Wondering how the famous BORACAY looks like 25 years ago?
Go to Barangay Sto. Nino, Municipality of San Vicente, Province of Palawan.
The next frontier of Philippine Beach Resort development.
Just two hours away from Puerto Princesa City. Now being discovered by backpacking tourist.
FANTASTIC view. I am truly proud to be a Filipino.

Asiatown IT Park is home to the Business Process Outsourcing in the Cebu.
The BPO Industry transformed the Cebu Skyline.
Cebu is now very cosmopolitan.

CEBU is BOOMING - CEBOOM!
Observe how the Cebu Skyline is changing and becoming modern.
Cebu Business Park

PH is ‘Asia’s rising star’!

Written by JIMMY CALAPATI/ April 25, 2013/ http://www.malaya.com.ph/index.php/business/business-news/29552-ph-is-asias-rising-star
One of the world’s fastest growing economies.
That is how Moody’s Analytics, a division of Moody’s Corp. engaged in economics research and analysis, describes the Philippines in its new report that, among others, forecasts sustained growth for country over the next three years.
Nevertheless, the report also said  “more needs to be done,” particularly in public investments and infrastructure.
“The Philippines’ economy grew at potential in 2012 and is set for a strong 2013.  We expect GDP growth to remain in the 6.5 percent to 7 percent range in 2013 and 2014, making the Philippines one of the world’s fastest-growing economies,” Glenn Levine, senior economist at Moody’s Analytics, said in the latest report titled “Philippines Outlook: Asia’s Rising Star”.
The forecast is at the higher end of the Philippine government’s target of between 6 and 7 percent for this year.
It also sits well with the 2014 target of between 7 and 8 percent.
Last year, GDP grew by 6.6 percent, almost twice bigger than 2011’s 3.9 percent but slightly lower than 2010’s 7.3 percent, a 30-year high.
Levine cited the current rate of GDP growth is sustainable as all major sectors of the economy are growing strongly and that inflation is low.
Levine even added that “reform and favorable policy could lift potential GDP growth to 8 percent in the coming years.”
The Philippines has been among the brightest parts of a generally gloomy global picture. Even with China’s economy slowing, the US struggling to gain traction, and Europe stuck in a long-running crisis, the Philippines economy has continued to drive forward, registering 6.6 percent GDP growth in 2012. 
The stock market has surged 23 percent this year after a 33 percent rise in 2012. “Investors are bullish on the Philippines, and so are we,” Levine said, adding that the country’s “impressive rate of GDP growth looks sustainable, as risks are low and most sectors of the economy are growing solidly.”

Growth

Levine said the growth this year will be led by construction and business process outsourcing, which account for a sizable chunk of the Philippines’ exports as less competitive industries such as electronics have receded. 
On the demand side, Levine said government spending was strong in 2012, although this accounted for less than 10 percent of GDP and that all of the other demand components recorded robust growth.
Levine also noted that strong growth has taken place in an environment of falling domestic risk and low inflation.  Inflation has stabilized near 3 percent per year, comfortably at the lower end of the Bangko Sentral’s targeted 3 percent to 5 percent range, allowing the overnight interest rate to be cut to 3.5 percent. 
“This all suggests that the current rate of growth is sustainable,” Levine said.
But the main reason for the growth, according to Levine, is good governance.
“The Philippines’ recent performance against a weak global backdrop shows that good governance is far and away the most important driver of growth in emerging markets, the Moody’s economist said.
“For years, the Philippines was Asia’s perennial underachiever, posting annual GDP growth around 2 percent to 3 percent while the rest of the region surged ahead. But that has changed in recent years, particularly with the government of President Benigno Aquino, who continued the good work of his predecessor, Gloria Arroyo, but went much further in several important respects,” he added.
Levin further noted that the government’s 2011-2016 development plan provides a five-year blueprint for growth and development, providing transparency, predictability and accountability. 

