which are in the planning phases of their pioneering horizontal projects, as
well.
By entering the luxury market, some players are also widening their market
reach, like Filinvest Land Inc., which has started building its first luxury condo in
Alabang, Muntinlupa, called the Botanika Nature Residence.
SMDC, on the other hand, has launched Air Residences in Makati City, which is
under its high-end brand, SMDC Premier.
The Sy-led developer is eyeing to venture in the economic housing segment, as
well.
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Newspaper
Property loans; so whats the problem
LENGTH: 510 words
THE Philippine property sector has been under intense scrutiny for many years.
Because of the total collapse of the real-estate markets in the United States and
Europe, which led to the current global financial crisis, property is an easy
whipping boy for any potential economic problems.
However, the industry is totally different here in the Philippine from how the
projects are funded, constructed and sold. Further, the terms of the mortgages
that the buyers take out are significantly different than in the West.
Yet, the self-proclaimed experts both here and abroad continue to chant the cultlike mantra, "If property is booming, it must be bad."
The primary reason that the Philippine property sector is financially sound is that
the Bangko Sentral ng Pilipinas (BSP) is not "owned" by the banks as in the
West. The Western central banks, through political donations by global financial
institutions, in effect bribe politicians to make sure the central banks favor the
policies that these institutions desire.
The central bank must act like a referee in a boxing match to insure that things
do not get out of control. But that requires that all the players accept the need for
an independent referee as happens here in the Philippines.
Property lending practices are much tighter and controlled in the Philippines and
that has created a sound and growing property sector.
The BSP released numbers on property-sector loans data showing real-estate
loans of the banks increased by 6.8 percent at end-2014. Immediately the wailing
began that there is a property loan "bubble." Yet, a closer look shows how sound
these loans really are.
The loans represent 85 percent of the banks exposure to the real-estate sector.
The other 15 percent is the banks investment in real-estate securities. Sixty
percent of the real-estate loans were extended to land developers, construction

firms and other corporate entities. The remaining 40 percent went to individual
households.
In other words, the majority of the loans went to multibillion-peso companies that
develop the projects, all backed by hard assets. Further, BSP rules now require
that these loans carry higher collateral, allowing loans of up to 60 percent of the
market value of the collateral, from the previous 80 percent.
But if these property loans are as dangerous as we have been told for years, we
should see the negative symptoms. That is not happening. At end-2014, the
banks nonperforming real-estate loans equal 2.47 percent of the total real-estate
loans. This was also the lowest nonperforming real-estate loan ratio since
December 2012.
Further, all nonperforming loans (NPL) dropped to an historic low of 1.82 percent
of total loans in December last year. The banking industrys loan-loss reserves
represented 142 percent of their NPLs, including real estate.
The only way property loans are going to be a problem for the Philippines is if the
BSP and the banks begin acting as foolishly with their financials as the banks did
in the West for 20 years. That is not going to happen in the Philippines.
Making real-estate marketing both personal and digital
BYLINE: Amor Maclang
LENGTH: 1764 words
JUST like any business is a living, breathing thing, an entrepreneur has to be
able to adapt over time. These words of Canadian businessman and media
personality Robert Herjavec ring loud and true, especially in a continuously
changing global business landscape.
The evolution of business has been hastened by the advent of high technology,
particularly online technology-pervading every aspect of our lives, changing the
way things are done, and practically requiring businesses and consumers alike to
adapt in the process. However, in return, online technology offers unparalleled
convenience that has made it rather difficult to imagine life without it.
So, as the whole world moves online, entrepreneurs have promptly followed suit,
creating a fresh business landscape that exists primarily in cyberspace. One
such entrepreneur, who has made a mark in online business, is Jacqueline van
den Ende, managing director and founder of Lamudi Philippines, an online realestate portal.
Van den Ende was the founder of De Kleine Consultant, the first nonprofit,
student-run, strategy consultancy with offices across the Netherlands, the United
Kingdom, and Sweden. She relocated in the Philippines in November 2013 to set
up Lamudi Philippines, which can be found in www.lamudi.com.ph.
Lamudi Philippines is part of the global Lamudi network, which covers more than
30 countries across Asia, Africa, the Middle East and Latin America. The online
property finder has been around for just a year and a half, but it already has
90,000 residential and commercial property listings.

Recently, Lamudi Philippines acquired MyProperty.ph in a bid to integrate and

strengthen the online real-estate market in the Philippines.
What was the actual objective of creating Lamudi Philippines? What were the
reasons that you felt necessitated the creation of a new real-estate portal in the
country?
Van den Ende: The Philippines is one of Asia's and the emerging world's bright
spots. Economic growth is the strongest in Southeast Asia and second in the
Asia-Pacific region, after China. We felt that the Philippine market is ripe for a big
player to dominate the online real-estate game, basically due to a number of
reasons. Internet penetration is increasing really fast, which, right now, is about
38 percent, and is even expected to cross the 50-percent mark, before the end of
2015.
Also, during the time we came up with Lamudi Philippines, no single player
dominated the market, so we felt that the Philippines is one of the few Asian
markets with huge potential. Moreover, the Philippine real-estate market is
buoyant, dynamic and ready to go digital: Developers are earmarking
considerable amounts for online marketing and, based on our research in 2014,
90 percent of licensed brokers see the Internet as the first go-to tool during the
house-hunting process.
Real estate is very personal-selling-driven. The insurance industry once tried to
bypass the brokers and the sellers by offering online insurance buying, and it
was met with some initial resistance. I want to understand how you intend to
address possible sensitivities that might arise due to the presence of an online
real-estate portal?
Van den Ende: In Lamudi what we do as an online real-estate portal is to connect
sellers with real-estate buyers. We do not engage in real-estate transactions. So
we do not get commissions on any sale. In that sense, there is no bypassing of
any seller. What we really do is lead generation for brokers.
We use a subscription model for the business. Brokers basically pay to post their
listings. Then what we do as a company is that we invest heavily in online
marketing-in Google Ads and pay advertising on Facebook. The consumer is
moving online. Already around 40 percent of Filipinos are online. If the consumer
is online, you need to be visible online as a broker. But that's quite challenging,
because even if brokers have their web site-and that is only around 5 percent of
all brokers-how do they ensure that their web site is visible on Google? If their
web site does not rank on the first two pages of Google, most likely they will
never get any visitor.
That is where Lamudi comes in. We help people be visible online by doing the
online marketing for them and we help brokers to be found through the Lamudi
web site.
What is in the pipeline for Lamudi Philippines over the next 12 months?
Van den Ende: Our focus is on growth, particularly listing growth. We want to
solidify our position as the most comprehensive database of unique property
listings-for rent or for sale-in the entire Philippines. We need to get to a point,
where every Filipino trusts that they no longer have to go to any other web site
but Lamudi because every single listing is on it. That is one of the prime focuses.

