GENERAL PROPERTY
Real estate transactions are being closely monitored by the government by tightening anti-money laundering rules. This is due to the Philippines being placed by the Financial Action Task Force (FATF) on the “gray list” last June.
Real estate brokers and developers are told to watch out for transactions “where there is certainty or a sign that parties seem to be hiding the identity of the real customer buying the property.” An instance would be having a change of ownership to the property even though it has not been handed to the owner yet.
Transactions done in behalf of third parties of intermediaries would be particularly scrutinized when these are done in behalf of family or business partners, shared nationality or someone living in the same residence.
The Anti-Money Laundering Council (AMLC) also raised that it is a red flag “if the payment for real estate transactions comes from high-risk jurisdictions that are considered tax havens, regardless of whether the customer is a resident of the specific country or territory.”
Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno expressed hope to be able to be removed from the gray list by January 2023 by effectively following through the action plans monitored by the FATF.
INDUSTRIAL
Ten of the top Japanese manufacturers commit expansion projects worth 3 billion USD in the Philippines. Although, they have also identified the fiscal and operational bottlenecks that may put these projects in peril. These include “timely issuance of travel visas for their executives and engineers, the processing and release of permits and licenses by regulatory agencies, VAT and other additional taxes by local government units, and access to COVID-19 vaccinations.”
Included in the list of Japanese manufacturers are Brother Industries, Canon Inc., Seiko Epson Corporation, Terumo Corporation, JMS Co., Ltd., ROHM Co., Ltd., NIDEC Corporation, Mineba Mitsumi Inc., Murata Manufacturing Co., Ltd., and IBIDEN. They have chosen the Philippines as their manufacturing site of their most competitive products, leveraging on the high-quality human resources available in the country.
According to Trade and Industry Secretary Ramon M. Lopez, these Japanese investors in electronics and medical devices manufacturing “reaffirmed their confidence in the country’s economy as they plan to explore expansion and diversification of products in the country.”
These companies collectively represent 2.5 billion USD in investments, 6.9 billion USD in exports, and over 83,000 in total employment.
OFFICE
Business process outsourcing firms are looking to retain a hybrid remote and on-site work model in order to remain competitive against other major outsourcing economies.
The outsourcing industry was at 95% productivity by November of last year as restrictions loosened, with 70% of it coming from employees that worked remotely. Louie Benedict C. Hernandez, chair of Information Technology and Business Process Association of the Philippines (IBPAP) said that the hybrid model will help with “tapping employees that they could not reach with their physical location.”
According to Trade Undersecretary Ceferino S. Rodolfo, “the department will propose to the Fiscal Incentives Review Board approval of work from home arrangements past September.” There are also discussions on removing location restrictions for outsourcing firms planning to register for incentives in Manila. The government is considering allowing firms to register in areas that are vacated by POGOs, Mr. Rodolfo added.
RESIDENTIAL
Younger generations, college students and fresh graduates aged 18 to 24, are seen to be having a growing interest in condominium properties. With work-from-home setups and flexible working schedules continuing to be the norm, this age group may be looking for potential homes that are closer to the office.
As for the older generations, namely the millennial age group, they are looking more into apartment properties. It is said that this is due to their desire to have extra space to live in. There is also a growing online activity from the retiree age bracket as they try to adjust and grow their digital presence to adapt to the current way of things.
Wellness lifestyle real estate has become the trend among property seekers as the importance of home environment that promotes health and well-being grow amidst the pandemic.
HOSPITALITY
The pent up travel demand has driven RedDoorz, a hotel management company, to diversify its offerings and introduce a hotel brand called “Sans Hotels,” targeted towards Gen Zs.
According to Virgilio Maguigad, Director for Tourism Standards and Regulations of Department of Tourism (DOT), the opening of Sans Hotel is a vote of confidence for the growth of the industry in the coming years. With the anticipated strong local travel demands as the economy gradually opens, the department has been working closely with hotels to drive better business operations.
RedDoorz has taken advantage of the benefits and opportunities from the DOT’s accreditation requirements in order to witness the broader opportunities that can contribute to the recovery of the tourism industry amidst the pandemic.
ON RETAIL
According to the Global Agricultural Information Network (Gain) report prepared by the United States Department of Agriculture-Foreign Agricultural Service in Manila (USDA-FAS Manila), the food and drink e-commerce sales for this year would increase to 280M USD from 2020’s 216M USD as the market shifts towards online retailing as a consequence of the pandemic.
The e-commerce of food and beverages increased by 210% last year and is estimated to grow by 30% more this year. E-commerce is likely to remain as the preferred option even after the pandemic as stated in the Gain report.
Aside from e-commerce, there is another market shift in the food and beverage industry as the preference grows for hypermarkets, convenience stores, warehouse clubs, and supermarkets over the traditional sari-sari stores. This is due to the stable supply, safety, and convenience brought by the aforementioned channels. With this, modern retailers continue to expand their area of service including deliveries, having personal shoppers, and making online payment options available.
Sources:
Adel, R. (2021, July 01). RedDoorz launches new hotel brand to cater to Gen Zs. Retrieved August 06, 2021, from https://www.philstar.com/business/2021/06/30/2109339/reddoorz-launches-new-hotel-brand-cater-gen-zs
Arcalas, J. Y. (2021, July 05). Pivot to e-commerce to grow online sales of food, drinks by 30%: JASPER Y. arcalas. Retrieved August 06, 2021, from https://businessmirror.com.ph/2021/07/05/pivot-to-e-commerce-to-grow-online-sales-of-food-drinks-by-30/
Cahiles-Magkilat, B. (2021, July 15). 10 Japanese manufacturers set $3-B expansion projects in PH. Retrieved August 06, 2021, from https://mb.com.ph/2021/07/15/10-japanese-manufacturers-set-3-b-expansion-projects-in-ph/
Cordero, C., Jr. (2021, August 3). PHILIPPINE PROPERTY MARKET NEWS - JULY 2021 (Rep.). Retrieved August 6, 2021, from Cushman & Wakefield website: https://www.cushmanwakefield.com/en/philippines/insights/philippine-property-market-news-july-2021
Ibañez, J. P. (2021, June 26). Philippine BPO firms Eye long-term remote work strategy. Retrieved August 06, 2021, from https://www.bworldonline.com/philippine-bpo-firms-eye-long-term-remote-work-strategy/
Lacsamana, J. (2021, July 16). Ph real estate eyes opportunities as economy recovers. Retrieved August 06, 2021, from https://manilastandard.net/home-design/commercial/359919/ph-real-estate-eyes-opportunities-as-economy-recovers.html
Monitoring of property deals tightened. (2021, July 12). Retrieved August 06, 2021, from https://www.bworldonline.com/monitoring-of-property-deals-tightened/