Corruption 

“The crackdown on corruption and encouragement of local and foreign investment, in particular, have worked well. A commitment to infrastructure spending is beginning to pay dividends, albeit from a low base. Across the country, from rail and public transport projects in major cities to paved roads in distant parts of the archipelago, most Filipinos are seeing a palpable improvement in physical infrastructure,” he said. 
Levine said that the Aquino government’s main achievement has been lowering some of the country’s key risks. 
“Fiscal risk remains contained: The deficit equaled 1.8 percent of GDP in 2012, and the government aims to hold it near 2 percent in future. This will lower the debt-to-GDP ratio, which stands at 42 percent.  Other barometers of macroeconomic risk are also improving. The external account is stable. The current account is in surplus, and most of the country’s debt is denominated in pesos. External debt amounts to less than 35 percent of GDP,” Levine said.
Levine stressed, however, that more needs to be done, citing needed improvements in public investments and infrastructure.
“The difficulty of moving physical goods around the country precludes the growth of manufacturing. Public investment accounts for just 2.75 percent of GDP, far too low for a country at this stage of development,” Levine said.
Also, he said that rising domestic debt and emerging asset bubbles are a mild concern. 
“Quantitative easing in the US, Japan and elsewhere has caused some inflow of funds, complicating domestic monetary policymaking by putting upward pressure on the exchange rate. This, in turn, forces the central bank to either act to keep interest rates low or intervene directly in the currency market. But both strategies are limited, however, and tend to increase domestic liquidity; the Philippines is experiencing this,” Levine said. 
He added that although lending growth has accelerated and domestic money supply is rising at a double-digit pace which means some is fuelling productive activity, but a lot is flowing into asset markets, as suggested by the stability of consumer prices.

Market bubble 

“A stock market bubble would affect relatively few, but the Philippines’ real estate market is a concern, since housing investment is more widespread,” Levine noted.
He said that the scant available data on the Philippines’ real estate, alongside anecdotal evidence, suggest that prices and construction may be rising ahead of fundamentals which “bears watching.”
Still, Levine said that the biggest risk for Philippine investment is operational, stressing that the government’s regulations and taxes are “complicated and changeable.”
This caused the Philippines to rank 138th in the World Bank’s Ease of Doing Business Index, alongside Sierra Leone and below India. 
“If the government wants to attract more foreign investment, it must ease its restrictions on foreign ownership and streamline the rules for starting businesses, paying taxes, and dealing with workers,” Levine noted.
Levine even cited that policymaking would become slightly easier if the numbers on the upcoming elections will favor the Aquino Administration.

8% growth?

Is an 8 percent GDP growth achievable for the Philippines? Levine said the Philippines has the potential and much of it depends on the Aquino administration.
“Technocratic and disciplined governance, with transparent targets and ambitious but achievable long-term goals, coupled with President Aquino’s popularity has set the economy on the right course,” Levine said.
He said that some low-hanging policy fruit has already been picked, but if development and reform continue near their current pace, the Philippines’ potential rate of growth will rise towards 8 percent by 2016. 
But Levine said this is far from assured.
“Much will depend on how smoothly the transition goes when President Aquino steps down in 2016,” he said.
He also cited the country’s demographics could help in achieving higher growth rates in the future.
“More than a third of the Philippines’ population is less than 14 years old, promising a growing workforce in coming years,” Levine said.
He also cited that among the factors that could help propel the country in the future is having an investment grade status.
In what was considered as a surprise move, Fitch Ratings upgraded late last month the Philippine sovereign credit rating to investment grade despite a stable ratings outlook in the first quarter of this year.

Upgraded

Fitch upgraded the Philippines’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BBB-’ from ‘BB+’. The Long-Term Local-Currency IDR has been upgraded to ‘BBB’ from ‘BBB-’.
Moody’s Investors Service, parent company of Moody’s Analytics, rates the country one notch below investment grade.
Earlier, Moody’s said that that it expects sovereign credit fundamentals in the Philippines and the rest of the Asia-Pacific region to remain resilient to both global headwinds during 2013.
Last year, despite the global financial crisis in 2008 and subsequent downturn in advanced country economic performance, four sovereigns in Asia-Pacific were upgraded by Moody’s —Korea, Indonesia and the Philippines—while Vietnam and Pakistan were downgraded by one notch each.
The Philippines’ rating was upgraded by Moody’s to Ba1 from Ba2 in October 2012, a notch lower from investment grade level, in recognition of improved economic performance and strengthening prospects over the medium-term.
The rating action also recognizes positive developments related to institutional quality and fiscal management, as well as financial system and political stability. The outlook is stable.
In its annual credit report on the Philippines, Moody’s said that recent rating actions on the Philippines have been driven by robust growth, more favorable economic prospects over the medium-term, and the continued improvement of fiscal performance.