How do we manage that when some properties are not exclusively listed?
Van den Ende: That is, indeed, an important characteristic of the Filipino realestate market. In the Netherlands we have an exclusive market. Every property
has a broker.
Here, pretty much any agent or any broker is accredited with every developer, so
they can pretty much sell any project in the Philippines. With that realization, we
decided to not allow unlicensed agents to advertise on Lamudi because they can
only advertise what brokers have to advertise. We, therefore, only work with
Professional Regulation Commission-licensed brokers. Since even PRC-licensed
brokers can do double-listing, we, thus, work directly and exclusively with
developers for preselling projects. This avoids the double-listing problem.
Brokers can only list for the secondary markets.
Lamudi seems to be revolutionizing the way selling real estate is done. But, aside
from this, what are Lamudi's other contributions to the local real-estate industry,
particularly in terms of marketing?
Van den Ende: We believe that Lamudi contributes to the professionalization of
the local real-estate industry. A lot of people think that having a web site is good
enough. However, there is a major difference between simply being online and
being successful online.
We, thus, came up with an education program, called the Lamudi Online
Academy, where we teach people every aspect of being successful online. We
cover many topics, like online marketing techniques managing Internetgenerated leads.
We do a lot of big trainings not only at management levels, but also at levels of
sales teams. We work with a lot of big developers, like Robinson's Homes and
Megaworld. This is from five to a couple of hundred people at a time. We've been
doing this since we started. In fact, we have seminars in our office every two
weeks.
It seems that you have a lot of information and education campaigns for brokers,
as well as initiatives at growing and educating the market itself. This is definitely
beneficial for the sellers and the buyers. However, how does this redound to the
company's benefit?
Van den Ende: It's very important to educate people on being successful online
because it also contributes to our objectives as a company.
If brokers know how to do selling online and create better listings, that would also
be beneficial to the quality of our site. For example, we generate leads for our
clients, and they get from us e-mails and phone calls. The response rate to these
e-mails and phone calls is often dramatically low. Only 30 percent of brokers
respond to our clients, who are inquiring about their property within a day. But, if
they respond a day later, the chance of converting that lead into a sale is 60
times lower. So it works both ways. If they understand how online works, they
would respond appropriately and this would be beneficial to the quality of our
listing.
What are the other areas of the local real-estate industry that Lamudi hopes to be
able to help address, correct or enhance?

Van den Ende: Our focus, first and foremost, is on creating a complete overview
of all properties online, which will increase transparency. For the people
searching for property, Lamudi presents one comprehensive source of data of
legit listings.
Legitimacy is very important because there are a lot of portals and many
instances of fraud cases when there is insufficient control of who actually is
advertising and insufficient control of the actual listings.
So, our objective is to come up with a listing that is trusted and comprehensive.
We want to ensure that we have every single listing online. We also collect a lot
of data that helps to inform customers. We write a lot of articles to inform the
buyers, like what should you pay attention to when getting a housing loan, or
what is a property appraisal and why should you do it?
In terms of the professionalizing of brokers, it's not only about going online. It's
also about digitizing the brokers' entire administration. I was surprised when I first
came to the Philippines to see so many brokers having piles of papers and
having their listings on a whiteboard and hardly knowing how to use the
computer.
In this regard, we have come up with Lamudi-listing classes where all the brokers
come and learn to do uploads. Also, in the future, we hope to create tools to help
people digitize their administration.
What do you see are the top trends for the digitalization of the real-estate market
in Asia?
Van den Ende: It is really interesting to look at the region because you see a lot
of differences. If you look at, for example, Myanmar and Bangladesh, where we
also have Lamudi companies, they basically precede the Internet. Internet
penetration is less than 5 percent in Myanmar. The market is not there yet, so we
are driving the market.
However, markets like Indonesia or Thailand are three to five years ahead of the
Philippines in terms of digitalization and being online. Most of the brokers are
already online, and there are already a large number of very successful realestate portals catering to that market.
The Philippine market is exactly on the pivotal point, where people are shifting
from offline to online; that is why we see such a high interest. Everybody
understands that he needs to go online. People are now starting to post online,
but for a long time to come, and, I think, this is something that will stay for next
three to 10 years, it will always be a mix of offline and online.
Brokers will use online channels but referrals, and possibly ads in newspapers
and magazines, will still stay for quite a while. Although everybody is exploring
online, developers are still generally very conservative in shifting from offline to
online. As such, there is still much work to be done.
July 14, 2015 Tuesday
PH property market buoyed by 3 key factors
BYLINE: CATHERINE TALAVERA

LENGTH: 366 words

SOURCED FROM CURRENT GLOBAL NEWSPAPERS AND JOURNALS
Buying power, robust office sector and new markets outside the metro are the
major factors now contributing to the bullish performance and optimistic outlook
of the Philippine property sector.
"The increasing spending power of investors, including the middle class, is
keeping the industry afloat," according to Lamudi, the global real estate portal.
The strong domestic consumption is also driving property developers to upgrade,
renovate and expand their retail assets, Lamudi noted.
A study conducted by Colliers International Philippines revealed that the retail
property stock in Metro Manila has increased by 182,000 square meters to 5.9
million sqm. in the first quarter of 2015.
The commercial real estate services company noted the demand for office space
has revved up the timing of construction of projects this year.
A robust office sector is a major, major catalyst for growth, Lamudi said, tracing
this phenomenon to the strong performance of the business processing
outsourcing industry.
"Three office buildings with 39,500 square meters of combined usable area were
completed as of the first quarter of 2015. Colliers forecasts that at the end of
2015, close to 576,000 square meters of usable office space will be delivered,"
Colliers said.
Another study by investment management firm Jones Lang LaSalle showed that
Metro Manila is now one of the world's Global 30 Megacities, joining the likes of
New York, London and Tokyo.
This development has a significant impact on Manila's luxury residential
segment, placing Manila among the top in the Asia Pacific region in terms of
sales \x96 with prices growing by 5 percent in January to March compared to
Jakarta's 6 percent.
Developers and consultants cited the property markets outside of Manila as key
factor in growing the property sector.
"Not to be outdone by Manila, other emerging markets from Luzon to Visayas
and Mindanao have enjoyed the benefits of a strong domestic property sector,
with notable developments in Tagaytay, Cebu, and Davao attracting not only
affluent local investors but also foreign buyers and millions of overseas Filipino
workers," said Lamudi.
OFWs, retirees are country's top residential market buyers
SECTION: Pg. S2/6
LENGTH: 440 words

