Duterte’s ME visit buoys confidence in local property market
During his recent visit to the Middle East, President Rodrigo Duterte ostensibly inspired Filipino communities in Saudi Arabia, Bahrain, Quatar to help him build a more economically vibrant Philippines.
Over US$ 500 billion worth of combined investment capital from industrialists and businessmen from Riyadh, Manama and Doha were reportedly tapped for investment and jobs for Filipinos back home.
But the most understated achievement of the President’s week-long swing through the oil-rich states of the United Arab Emirates (UAE) was his enthusiastic cheerleading to whip up the existing optimism held by expatriate Filipinos for the property sector in their home country .
A poll conducted by New Perspective Media (NPM) showed that 98 per cent of Filipinos in the UAE believe positive change is coming to the Philippines with 93 per cent agreeing that the investment environment is already improving.
According to official government figures, the Philippines was the second-fastest growing economy globally in the second quarter of this year, expanding at 7 per cent compared with the same period last year, followed by China (6.7 per cent), Vietnam (5.6 per cent), Indonesia (5.2 per cent), Malaysia (4 per cent) and Thailand (3.5 per cent). India registered the highest growth at 7.1 per cent in the second quarter.
Now is the time to invest
The survey of 1,000 UAE-based Filipinos showed that 90 per cent believe "now" is the best time to invest in Philippine property, with expatriates "very optimistic" the value of their property investment will see significant gains over the next few years.
Asked to describe the investment and business environment in the Philippines following the election of Robert Duterte as the president in June, 93 per cent said the situation is improving, 2 per cent said it is deteriorating; and 5 per cent said they do not see any change.
"A vast majority of the Filipinos in the UAE are confident in the improving investment scenario in the Philippines," said Karen Remo, the managing director of NPM. "This is an affirmative boost to the new administration of the Philippines as the economy’s growth registers stellar performance in recent months."
"Our survey supports the increasing appetite of the Filipinos and the international community to invest in real estate. This is in response to the positive forecasts of good investment returns in the Philippines, which is now being considered the Asia’s rising tiger," Remo said.
The strong economic growth in the Philippines is driving demand in the property market. According to Oxford Business Group, the construction and real estate sectors make up around 20 per cent of the Philippine economy, slightly ahead of manufacturing.
"The economic agenda for the country prioritises countryside development, infrastructure and agriculture growth, and increased government spending," said Michael McCullough, the co-founder and managing director of KMC Savills. "Pair this with the administration’s goal of positioning the Philippines as one of the top three destinations in South East Asia for FDI inflows by 2022, and we see a very positive outlook for the real estate industry."
The Philippine property market is driven by rapid urbanisation, increasing employment by the BPO (business process outsourcing) sector, disposable income, surging OFW (overseas Filipino workers) remittances and growing real estate investment. And the increase in personal disposable income of consumers as well as growth in commercial and residential projects have created rising demand for property.