Investment lure of Central Luzon cited

http://www.malaya.com.ph/index.php/special-features/property/29529-investment-lure-of-central-luzon-cited
The North Luzon Urban Beltway is the next investment destination of the country due to its infrastructure developments, pushing manufacturing to Clark Freeport Zone (CFZ) and Subic Bay Freeport Zone (SBPZ)  and business process outsourcing in Metro Clark.
According to the CBRE Central Luzon Urban report released yesterday, the development of infrastructure has fuelled the strengthening of Central Luzon’s economic fundamentals.
The property consultancy firm sees renewed demand for manufacturing, BPO and residential sites in Central Luzon as the economy of the region continues to grow.
The presence of the North Luzon expressway, the Subic-Clark-Tarlac expressway, the Clark International airport has driven investors to pour multiple high value investments in Clark and Subic—the likes of Texas Instruments and Hanjin.
“The Northern Luzon Urban Beltway is transforming its landscape into a high potential investment destination. This is largely brought about by infrastructure developments that paved way to increased economic activity in Central Luzon as businesses started expanding from Metro Manila to its peripheries,” CBRE said.
The continuous infrastructure developments such as airport, seaport and highways between the Clark and Subic has opened up new areas of investment for the manufacturing industry as these foreign firms realize the country’s high investment potential.
The report said Japanese and Taiwanese firms lead the upturm in the manufacturing industry at both zones.
Clark Development Corp. (CDC) recorded 50 of the 207 contracts signed in 2012 to be industrial developments.
Expansion of Japan’s Yokohama Tires will be completed by 2017 while Ingasco Inc. also of Japan is set to develop a $40 million air separation plant which aims to support the immediate demand of manufacturing firms in CFZ. Another Japanese company aircraft parts manufacturer, Jamco, is set to invest P172 million for a facility to produce commercial aircraft interior components and subassembly parts.
Robinsons Land Corp. will infuse $300 million for a new branch of Go-Hotels chain in Clark while Megaworld Corp. is reported to have made a deal with Clark Development Corp. to develop 550 hectares of the former US military property into a mixed use complex. SM Prime Holdings is also adding 89,000 square meters of floor area to its SM Clark Mall.
Subic Bay Freeport Zone is gaining recognition for its leisure tourism developments especially with its beaches and other destinations like Treetop Adventure, Zoobic Safari, and Ocean Adventure.
Tourist arrivals grew from 593,000 in 2010 to 1.7 million in 2011 which spurred retail activity. Last year, Ayala opened its mall
Harbor Point inside SBFZ while a new SM opened in Olongapo City.
According to the report, the entry of new firms and the expansion of current locators increased occupancy in warehouses.
Leasable industrial spaces trimmed down to 6.81 percent vacancy rate in SPZ and 7 percent in the SBFZ.
Pioneer developers in CFZ sublease at an average of PP123 per square meter per month  for combined warehouse and land lease packages. Lease rates inside Subic’s industrial parks range from P95 to P240 psqm/month.
In the office space, CBRE said the implementation of PEZA (Philippine Economic Zone Authority)  Board Resolution No. 12-329 has restricted fiscal tax incentives for new developers in Metro Manila and Metro Cebu but has  puts Metro Clark in a sweet spot for office developers as it is the only established IT-BPO hub in the country still enjoying tax incentives for new IT Parks and facilities developers.
Off-shoring and outsourcing continue to drive the demand for office spaces in the Clark Freeport Zone.
As of December 2012, Clark registered a low vacancy rate of 6.54 percent out of the total supply of 126,589 square meters leasable office space.
Demand is expected to increase with the recent mergers and acquisitions of top BPO locators in Clark.
In 2012, iQor, a New York City-based data analytics and outsourcing solutions firm, acquired one of the pioneer BPO firms in Clark, Cyber City Teleservices.
NCO Group Inc. has merged with APAC Customer Services Inc. under the umbrella corporation Expert Global Solutions (EGS).
“The PEZA resolution has emphasized Metro Clark as a high potential investment destination. The large talent pool combined with developments in infrastructure of the region has helped in sustaining the BPO growth.
With the entrance of new locators and expansion of previous tenants in the BPO industry, the real estate office segment is seen to expand in the coming years,” CBRE said.
CBRE said an increase in expatriates and on-site working for the different locators raised the demand for quality residential developments, placing the pressure on developers to increase supply.
A total of 11 new direct leases were contracted by CDC on the same year, including the expansion of Yokohama Tires Philippines.
Central Luzon region recorded 16,000 foreign citizen households in 2010, ranking third in the country, next to the National Capital Region and the Autonomous Region of Muslim Mindanao.
As of 2011, the average occupancy in these residential developments is estimated at 90 percent. These residential developments most often in the form of subdivisions with a configuration of 50 to 400 square meters in size, with lease rates ranging from P26,000 to P70,000 per month.
CBRE said developers have started launching new residential projects inside the CFZ and its fringes. To date, four horizontal subdivisions and two condominium projects are adding up to the supply of residential dwellings in CFZ with about 1,076 units.
These projects mainly cater to expatriates working inside the CFZ. One of these projects, for instance, is exclusively marketed to Korean nationals.
Outside the CFZ, national players are also trying to get a hold of the growing residential market driven by OFW remittances and flexible bank lending terms. In 2012, Ayala launched the second tower of their Marquee Place Residences in Angeles City, adding another 155 units in the market. Other players competing in the area are Robinsons Homes, Vista Land, Filinvest, Pro Friends, Fil-Estate and Moldex Realty.
CBRE said residential demand is seen to grow with the upcoming investments and expansion in the CFZ.
Vertical residential developments are now seen rising in the area as developers try to maximize their investment on land.