Overseas Filipinos and retirees remain the most active buyers of residential
property in the Philippines, boosting market demand, a top official of an
international real estate services company said.
The bulk of overseas Filipino workers (OFWs) and retirees from around the world
residing in the Philippines or considering residence here who invest in the
property market targets mid-end residential development projects, Mike Mabutol,
director for investment properties and capital markets at CB Richard Ellis (CBRE)
Philippines, told delegates of the recent Asia-Pacific Marketing Power and Sales
Effectiveness property and marketing conference in Macau, China.
OFWs have long been a lucrative market for residential properties because of
their desire to provide a better life for their families. Mr. Mabutol added OFWs
prioritize investing their hard-earned income in residential properties. Retirees
have also ramped up property spending, mostly from life savings and retirement
benefits.
"This trend started four to five years ago and now we see these retired buyers
becoming more active in the market," Mr. Mabutol said, despite property woes in
other parts of the world, particularly the US.
To address increasing demand by OFWs and retirees, real estate developers are
coming up with affordable housing developments and condominium projects, with
investments ranging from P1 million to P2.5 million, according to a CBRE
Philippines report. In the 2008 to 2013 period, 28 residential condominiums are
expected to rise in Makati City, providing more than 18,000 units. During the
same period, Fort Bonifacio is expected to have 33 residential condominiums,
which will provide more than 11,500 units.
High-end residential condominiums are also in demand. As a result of increased
demand, prices for high-end residential condominiums in Makati City have risen
from P90,000 per square meter in 2006 to P100,000 to P130,000 per square
meter this year. Low interest rates and flexible financing terms have helped boost
the residential property sector. Trent Frankum, CBRE Philippines General
Manager, said mortgage rates are hovering in a range of 8.5% to 12%.
Another bright prospect for the Philippine residential market is the development
and market positioning of retirement villages for expatriate "empty nesters."
The Philippine Retirement Authority (PRA) and the Philippine Retirement Institute
(PRI) encourage local and foreign investors to support retirement community
projects. Road shows in Korea, Japan and the United States have promoted
Philippine retirement villages, offering tax incentives for pioneering projects in the
country.
Davao City is PHL's emerging real-estate center after Cebu
BYLINE: Manuel Cayon
LENGTH: 435 words
This premier southern Philippine seaport is becoming the most frequently
inquired city after Cebu City for foreigners and overseas Filipinos seeking

realestate investments in the Philippines, a Filipino realestate company executive

with an active online site said here on Friday.
The city is turning in significant numbers in inquiry from the online realtors' site,
FilipinoHomes.com, that kept tract of all interests in acquiring or renting
properties for personal and commercial intention in the Philippines, said Arthur M.
Gonzales, vice president for Mindanao of the group that also carried the name of
the Internet web site that serve as a search portal for Philippine real estate.
On certain days, the site would monitor an average 2,000 inquiries daily from
across the world, but the bulk of them still coming from overseas Filipino workers,
he said.
There are other online search portals on real estate in the Philippines but he said
all indications were pointing at this city as the preferred site for renting and
acquisition of properties after Cebu."
Cebu is still the most sought place for real estate, propelled mainly by the
presence of major global players in the businessprocess outsourcing," he said.
However, the long period over which Cebu has lorded over the choice places
after the national capital, We can say that it is now on its 7 p.m. stage, where
there would already be a saturation of acquired properties."
Davao City is now on its 4 p.m. level, where investors and people looking for
residential and commercial spaces are currently scrambling for contacts and
looking around for suitable sites," he added.
Aside from its significant improvement in atmosphere in doing business, Davao
City also rode high on the overall splendid national economic growth and better
climate for investment.
He said FilipinoHomes.com is Filipinoowned company that is currently tagged in
the level of similar Weblinked realestate companies Century21.com and Remax,
the two highprofile US realtor Web portals, and its tracking of investments going
into real estate was logged at P8 billion in 2013. That's for our portal alone, and
did not include yet the transactions from the other private web sites and the free
online socialnetworking sites.
We can say that real estate remains a very robust and active industry in the
Philippines even up to the immediate future," he said.
In this city alone, we have monitored not less than P20 billion worth of
investments to be built within the next three year."
In fact, he said, All the major realestate developers and construction companies
are already here in the city."
OXFORD BUSINESS GROUP;
Real estate in the Philippines attracts inflows
SECTION: Pg. S1/8
LENGTH: 807 words

A YEAR of strong economic growth and high foreign direct investment (FDI) in
the Philippines has set the scene for a wave of new real estate activity during
2014.
Growing demand from the business process outsourcing (BPO) industry, rising
rents, a construction boom and a substantial increase in foreign remittances will
all play a part in driving the sector's expansion. A move by the banks to rein in
lending, meanwhile, should help allay concerns that a real estate bubble could be
forming.
The Philippines' property market has been buoyed by the country's strong
economic performance. Annual GDP growth hit 7.2% last year, exceeding both
the government's targets and many analysts' expectations, while FDI for the first
eight months of 2013 reached $2.8 billion, up 25.4% on the previous year.
Foreign remittances, meanwhile, peaked at an all-time monthly high of $2.06
billion in November 2013, according to the Bangko Sentral ng Pilipinas (BSP).
CONSTRUCTION LEADS THE WAY
Building work, in particular, is booming, sparked by rising demand for residential
and office space, especially in Metro Manila. Real estate and construction activity
combined now account for one fifth of the Philippines' economy, edging closer to
the manufacturing sector.
The Philippines Constructors' Association listed 24,400 private projects in the first
quarter of 2013, with data showing that residential buildings made up over 70%
of the ventures.
A shortage of housing is a major problem for the Philippines. According to a
report compiled by the Subdivision and Housing Developers Association, the
national housing backlog stood at 3.9m units in 2013, with data suggesting it
could rise to 7m during the next 16 years. Reconstruction efforts in the wake of
Typhoon Haiyan will also boost construction work and push up foreign
remittances.
BPO DRIVING DEMAND FOR OFFICE SPACE
Meanwhile, the expansion of the BPO industry has created high demand for new
office space. Manila placed second on investment advisory firm Tholon's 2014
ranking of top BPO destinations, while Cebu City ranked eighth. Several other
municipalities, including Davao, Santa Rosa, Laguna, Iloilo and Baguio, made
the top 100.
The BPO industry generated $13.3 billion in export earnings last year, according
to BSP figures, notching up 15% growth, with the central bank forecasting a
further expansion of 15% in 2014.
The commercial real estate services firm, CBRE Philippines, recently said it
expected the industry to continue expanding on the back of growing foreign
investment and demand for BPO office space. The firm added that competitive
leasing activity had pushed up rents in key office districts, including Makati. Office
rental rates in Makati's premium central business district reached an all-time high
of P1,200 per square meter early this year, but still remain lower than those of
other prime districts across Asia.
In a joint survey released early this year, PricewaterhouseCoopers and the Urban
Land Institute ranked the Philippines fourth on a list of Asia's best property

