Updated: Apr 18
Philippines An Investment Primer
The Philippines (PH)
is among the fastest growing economy among global emerging markets. With consistent annual growth rate of 6 to 7%
since 2012, it is one of the top 20 best performing economies in the world.
PH PROPERTY GROWTH DRIVERS
With an estimated 2.3 million Overseas Filipino Workers (OFW), remittances have been a significant driver of demand for real estate properties as families seek owned and investment properties. Remitted revenues are expected to continue growing by at least 3% a year. Overseas workers remitted $32.21 billion in 2018, 11.8% of which went directly.
Business Process Outsourcing (BPO).
The Philippines continues to be the largest location for delivery of contact services in the rest of the world, accounting for 15% of the global BPO market. This is due to the country's high English proficiency, strong affinity with Western culture, and 96.9% literacy rate.
Philippine Offshore Gaming Operators (POGO)
Offshore gaming has become a surprise growth industry and as of 2018 accounts for 26% of total office demand. The influx in the numbers of working immigrants has also led to a huge increase in demand for residential properties, particularly in the areas of the Bay City and Makati.
The industry brings in 10% of the country's GDP. More aggressive promotional campaign from the Department of Tourism has led to accelerated growth in arrivals with an annual growth of 11% from 2012 onwards. Tourist arrival has hit an all time high of 7.1M in 2018 and expected to hit 10M by 2020 which will further drive demand for hotel, resort, residential, and commercial facilities.
The Philippine government is investing $158 billion to modernize the country's infrastructure through 75 flagship projects that are expected to accelerate economic growth and create 1.8 million jobs by 2022. The aim is to push the country into upper middle-income status by 2022.
Investing in Property.
In the Philippines, foreigners are allowed to own freehold properties up to 40% of a condominium development. This presents a remarkable opportunity as Metro Manila offers some of the fastest-appreciating properties in Asia, along with some of the highest rental yields, lowest vacancy rates, and among the most affordable in the region. Hence, Metro Manila properties remain among the most affordable in the region.
MAKATI CITY | THE BUSINESS CAPITAL
Makati City is beating financial heart of the Philippines, a city that can go toe-to-toe with the likes of Manhattan, Hongkong, and Singapore. It has the highest concentration of corporate headquarters, both local and multinational, as well as the head offices for most of the top Philippines banks. It hosts a residential population of 583,000 from over 154,000 households, while its weekday population swell to staggering 3.7 million due to the large influx of both office and residential spaces here are some of the most valuable in the country.
Makati has several commercial centers which offers a wide array of local and global brand shops. It is home to major mall and shopping complexes, making it popular among locals and tourists in need of cosmopolitan shopping experience.
Apart from the city being a shopping destination housing the world's most sought-after brands, it also offers a variety of local and international dining choices-from authentic specialty restaurants to fine dining establishments and even affordable fast food choices.
Makati is also home to museums showcasing Philippine culture such as the stylishly modern Ayala Museum and the three-story Yuchengco Museum.
Being an international city makes Makati an especially desirable address for foreigners who want a residence that will make them feel right at home. Tourists looking or alternatives to hotel living have become avid condominium dwellers thanks to new hosting technologies such as AirBnB. This has made residential condominiums in Makati even more attractive as investments due to the easier access to rental incomes.
With no new land supplies available, growth in available residential areas has, by necessity, been vertical in nature. New developments, however, barely meet the ever-growing demand for residential space, with condominium stocks projected to grow by just 14.9% across the central business district through 2021. With much of Metro Manila's commerce and lifestyle events happening in this city, Makati remains an aspirational residential address for many of its workers.
In 2018 alone, Makati CBD condominium prices have risen at a rate of 26% year-on-year. While demand has traditionally been fueled by investments from overseas Filipino workers, foreign buyers have also been taking up units in the area due to fresh demand by workers in newly established offshore gaming operations. Demand for condominiums in the city remain high, with about 95% of floated inventory having been sold.
Because of Makati's limited land allotment, the city also boasts of a very strong secondary property market, ensuring that investors will always have potential buyers at hand.
SMDC PROPERTIES IN MAKATI
SMDC has an extensive land bank at the South Makati Gateway, an area that is known for being a hub for technology startups, passion-driven business enterprises and BPOs. It is expected to become the next growth zone, and SMDC is well-positioned to take advantage of the developments in this area.
INVESTING IN MAKATI CITY
Makati City has always been seen as the most premium and prestigious address in the Philippines, owing to accessibility, its integrated urban lifestyle, and its concentration of convenient amenities. Makati real estate remains one of the most viable investment choices available, with capital values continuing to appreciate due to a confluence of factors, including continued business growth, growth in demand from new business sectors, and continued inflow of investment funds from overseas worker remittances.
With SMDC's residential offerings, having a Makati address has become more attainable even to middle-class residents and investors through its competitive pricing and easy financing terms.