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Key drivers of Philippine real estate growth
WITH a growing economy and positive demographic trends, the Philippines has proven to be an encouraging place for Singapore real estate investments.
Among the factors spurring this growth are the second-largest population in South-east Asia, as well as excellent infrastructure for an expanding services and business process outsourcing sector.
"The demand for office space because of the continuous growth of the Information Technology-Business Process Outsourcing industry has also revved up the construction projects, specifically integrated mixed-use developments," said Philippine Trade & Investment Centre-Singapore Commercial Counsellor Glenn Penaranda.
Other sectors seeing good growth are manufacturing, construction and tourism and these are key growth drivers of the Philippine real estate industry.
Among positive factors for Singapore investors are the strong local currency as well as low interest rates in the Philippines. Positive feedback from investors also helps reinforce the good performance of the industry as more foreign companies choose to invest in the Philippines, especially those looking for tech support and call-centre staff.
Mr Penaranda also noted that the continuous inflow of foreign exchange from overseas Filipinos helps boost investments in housing, renovations and condominiums.
In 2016, US$29 billion was remitted from overseas, and of this, US$1.7 billion came from Singapore.
Record remittances also help finance consumer spending, which in turn drives the boom in the retail sector, with demand for retail space in malls continuing to be high. This has led to developers pursuing new projects.
Investment in infrastructure and industrial real estate could be another area of development.
The Philippines is encouraging Singapore's involvement in developing Philippine infrastructure and logistics projects that will improve movement of people and goods, and linkages with regional markets.
Major Philippine projects include road networks, railways, seaport systems and airport systems.
The new Philippine administration is raising infrastructure spending to improve and modernise these facilities as well as revitalising the PPP model for investment in these types of projects.
Opportunities abound, and for Singaporean investors looking for expansion opportunities outside the congested Metro Manila region, Clark Green City (CGC) in Central Luzon is a new investment destination, located 80 km north of Manila.
The city is adjacent to an international airport (Clark International Airport) and seaport (Subic Bay Seaport), which are linked by the Subic-Clark-Tarlac Expressway. The existing good transport and logistics infrastructure enable convenient import and export transactions and it is well-sheltered from typhoons, with the Sierra Madre mountain range to the west and the Zambales mountain range to the east.
CGC is being developed by the Bases Conversion and Development Authority (BCDA) as the Philippines' first green and intelligent global metropolis. Being in a special economic zone, it has tax benefits which will be favourable to 100 per cent foreign-owned companies. To attract more investors, BCDA will also grant fiscal and non-fiscal incentives.