investment markets, on the back of positive forecasts and growth, ahead of

Tokyo, Shanghai and Jakarta.
PRUDENT PLANNING
Accessible financing has played its part in driving real estate development, with
stable overnight borrowing and lending rates, held at 3.5% and 5.5%,
respectively since October 2012, instilling market confidence.
BSP data shows that local banks' exposure to the property sector stood at
P900.1 billion in June 2013, an increase of 7% over the prior quarter.
With some analysts voicing concern that runaway growth could be putting the
sector and wider economy at risk, authorities have moved to introduce policies
aimed at controlling growth.
In February 2014, the BSP announced that it was considering implementing
stricter guidelines on real estate exposure while continuing with its policy of
closely monitoring market activity. "Based on our assessments, the lending
practices have not been sacrificed even as lending to the real estate sector has
increased. Overall, bank balance sheets have remained sound. The BSP will
continue to proactively adjust its policies to ensure that price and financial
stability are conducive to growth," the BSP governor, Amando M Tetangco, Jr.,
told OBG late last year.
Banks have also moved to restrict real estate lending in recent months.
According to a BSP survey, lenders across the country implemented stricter
credit standards on commercial real estate loans during the fourth quarter of last
year, with banks reporting wider loan margins, reduced credit line sizes and lower
loan-to-value ratios for real estate credit.
The BSP expects banks to maintain tighter lending standards for commercial real
estate loans in 2014, which will help keep a speculation- driven boom-bust cycle
at bay, while encouraging sustainable growth in a buoyant market.
Metro Manila now in Jones Lang Lasalle's top 30 investment cities globally
BYLINE: Mary Grace Padin
LENGTH: 519 words
GLOBAL real estate and investment management firm Jones Lang Lasalle (JLL)
announced on Thursday that Metro Manila is now recognized as one of its Top 30
Real Estate Investment Cities in the world.
Jeremy Kelly, director of JLL Global Research, said during the Asia Real Estate
Summit 2015 in Makati City that the Philippine economy's robust growth is crucial
in making Manila one of the most attractive commercial real-estate spots today.
He listed economic output, population, corporate presence, connectivity, realestate stocks and investment as some of the criteria that JLL considered in its
Global City Commercial Attraction Index in real estate and development.
The key feature of a successful city is about sustainable momentum, adaptability
and ability to reinvent itself. Manila definitely has these qualities, Kelly said in his
presentation.

JLL predicted that by 2030, Manila will be top 18 in the world in terms of city
gross domestic
product (GDP), having one of the highest economic momentum globally, along
with Jakarta and Istanbul.
Kelly also mentioned the Philippines's specialization in the business- process
outsourcing (BPO) sector as one of its strengths in the global city
competitiveness scale. He cited AT Kearney Emerging Cities Outlook 2014 and
Tholons Top Outsourcing Destinations in 2015, both placing Manila in the No. 2
spot.
The Philippines should leverage its position as a BPO destination so that it can
evolve fundamentally into a technology hub, Kelly added.
The city's population and demographics also play a big role in the city's success,
as it is one of the densest cities in the world. Kelly said Manila is on its way to
becoming a supersized city, reaching 30 million people by 2030.
This will shape endless possibilities and pathways to future developments.
Interestingly, many cities around the world are looking at densification as the
answer to some of their challenges, he said. It also provides the city with a huge
work force and numerous talents.
JLL also named other factors in a city's competitiveness, namely, transparency,
consistency, business friendliness, livability, sustainability, innovation, identity and
confidence, among others.
Sustaining the Philippines's success in the real-estate industry will rest on how it
absorbs its growth, Kelly said.
That said, he described Manila as one of the so-called multipolar cities, having
multiple central business districts (CBD)-cities that are close to their talents.
Kelly recommended that renovations should be made in Manila's infrastructure
system and mass transit in order to improve its potential in the real-estate
business.
He said major transportation should be near business hubs and that key gaps in
infrastructure should be identified to create a great sense of space and vibrancy
in the Metro.
Among JLL's visions for Manila are the realization of the Metro Manila Greenprint
and the Metro Manila Dream Plan by 2030: infrastructure spending equivalent to
5 percent of GDP, $65-billion infrastructure investment, new international airport,
first subway system, enhanced connectivity between CBDs, to name a few.
March 23, 2015 Monday
Office space segment to fuel property growth
LENGTH: 441 words
Office property is the most attractive investment segment in the Philippine
property asset class and will likely remain on this sweet spot in the next three to
five years, according to real estate consulting firm KMC MAG Group.

Michael McCullough, KMC MAG Group managing director, said in a briefing last
Friday that the outlook for the local property sector remained rosy, supported by
a low interest rate environment, monetary easing by major central banks outside
the United States and favorable feedback from investors.
Office property, McCullough said, remained the "most wanted" investment class
in Philippine real estate as strong demand from the outsourcing industry
continued to power the upswing for the market, in turn encouraging developers to
create more inventory. For this year alone, about 560,000 square meters of new
office space is expected to be built across the major central business districts,
nearly half of which will be located in Bonifacio Global City.
Apart from buying for their own use, demand for office property is driven by
investors, many of whom are diversifying from the residential segment. This has
prompted the development of more office condominium properties meant for sale
than for lease.
Gerold Fernando, associate director at KMC MAG, said that aside from
diversifying, investors were getting better yields in office property investing. While
the yield for the residential segment is steady, yield in the office segment was still
increasing alongside rising capital values, Fernando.
"And when you lease out office (space), its for a minimum of three years. You
dont have to fix it up. You dont have to hire an interior designer to make it pretty
or furnish it just for you to rent it out at P900 per square meter. On the office side,
even if its all concrete, you dont even have to buy air conditioning, you can lease
it out at P850 to P900/sqm also," Fernando said in an interview at the sidelines of
the briefing.
For units that are being offered through selling, one has to spend P100,000 to as
much as P170,000/sqm to buy a basic residential unit.
"But for office, even for bare space, its cheaper to invest. You get better yield and
less headache because youre dealing with a company (tenant) than an
individual," Fernando said.
"Its safe to say that the next three to five years will still be a good spot for the
office sector. I dont think that rental rates will be slowing down. Its been
increasing for the last five years and will still increase in the next five years," he
added.
Fernando said he expected rental rates in the office sector to grow at a
compounded 7 percent over the next five years.
NEDA cites challenges to real estate industry
BYLINE: MAYVELIN U. CARABALLO
LENGTH: 695 words
SOURCED FROM CURRENT GLOBAL NEWSPAPERS AND JOURNALS
DEVELOPMENTS in the Philippine economy bode well for the country 's real
estate industry, but there remain a number of major challenges that must be