Latest PH ‘report card’ seen to boost real estate

By Tessa R. Salazar/Philippine Daily Inquirer/April 19, 2013/ http://business.inquirer.net/117633/latest-ph-report-card-seen-to-boost-real-estate

How important to the local property industry are “report cards” from foreign investors? Apparently, they can spell the difference between progress and stagnation.
Inquirer Property previously reported that in 2011 the local property industry received sobering news that Manila had been ranked “below fair” to “abysmal” by foreign property investors (as reported in the “Emerging Trends in Real Estate Asia Pacific 2011” survey conducted by the Urban Land Institute). However, the following year the “ULI Emerging Trends 2012 Asia Pacific” upgraded Manila’s rank to 18th in investments (from 20th in 2011), prompting a noticeable uptrend in property investments, particularly in emerging urban districts (EUDs) and central business districts (CBDs).
Now, another report card from foreign investors could give the local office, manufacturing, residential and retail sectors a big boost.
CB Richard Ellis’ newly released special report showed the recent investment grade and its implications on the real estate industry.
Expected to gain
The second quarter 2013 report said the Philippines finally achieved its first investment grade rating from one of the world’s major rating agencies. It stressed that the real estate sector is expected to gain from this recent development.
It stated that with the Fitch Ratings announcement upgrading the country’s sovereign credit rating to BBB- from BB+, the country is now on the global radar for investments, and has legitimately become an investment “hotspot.” Also cited were two other major international credit rating firms—Standard and Poor’s (S&P) and Moody’s—which the report said “still rate the country one notch below investment grade but are expected by analysts to soon follow suit.”
The report listed the sectors standing to benefit from these ratings: the office, manufacturing, residential and retail sectors.
The CBRE report said: “Foreign investors will logically move or expand to regions that are being upgraded. This increased interest in the country will boost the demand for office and manufacturing spaces. Foreign Direct Investment (FDI) inflows, which grew by 15.5 percent in 2012, the third highest in Southeast Asia, are expected to continuously increase following the recent credit rating upgrade. The entry of more FDIs will continue to fuel the resurgent manufacturing sector.”
Growth in Clark, Subic
The Clark and Subic Freeport Zones, which the report listed under the manufacturing sector, have been “accommodating a number of Japanese and Taiwanese manufacturing firms and offer 13.4 million square meters of leasable industrial space.”
The office sector “looks to be in great shape in the coming years because the Information Technology and Business Process Outsourcing (BPO) industry boom won’t abate anytime soon,” the report said.
It continued: “The industry, which generated $13.4 billion in revenue and has 720,000 employees, surpassed its 2012 target according to the Business Process Association of the Philippines. Due to the current political turmoil in East Asia and the financial struggles in the Western world, US and European companies are more focused than ever on expanding or relocating to emerging economies.”
Joey Radovan, vice chair of CBRE global corporate services, projected that BPOs will occupy 80 to 90 percent of office space supply in 2013. More multinational corporations will set up BPOs in the country in order to fulfill cost reduction strategies, while current locators are preparing to expand local operations to further reduce costs.
Also discussed in the report were the residential and retail sectors. It said: “In the long run, a domino effect will carry the benefits of an investment influx toward the residential and retail sectors.
The report said: “As foreign businesses enter the country, expatriates will look for practical accommodations such as upscale and luxury residences near business centers. It would most likely raise the demand for residential condominiums in CBDs. Consequently, the jobs created by FDIs will elevate the spending power of the middle class, which in turn could lead to an increased ability to purchase houses or condominiums. Demand for affordable to mid-range residential segments will continue to pick up—and given the platform of low inflation and mortgage rates—a democratized housing industry will soon emerge.”