Boracay, The Philippines Photo: Jefftollefson1968
The Philippines’ economy is forecast to continue growing in 2017, albeit at a slightly slower rate.
The Asian Development Bank (ADB) predicts that the nation’s economy will grow 6.4 per cent in 2017, down from 6.9 per cent growth in 2016. Indeed, last year was an exceptionally strong year for the Philippines, with election-related spending helping to boost private consumption. As a result, the ratio of fixed investment to GDP hit 23.8 per cent, a 10-year high, according to the Asian Development Outlook 2017 Report.
That economic growth helped to put the emerging market on the radar of international property investors. Indeed, it is only recently that the country changed its restrictions for foreign buyers to open up the market to foreign capital. While foreigners still do not have the right to own land in the Philippines, investors can own houses and buildings, as long as they do not own the land on which the property is built. Land can also be leased on a long-term basis.
The bank predicts that domestic economic output will recover in 2018 to 6.6 per cent, as the government steps up infrastructure spending. Headwinds facing the country include rising global oil prices and the USA’s interest rate hikes.
“Strong economic growth in 2016 is expected to carry on in 2017 and 2018, thanks to continuous acceleration of investment and consumption,” ADB principal country specialist Joven Balbosa told the press.
He added that the outlook for 2017 and 2018 are both “very upbeat”, noting that the country aims to bring down the poverty rate from 21.6 per cent in 2015 to 14 per cent by 2022, and that the nation must complete the infrastructure projects currently in its pipeline in order to sustain economic growth.
Overseas interest in Philippines on the up
7th March 2016
Overseas interest in the Philippines is increasing, new research from TheMoveChannel.com reveals. The property portal has seen demand for real estate in the Philippines climb in recent months, as experts hail the country as an emerging investment hotspot.
The Philippines was the 13th most popular destination on TheMoveChannel.com in January 2016 for the second month in a row, up from 22nd in November 2015.
“The Philippines have gone from strength to strength in the last year, as development has continued and commercial property in Metro Manila has been boosted by the country’s economic boom,” comments TheMoveChannel.com Director Dan Johnson. “All that spells promising news for international investors, particularly at a time when other economies, such as China, are showing signs of uncertainty. With a growing number of investors from Asia and the Middle East using TheMoveChannel.com, we are not surprised to see demand steadily building.”
Indeed, the nation’s GDP grew 6 per cent in the third quarter of 2015 year-on-year, improving upon a 5.8 per cent growth in the previous quarter. At the start of 2016, BPE Asia Real Estate, a Hong Kong-based alternative investment adviser, notably chose to invest in the Philippines over China.
“We have confidence in the Philippines. The country is changing dramatically and the middle class is growing rapidly,” Mark Fogle, managing director and head of real estate, told the SCMP.
Property portal Lamudi, which specialises in emerging markets, has found that a dramatic increase in Internet penetration has had a “profound effect” on local businesses in the Philippines, including those in the real estate industry. A recent survey of brokers in the country revealed that 91 per cent of all professionals observed a significant increase in online enquiries. In addition, 59 per cent of those surveyed cited online listings platforms as their channel of choice to advertise properties.
Foreigners still do not have the right to own land in the Philippines, but foreign investors can own houses and buildings, as long as they do not own the land on which the property is built, while land can be leased by a foreigner or foreign institution on a long-term basis.
Lamud highlights Boracay as a hotspot for investment in the coming year. Arguably the Philippines most famous beach destination, the island will welcome a new airport in 2016, while major property developments are also launching.
“Boracay has become increasingly popular among both residential and commercial buyers,” explains the portal. “Yet Boracay’s property market is far from reaching its peak, with the continued development of the island meaning real estate values remain relatively low. As development accelerates, property values are expected to see high growth in the coming years.”Google+