aggressively addressed in order to maximize its full potential, the National

Economic and Development Authority (NEDA) said.
"The shape of real estate industry in the Philippines has changed dramatically
over the years, " Socioeconomic Planning Secretary Arsenio Balisacan said at
The Organization of Property Stakeholders Inc.-Land Registration Authority (or
LRA) Summit 2015 on Tuesday.
The property market grew strong over the last 20 years on demand for residential
and commercial properties against the backdrop of the changing economic
landscape in the Philippines, he added.
Balisacan, who is also the NEDA director general, noted the property market
across the board \x97office, residential, logistics, retail, and hospitality \x97is
poised for continued growth.
"While the property industry has already been doing very well in the past few
years \x97owing to a solid economic backdrop, stronger demand for BPO
[business process outsourcing] services, heavy consumer spending, and healthy
inflow of remittances from OFWs [overseas Filipino workers] \x97the sector is
seen to grow even more robustly, driven by the continued positive outlook on the
economy and the projected expansion of outsourcing industry within the next five
years, " he said.
Maximizing potential
For sure the country can maximize the full potential of the real estate industry,
but the government must continue pursuing relevant market reforms to remain
competitive and reap the benefits of the booming property sector in the region,
the NEDA chief said.
"Some of the critical constraints that need immediate action are the country 's
weak public infrastructure and low property market transparency and restrictive
ownership rules, " he said.
Balisacan emphasized that the government is now devoting greater focus on
infrastructure investment and putting in place comprehensive transport and
critical logistics infrastructure roadmaps to keep up with the growing business
hubs.
Another critical area of concern where policy reform is needed points to a low
property market transparency and restrictive ownership rules, he said.
"Toward this end, the government is striving to improve transaction processes as
well as legal and regulatory environments, " he added.
These include the liberalization of contractors ' licensing and registration,
promotion and development of domestic and overseas construction, and the
efficient implementation of dispute resolution mechanisms, the Cabinet official
said.
Balisacan said there is a need to pursue a number of important legislative
measures that will further reduce the cost of doing business in the country.
"For instance, the passage of the Competition Law last July 21 will undoubtedly
help diffuse market power and concentration in a spectrum of key industries,
including manufacturing and logistics, " he said.

Reforming the tax system and raising tax efforts to levels at par with regional
peers is also crucial to sustaining fast-paced growth and public infrastructure
development, he added.
Areas that need further institutional reforms include the tax effort among the selfemployed and corporations, curbing smuggling, improving the current regime for
small and medium enterprises (SMEs) and public-private partnership projects,
and rationalizing fiscal incentives.
The NEDA chief said access to financing also plays a crucial role in the real
estate industry.
"Unfortunately, the Philippines remain among the countries in South East Asia
that have relatively underdeveloped financial markets. We continue to face
limited access to finance via commercial bank loans and capital markets,
especially those for business set-ups and expansion, " he said.
The challenge is to ensure more avenues for accessible financing, not just
among property buyers but also SMEs, he said.
Balisacan pointed out that efforts to improve human capital formation and to
foster technological growth and innovation should be intensified.
Is PH real estate ready for Asean integration?
LENGTH: 793 words
Can the Philippines compete with its nextdoor neighbors in the Asean?
Property analysts are one in saying yes, but they also admitted of the presence
of some major hurdles on the way.
Property analyst Enrique M. Soriano III, Ateneo program director for real estate
and senior adviser for Wong+Bernstein Business Advisory, said: "No doubt, the
Philippine real estate industry can compete with the best of the Association of
Southeast Asian Nations. Technological innovation and bestinbreed designs
make the [Philippine] sector at par with the league leaders [Malaysia, Indonesia
and Singapore]. The stakeholders [aside from the endusers] are those in the
financial sector."
He added that in Singapore, "real estate is being traded much like a financial
commodity. Risk and return and rental yields are predictable."
Soriano, however, did see some obstacles. He said: "In the Philippines, we are
still in the infancy stage. Growth via financial intermediaries is still in the startup
phase. Providers of capital are available, but a global event can trigger a pullout
of funds. Another major hurdlevery fundamentalis LGUdictated land use, which is
a bane for private developers. National policies and structural issues in the
national level ranging from land valuation to bureaucracy and graft are the
biggest enemies in the sustainability of the real sector."
Advocacy
During the March 9 introduction of the Asia Pacific Real Estate Association
(Aprea)Philippine chapter officers at the Event Center of Century City Mall, the
association reiterated its advocacy of increasing the competitiveness of the

country's real estate sector in preparation for Asean integration, or the socalled
Asean Economic Community (AEC).
The March 9 event also introduced Aprea's new chair Jose EB Antonio, CEO of
Century Properties, and other officers: vice chair Jeffrey Lim (SM Development
Corp. president), membership committee head Michael de Guzman (Macquarie
Group of Companies managing director), sustainability group head Rick Santos
(CBRE Philippines chair), regulatory committee head Francisco Lim (partner at
Accra Law), and programs and events committee head Arlene Magtibay
(Robinsons Land senior vice president).
Global popularity
The group said it would take advantage of the Philippines' global popularity as
"one of the world's healthiest emerging markets" to push its 2015 goals and
priorities.
Antonio declared that Aprea Philippines "will work hard to promote to push the
country's development agenda globally, and serve as the platform for bringing
Philippine real estate to a bigger form."
Among other actions, the group will share uptodate industry information and will
conduct research to determine the best cities for real estate businesses. It also
targets the next regional Aprea conference to be held in the country in the next
few years, and promotes itself to young industry players to seek possible joint
venture initiatives.
Antonio said the initiatives of ApreaPhilippine chapter "come at the most
opportune time in the real estate industry as there is so much positive outlook on
the local property landscape." He added that "many economists predict the
Philippines will become the top performing economy in Asean this year,
according to a Colliers Philippines report. The developments are moving out of
Metro Manila and expanding to key provinces with new infrastructure and
enhanced accessibility, industrial parks, offices, retail and housing strong
because of renewed interest in manufacturing, the BPO [business process
outsourcing] boom, increase in employment and consumer spending power.
Destination developments with leisure, entertainment and tourism components
are emerging."
Santos said one of the hurdles the government can help the sector with is to
accelerate the phase of publicprivate partnerships.
He cited the upcoming AsiaPacific Economic Conference (Apec) 2015 as good
incentives for the government to showcase all the positive developments in the
Philippines, including the refurbished airports and the added infrastructure to
decongest traffic. Publicprivate partnerships toward an improved educational
system would also help make sure that as the population grows, children get the
best education, with the curriculum aimed in sectors where it would be easier to
get jobs.
As an example, Santos suggested the training of more students in engineering
subjects, to encourage young minds to pursue software engineering and
development.

