PHILIPPINE REAL ESTATE SECTOR INSIGHTS FOR MARCH 2021
Apartment for Sale / COVID Property Market / House for Sale / Philippine Property Market
There is a continued growth in the wholesale price of construction materials in Metro Manila from February with year on year growth of 2% as reflected in the construction materials wholesale price index (CMWPI).
This reflects the bulk buying done by large construction firms that are picking up its construction initiatives after months of lockdown.
The pickup that began from February was driven by glass and glass products which rose to 14.4%, followed by reinforcing and structural steel (3.3%); concrete products and cement (1.2%); doors, jambs, and steel casements (0.5%); and hardware (1.5%).
On the other hand, construction materials that posted slower price growth were sand and gravel (3.5%), lumber (2.8%), tileworks (2.2%), PVC pipes (0.6%), and painting works (0.3%).
Prices will likely be restrained due to drop-off in demand for commercial and residential developments as a result of the impacts brought by the ongoing pandemic.
The Philippine Economic Zone Authority (PEZA) approved investments worth Php13.19B that are seen to generate an estimated amount of 2,447 job opportunities.
This is comprised of 33 projects (29 placed in Luzon and 4 in Visayas and Mindanao) with 12 for export; 11 for information technology; five for facilities; three for ecozone development; one for logistics; and one for utilities.
The approval of the projects is said to be their initiative to support the Philippine economy in maintaining competitiveness for investments.
PEZA is looking into booking P100B worth of investment pledges this year.
Moreover, PEZA supported the passage of Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act into law which cuts the corporate income tax (CIT) immediately from 30% to 25%. The CIT will further be reduced until it reaches 20% by 2023 to 2027.
This can contribute to enhancing the attractiveness of the country’s industrial segment to foreign locators.
With the ongoing pandemic, companies have implemented work-from-home arrangements that contributed to the employee productivity increase of 15-40% and to the absenteeism decline of up to 40%.
Alongside this was a reduction in cost on real estate and other expenses, such as utility and telecom bills, by around 20%.
It would be long before companies could return to normal office-based operations.
The real estate industry has been showing signs of recovery for the first quarter of year 2021.
The rise in the trend was brought by investors and homebuyers with greater buying power who started to regain their confidence amidst the uncertainties brought about by the current health crisis.
The Department of Human Settlements and Urban Development (DHSUD) stresses the property sector’s role in prompting economic recovery and looks into augmenting housing projects to generate more employment.
Increasing the private sector’s participation in promoting public-private housing development initiatives is also being considered.
The Tourism Promotions Board (TPB) Philippines launched the first hybrid Tourism and Technology Forum (TTF) with over 900 attendees from various tourism industry sectors.
It was to provide a platform for discourse for industry stakeholders to take advantage of recent developments and innovations in technology especially in the ‘SMARTourism’ campaign in hopes to keep the tourism industry alive amidst the pandemic.
The campaign aims to “strengthen digital platforms, ensure data-driven planning, and expand other tools for promotion and marketing.”
Furthermore, it also aims to “improve the efficiency of resource management, upgrade the level of our competitiveness, and to enhance sustainability through the use of technological innovations and practices.”
The forum hopes that this can spark changes in the travel and technology landscape, to go beyond improving tourism processes and transform the system itself.
As restrictions are continued to be enforced due to the worsening health crisis in the country, the retail sector is estimating a dive in their revenues as high as 70%.
Food chains along with non-essential retailers will eventually take 50-70% drop in their revenue.
With that, the Philippine Chamber of Commerce and Industry (PCCI) is encouraging Filipino consumers to purchase locally produced goods to contribute to the recovery of domestic businesses. Furthermore, it is also urging multinationals and local contractors, manufacturers, and enterprises to source their materials within the country given that they are available locally.
At the beginning of the year, the retail industry group reports to anticipate a “soft growth in sales for 2021 of 10%, higher than that of last year. But this can be subject to change based on the state of the country as the pandemic continues.
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