On The Right Road

A booming economy, growing middle class and a raft of infrastructure measures and tax reforms implemented by the government are all contributing to the rude health of the property sector in the Philippines

- Al Gerard De La Cruz

With A Gross Rental Yield Of Better Than 6 Percent, The Philippines Outperforms Cities In China And Almost Anywhere Else In Asia Except Indonesia

Donald Trump was on typically succinct form on a recent visit to the Philippines when he called the country a “most prime piece of real estate.” The US president was referring to the nation’s strategic importance as a military ally in Southeast Asia. However, he could just as easily have been talking about the property sector in the archipelago – which is benefitting from lavish infrastructure spending, stable growth and interest from foreign investors.

The market is also encountering a different kind of cycle at home: one more contingent on the owner-occupier instead of the casual investor, with analysts stating that the current property boom is based on real demand rather than the vagaries of speculation.

Any talk of residential real estate in the Philippines requires mention of impressive recent economic stats. In 2017, the country posted a full-year GDP growth of 6.7 percent, among the fastest rates in Southeast Asia. Consumer spending, which represents 70 percent of economic activity, is experiencing record year-on-year growth of 6.1 percent.

“The Philippines continues to be one of APAC’s leaders in economic growth, backed by robust consumer spending from the young demographic,” says Sigrid Zialcita, managing director for research at Cushman & Wakefield Asia-Pacific.

"Moreover, the current administration is boosting government spending, stressing the importance of infrastructure spending,” she adds, referring to President Rodrigo Duterte’s programme – known as his Build, Build, Build policy – which is jacking up infrastructure outlay to PHP8.44 trillion (USD168 billion).