Antonio, CEO of the listed real estate company Century Properties Group Inc.,
succeeded Jaime Ysmael, senior vice president of Ayala Land Inc., for the Aprea
chairmanship.
Ayala Land, Century Properties, Megaworld, Robinsons Land, SM Development
Corp. and Vista Land are ApreaPhilippine chapter members.
Residential property sales, inventory dropping
LENGTH: 599 words
Metro Manila's residential property market contracted in 2014 in terms of both
additional inventory and sales takeup. But the current levels were, according to
property consulting firm Colliers Philippines, "more rational" compared to the
exuberance seen in the previous three years.
In a briefing on Thursday, Colliers Philippines director for research and advisory
Julius Guevara said that nearly 40,000 residential units were sold last year, 7
percent lower than the takeup in 2013.
He said the decline might be due largely to a similar reduction in residential unit
launches, which fell by 33 percent to nearly 39,000 units last year.
He said the residential property market was only continuing the "correction" that
started in 2013 after hitting a high of 51,000 residential units taken up in 2012.
"We feel the market has now returned to more rational levels in terms of
homebuying," Guevara said, noting that Metro Manila's primary residential
condominium market would likely be able to sustain an annual residential unit
takeup of 30,000 to 40,000 levels.
Asked to define what Colliers considered a "rational" residential market, Guevara
said this was a market driven by real underlying homeowner demand and not
investors who intend to rent out these units.
The Bangko Sentral ng Pilipinas has been tightly monitoring the real estate
exposure of the banking industry and mapping out new regulations as a
preemptive move against possible property bubbles.
Based on Colliers' latest report, total residential licenses issued by the Housing
and Land Use Regulatory Board declined by 4 percent in 2014, weighed down by
the slowdown in the following segments: socialized housing (15.7 percent);
midincome housing (9 percent) and highrise residential (2.6 percent).
Only the lowcost housing segment expanded in 2014, with licenses issued
increasing by 6.6 percent. Colliers said this was because more local developers
were venturing into the affordable housing segment to meet the still huge supply
backlog.
From 2015 to 2018, Colliers expects a total of 30,935 residential units to be
delivered in the major business districts of Metro Manila, 40 percent of which are
scheduled for completion in 2015. About 75 percent of these units are studio and
onebedroom types with floor areas of 18 to 90 square meters.
"The majority of these units will likely cater to young professionals and investors
who are diversifying their investment portfolios," Colliers' latest research report
said.

"As such, the influx of these smallersized units is expected to create pressure on
rental rates and resale prices," it noted.
The larger three to fivebedroom units, according to the research, would account
for 7 percent of the new supply with unit cuts of between 100 and 500 square
meters.
In Makati central business district, the research noted that overall vacancy rate
declined by 4 basis points to 8.1 percent in the fourth quarter due to the strong
takeup of Grade A and Grade B projects.
Leasing activities, however, remained high in the lower end of the spectrum as
Makati remained a preferred location, with vacancy rate in this segment declining
by 60 basis points, it noted.
In the premium residential market, vacancy rate declined by 17 basis points to
4.4 percent, as there were new projects completed during the period. Colliers
expects vacancy rate in this segment to rise by 260 basis points, as more units
are slated for completion.
For the rental market, the research noted that rental rates in Makati CBD,
Rockwell and Bonifacio Global City (BGC) posted a more stable growth in the
fourth quarter of 2014.
The Asean Economic Community and the Philippine real-estate industry
BYLINE: Amor Maclang
LENGTH: 445 words
IN recent times, there has been much talk about what the future holds for the
Philippine realestate industry.
As we all know, 2015 will be a critical year for the Philippines as it officially opens
its doors to the regional economic integration under the Asean Economic
Community (AEC). The AEC aims to transform the whole Southeast Asian region
into a single market and production base by eliminating the economic borders
between the Association of Southeast Asian Nations membercountries.
The magnitude of this undertaking is immense and remains unprecedented in the
region. While the AEC opens great opportunities for growth and expansion, it
also comes with its own unique set of risks and challenges.
One particular challenge lies in our capacity to accommodate the arrival of
foreign investment and capital. The AEC is expected to usher in an influx of
highly competitive businesses, brands and corporations into the Philippine
market. These commercial entities will be looking to set up shop, and will
therefore be shopping for the appropriate real estate to suit their needs.
The rapid urban development (and redevelopment) of our cities and towns, as
well as the construction of more commercial, industrial and residential
infrastructure will be required to make room for all this new business. The influx
of foreign investors, as well as the expansion of our local firms, will necessitate
the creation of all the additional space.

This massive propertydevelopment project will be a considerable investment for

both government and realestate developers alike. As of now, choosing to fund
these projects poses as a substantial risk as no one knows for certain how things
will play out.
But the Philippine realestate industry has so far responded to these challenges
and risks in a positive way. Several stakeholders and key figures within the
realestate industry have recently come out to voice their support of the coming
integration, claiming that the AEC stands to bring further growth to the domestic
realestate market.
Property developers in the Philippines understand the pivotal role they play in
ensuring the smooth transition of the Philippines into the Asean Economic
Community. The Philippine realestate industry is choosing to seize the
opportunity that lies within the enormous challenge, and is pioneering the way
forward for others to follow.
This is a very positive message to be sending out at this point. The year 2014 is
coming to a swift close, and while we remember our achievements and our
accomplishments, we also remember the things we learned from our failures.
And these are the lessons we take with us as we forge ahead and say hello to
2015.
Most PH property hunters opt to rent
BYLINE: Kristyn Nika M. Lazo
LENGTH: 476 words
SOURCED FROM CURRENT GLOBAL NEWSPAPERS AND JOURNALS
Survey shows 60% cite cost constraints in delaying purchase
Can't afford to buy a home? According to a recent survey by online global
property portal Lamudi, you are not alone.
Sixty percent of the respondents to the survey in Lamudi's report "Real Estate in
the Emerging Markets" prefer to rent rather than buy a residential unit due to cost
constraints, while the remaining 40 percent sought to buy a home for the security
of ownership.
Young market
Lamudi Managing Director Jacqueline van den Ende said the report found that
the majority of the property hunters online are "relatively young," with limited
sources of income.
"Some 60 percent of the property queries are for rent, while the 40 percent are
asking to buy properties," van den Ende said.
"Most of these respondents are relatively young, saving first and trying the
property before buying. They are saving up, until they find a property and at
some stage, they will buy eventually, given the young population," she added.
She also noted that about 90 percent of the world's young population lives in
emerging markets.

"The Philippines is an attractive spot in the real estate market because of the
favorable macroeconomic levels, affordability, and the debt markets are opening
up, which is a positive indication for the foreign investors," van den Ende said.
"In terms of the Philippine economy, we see that 70 percent of the economic
growth in the next few years is attributable to the growth of the country's real
estate," she said, citing the relatively young population and expectations of
higher foreign direct investments, overseas Filipino workers remittances, strong
macroeconomic numbers, improving safety in communities, and increasing
government transparency as positive indicators.
Sector faces some risks
The Lamudi chief said that despite the positive outlook for the sector, it also
presented some challenges\x97a relative oversupply in the high-end segment
and a serious backlog in the affordable housing sector.
Land scarcity in the metro is also a rising concern. Van den Ende said that the
top property developers in the country are competing to develop big scale
projects in Metro Manila, which causes higher prices for increasingly scarce land.
In addition, many foreign investors are beginning to worry about the elections
and change of administration in 2016, as it will likely change the gameplay in the
Philippine economy, she added.
The Lamudi report covered 16 emerging market countries including the
Philippines, Indonesia, Myanmar, Bangladesh, Pakistan, Sri Lanka, Jordan,
Saudi Arabia, Nigeria, Kenya, Tanzania, Morocco, Ghana, Ivory Coast, Mexico
and Colombia.
Lamudi is a real estate portal of the Rocket Internet Group, whose businesses
include exporting Internet solutions from the US to emerging markets.
No stopping real-estate growth
BYLINE: Manny B. Villar
LENGTH: 633 words
WHEN we look at the numerous real-estate projects being implemented nowhorizontal and vertical residential communities, office towers, hotels, shopping
malls, supermarkets and other commercial developments-it's easy to feel
apprehensive that this real-estate boom in the Philippines, which is, so far, the
longest in the property sector's history, has already reached its peak and is about
to go bust.
Even monetary authorities appeared to have the same apprehension. They have
adopted stricter regulations that are apparently aimed at reducing banks' loans to
real-estate companies. Their concern may be justified when it comes to small
segments of the property market.
In general, however, demand for real estate remains robust. I think the concerns
about real estate going bust only come up because people view the
developments from a local perspective. But viewed from the perspective that
takes into account the stage of real-estate development in our regional

neighbors, like Malaysia and Thailand, the Philippines is actually still catching up.
We're still far behind them, and I'm not even talking about Singapore, Hong
Kong, Beijing or Shanghai, which are way ahead of the Philippines.
So, we may be disappointed that we continue to lag behind our neighbors in realestate development, but there's still a lot of room for our real-estate industry to
grow.
Instead of maintaining a narrow, local perspective, we should look at real-estate
development from an Asian perspective, so we can begin to catch up with our
neighbors.
Attaining a level of real-estate development that is on par with our neighbors also
means attaining a comparable degree of economic progress. With a huge
backlog in housing units that continue to outstrip supply, and considering that
housing is a basic necessity for Filipinos, I expect the robust growth in the realestate industry to continue, at least in the foreseeable future.
At this point, the only stumbling block to this robust growth is a dramatic drop in
the Philippines's economic growth, which I consider unlikely. Despite economic
growth slowing down to 5.7 percent in the second quarter of 2014, local and
foreign economists, as well as multilateral institutions, expect the Philippines to
emerge as the fastest-growing economy in Southeast Asia and second only to
China this year.
This is because our economic fundamentals remain strong. Remittances from
overseas Filipino workers (OFWs) and foreign-exchange receipts from the
business-process outsourcing (BPO) industry continue to grow, interest rates and
inflation remain manageable, and the Philippines continues to attract foreign
investors.
The BPO industry, in particular, drives demand for office buildings, while the
increasing number of tourist arrivals encourages the construction of more hotel
rooms. OFWs and BPO employees account for a major share of the residential
market. Also, rising wages in local companies, as well as successful
entrepreneurs, add to the growing middle-class population, which, in turn, boost
demand for housing.
Recent studies by private groups also rank the Philippines as the most favored
destination of foreign investments in Asia. These investments will also boost
demand for office space, as well as for residential units.
This is not to say, however, that the real-estate industry will stay on a straight,
upward line of growth. Based on experience, I see the industry's growth as
following a wave-like pattern. There will be ups and downs within years or
between years, but the general trend will still be upward.
We should also consider that the real-estate industry drives the growth of the
construction industry, which generates a lot of employment and stimulates other
businesses. Together, these activities contribute to economic growth.
AMICUS CURIAE;
Can foreigners own or have interests in Philippine condos?
BYLINE: Krissel E. Alfonso

SECTION: Pg. S1/7

LENGTH: 839 words
Ownership of land in the Philippines is regulated by the 1987 Constitution and
the Public Land Act, among others. The Constitution provides that except in
cases of hereditary succession, only those individuals, corporations and
associations allowed to acquire or hold lands in the public domain can acquire
private lands. In this connection, Commonwealth Act No. 141, otherwise known
as the Public Land Act, expressly limits the acquisition of land in the public
domain to Filipino citizens, or domestic corporations or associations of which at
least 60% of the capital stock is owned by Filipino citizens. Stated otherwise,
foreign individuals or corporations where more than 40% of the capital stock is
owned by foreign individuals cannot own land in the Philippines.
How about ownership by a foreign national of a condominium?
The Securities and Exchange Commission (SEC), in an opinion issued on Feb.
6, 2012, stated that if the real property to be acquired is a condominium unit or
any interest therein, the following rules should be taken into consideration:
If the condominium is set up on leased land, the condominium corporation may
be wholly foreign-owned.
Where the condominium corporation is a Filipino corporation which owns the land
on which the condominium is located, no interest in the condominium may be
transferred to foreign individuals or to corporations more than 40% of the capital
stock of which is owned by foreign nationals.
When the common areas are held by a condominium corporation, the transfer of
condominium units to foreign individuals may be made only up to the point where
it would not cause the foreign interest in such corporation to exceed 40% of its
entire capital stock.
In Jacobus Bernhard Hulst v. PR Builders, Inc., the Supreme Court stated that
foreign individuals are allowed to purchase condominium units and shares in a
condominium corporation in the Philippines up to no more than 40% of the
condominium corporation. The Court explained that "under this setup, the
ownership of the land is legally separated from the unit itself. The land is owned
by a condominium corporation and the unit owner is simply a member in this
condominium corporation. As long as 60% of the members of this condominium
corporation are Filipino, the remaining members can be foreigners."
Considering that it is the condominium corporation which owns the land where
the condominium is situated, and not the foreign national unit owners, the
prohibition against foreign nationals owning land in the Philippines does not
apply. The prohibition not being applicable, foreign individuals are allowed to
acquire condominium units in such instances.
Considering that foreign individuals are allowed to acquire condominium units in
the Philippines, subject to these rules, are they also allowed to be elected as
corporate officers or members of the board of directors of the condominium
corporation managing and operating it?

When the condominium corporation owns the land on which the condominium is
located, the business activity is actually considered as "nationalized," considering
that ownership of land in the Philippines is strictly reserved for Filipino citizens
and domestic corporations or associations of which at least 60% of the capital
stock is owned by Filipino citizens. Hence, the Anti-Dummy Law applies.
This law punishes the evasion of laws on the nationalization of certain rights,
franchises or privileges, like ownership of land. This law does not allow foreign
nationals "to intervene in the management, operation, administration or control
thereof, whether as an officer, employee or laborer therein" in business activities
where there are laws imposing a specific nationality as a requirement for the
exercise and/or enjoyment of certain right, franchise or privilege.
In an opinion issued by the SEC on July 15 last year, the SEC clarified that
although the Anti-Dummy Law bans foreign individuals from being elected or
appointed as corporate officers in entities engaged in nationalized business
activities, it allows foreign individuals to be represented in the board of directors
or the governing body of these entities, provided that foreign representation in
the governing body is in proportion to the foreign shareholdings of the entities.
The rationale for this, according to the SEC, is that the board directors act as a
body. Hence, unlike in the case of individual corporate officers, each member of
the board of directors has no individual power to exercise management functions.
By merely being a member of the board of directors, the foreign individual is not
deemed as intervening in its management, since there are other members of the
board who will decide management matters with this foreign individual. Only
when the management function is exercised in the individual capacity of such a
foreign individual can the intervention be deemed a violation of the Anti-Dummy
Law.
KRISSEL E. ALFONSO is an associate of the Angara Abello Concepcion Regala
& Cruz Law Offices.
Homebound Filipinos prefer houses to condos: Property portal Lamudi
lists top PH locations
BYLINE: CATHERINE TALAVERA
LENGTH: 353 words
SOURCED FROM CURRENT GLOBAL NEWSPAPERS AND JOURNALS
Many US-based Filipinos looking to buy properties in the Philippines would rather
buy houses than condominium units despite the current boom in the condo
market, especially if the houses are located in Quezon City, Makati, Manila,
Tagaytay, and Baguio City.
According to research conducted by online property portal Lamudi Philippines,
more than half of property searches, or 58 percent, conducted on its site by
Filipino-Americans in the first half of the year were for houses, while only 17
percent were for condominiums.

The data was gathered from search behavior of online property hunters from
January to June 2015 and was based on search traffic generated from the United
States where there is a large Filipino population.
Lamudi Philippines managing director Jacqueline van den Ende said the results
showed that US-based Filipinos are still traditional in many respects, which is
possibly due to the Filipino mindset that landed property is a safer form of
investment.
"This, I think, is akin to the Filipino mindset that landed property is a safer and
more viable investment vehicle, as land values rarely stagnate, especially when
its location is highly sought after," Van den Ende said.
The report also found that Quezon City was the most searched location by
Filipino-Americans, accounting for 20.3 percent of the search results, followed by
Makati with 8.5 percent and Manila with 5.3 percent.
Outside of Metro Manila, cities that drew the most searches included Tagaytay
(5.10 percent) and Baguio City (4.91 percent).
Lamudi also noted that US-based Filipinos prefer to buy than rent, with two out of
three property hunters looking for properties to buy while only a third of the
searches were for rental properties.
Van de Ende said the results of its research should be helpful to property
developers when planning their marketing strategy targeted at the FilipinoAmerican market.
She emphasized that Filipino Americans are a "consumer market with formidable
size and potential" because of the large number of migrant Filipinos in the United
States.
Fallout from Phivolcs' alert
LENGTH: 911 words
LAST WEEK, the Philippine Institute of Volcanology and Seismology (Phivolcs)
released the Valley Fault System Atlas on the places in Metro Manila and
adjoining provinces that are built on top of or near an active earthquake fault.
The atlas shows the streets, villages and outline of some structures that may be
directly affected if a strong tremor happens.
On account of the extensive media coverage of the report, the Phivolcs website
was swamped with page views and download requests.
Judging from the phoned-in comments in radio stations and random TV
interviews, the public had mixed reactions over the Phivolcs alert. Many were
thankful for the information and advice given on how to cope with the situation.
There were some though who described Phivolcs' action as alarmist and said it
should have let the local government officials quietly handle the problem with
their constituencies.
A few complained that the alert resulted in monetary losses for them due to the
cancellation of sales or rentals of condominium units and residences in the
vicinity of the fault area.

The owners of some houses near the danger zones expressed hope that their
families would not be seriously affected by an earthquake.
Options
Undoubtedly, the Phivolcs atlas would adversely affect the value of real estate
properties that lie along or are close to the earthquake fault section.
Similar to flood-prone areas, nobody [if he can help it] would like to live in a place
where his life and properties are at a greater risk of sinking if the earth under him
moves.
Mother Nature seems to have dealt an even hand on this problem because the
geological aberration cuts across all economic classes of our society.
The potential victims of the feared calamity are residents of posh gated
communities in the cities of Quezon and Pasig, middle class subdivisions in Rizal
province and depressed areas in Taguig City.
Ahead of the anticipated Big One, the financially-able among the affected
residents may likely opt to sell their houses [assuming there are interested
buyers] and relocate to safer ground, or reinforce their house structures to
withstand a strong earthquake and pray that God would be merciful to them.
On the part of real estate developers and brokers, they would have to be more
creative in convincing potential buyers that the benefits of buying the houses and
condominium units in the red-lined areas outweigh the attendant risks.
The pre-selling of residential condominium buildings and townhouses in those
places may require offering liberal payment terms because buyers of these
properties are usually first-time homeowners and therefore more careful in this
major acquisition.
Agreement
The Phivolcs alert is providential for people who may be planning to buy or rent
real estate properties in the affected areas.
Given the risks involved, they would have to weigh things carefully-go ahead or
drop the whole idea?
In this regard, it is comforting that, on account of the construction boom in the
country today, there is no dearth in condominium buildings or residential
subdivisions far from the earthquake fault that are available for rent or purchase.
But what if a deed of sale or lease had been signed, or installment rental or
payment already made, over a property within the danger zone before the
Phivolcs atlas became public?
Under normal circumstances, there is no pulling out of a contract that has been
signed by the parties and notarized. More so if payment had been made because
the contract was already consummated.
Unless the owner or lessor of the property is agreeable to canceling the sale or
lease, the buyer or lessee is stuck with it.
Going to court to compel the termination of the contract would be advisable only
if there is proof the owner or lessor knew about the defect of the property and
concealed it, or the buyer or lessee would not have bought or leased the property
had he known the defect earlier.

In these instances, the warranty against hidden defects that the law imposes on
sellers or lessors of real property is deemed violated so there is justifiable ground
to demand the rescission of the contract.
Penalty
The situation is less sticky if contracts to sell or lease govern the relationship of
the parties.
It is standard practice in these contracts to provide for the contingency that the
buyer or lessee may, for one reason or another, decide not to proceed with the
purchase or lease of the property.
The prospective buyer or lessee who is spooked by the idea of living in a place
susceptible to grave danger in the event of an earthquake can opt to cancel the
contract.
The usual trade-off for this action is the payment of a break-up penalty which
may be in the nature of a pre-agreed amount or forfeiture of a percentage of the
amounts already paid.
Or if the owner or lessor happens to have other properties outside the danger
zone that meet the buyer's or lessee's requirements, the transaction can be
carried over to those properties to keep the deal alive.
Some tough decisions have to be made by the people whose houses or
businesses are threatened by the fault lines identified in the Phivolcs atlas. And
they have to be done fast because there is no telling when nature may decide to
rearrange its geologic plates.
Although scary, the Phivolcs alert should be looked at as a wake-up call for all of
us to prepare for the anticipated but unwelcome happening of the Big One. For
comments, please send your e-mail to rpalabrica@inquirer.com.ph
16th Congress
Senate Bill No. 676
PHILIPPINE CONSTRUCTION INDUSTRY COMPETITIVENESS ACT OF 2013
AN ACT STRENGTHENING THE CONSTRUCTION INDUSTRY, CREATING THE PHILIPPINE
CONSTRUCTION INDUSTRY DEVELOPMENT AUTHORITY AND FOR OTHER PURPOSES