Friday, November 30, 2012

Pending Bills On Real Estate

September 19, 2012, 3:23pm
Several legislative measures that bear direct impact on housing and real estate are now pending in both Houses of the 15th Congress, mostly amendatory and reformative of various existing laws. The Senate Committee on Urban Planning, Housing and Resettlement headed by Sen. Ferdinand R. Marcos, Jr. recently invited CREBA to a public hearing where seven proposed bills were presented to be deliberated upon.
Sen. Antonio F. Trillanes IV filed Senate Bill No. (SBN) 399 entitled the “Small Condominium Unit Buyers Protection Act” which seeks to protect small condominium unit buyers from what he refers to as “onerous and/or unreasonable” contractual provisions and from “flawed and misleading” project information. This, however, is being addressed by the Housing and Land Use Regulatory Board (HLURB) headed by Commissioner Antonio M. Bernardo by updating the rules on advertisements under Presidential Decree (P.D.) 957.
Sen. Trillanes also filed SBN 261 entitled “An Act amending the Subdivision and Condominium Buyers’ Protective Decree” with the aim of updating and refining several provisions of P.D. 957 to further enhance buyers’ protection particularly in the context of today’s pre-selling schemes. Amendatory provisions to P.D. 957 are likewise being proposed by House Bill No. 4316 submitted by Reps. Susan Yap, Magtanggol T. Gunigundo and Rosenda Ann Ocampo.
SBN 1025 authored by Sen. Manuel M. Lapid, on the other hand, seeks to modify the definition of a condominium unit to cover industrial estates, amending for the purpose certain provisions of Republic Act (R.A.) 4726 or the “Condominium Act”. On this, we propose, likewise, for the inclusion of tourism estates.
Sen. Jinggoy Estrada introduced SBN 666 as an amendment to R.A. 7279, better known as the Urban Development and Housing Act or UDHA which has been in existence since 1992.
In his explanatory note, Sen. Estrada asserts that while UDHA gives qualified beneficiaries occupying government-owned and foreclosed lands the right of first refusal, “nothing precludes the government from bidding out the land” in favor of other qualified beneficiaries. The proposed bill seeks to provide the actual occupants the primary right in acquiring the land which they occupy.
In order to address many of the problems being encountered by homebuyers on installment payments which are perceived to be not fully covered by R.A. 6552 or the so-called Maceda Law, Sen. Miriam Defensor-Santiago filed SBN 2428. The bill, is entitled, “An Act to Provide Additional Protection to Buyers of Real Estate on Installment Payments by Requiring Subdivision or Real Estate Owners to have an Individual Title on every lot available first before offering the same for Sale, Prohibiting any Mortgage, Lien or Encumbrance on the same, making the Annotation on the Title of the Contract to Sell or Sale Mandatory, making it Compulsory for the execution of a Deed of Absolute Sale and the delivery of the Title to the Buyer upon Completion of Installment Payments, and providing other protective measures, including the imposition of Penalty for Violation Thereof.”
We shall try to explain thoroughly the possible consequences of a bill of such nature when the Committee calendars the same for discussion and we are confident that the good Sen. Santiago will consider the position of the private sector.
Presented to the stakeholders for discussion was HBN 5446 entitled, “An Act Strengthening the Balanced Housing Development Program, amending for the purpose R.A. 7279 or the UDHA” principally authored by Bagong Henerasyon Party-list representative Cong. Bernadette Herrera-Dy.
The bill seeks, among other things, to amend the balanced housing provision under Section 18 of UDHA to require condominium developers to also “develop an area for socialized housing equivalent to at least 20 percent of the total condominium area or project cost, at the option of the developer, within the same city or municipality, whenever feasible”.
We welcome comments, observations and recommendations from CREBA members on the subject bills. Let your voice be heard by sending us an e-mail via
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The CREBA leadership thanks some personalities for the success of its recently-concluded pre-convention symposium on two major emergent issues.
Engr. Miriam Lusica-Tamayo, national president of the Association of Structural Engineers of the Philippines (ASEP) and Engr. Danilo C. Terante, national director of the Philippine Institute of Civil Engineers (PICE) presented concepts on “Buildings for Tomorrow” and “Responding to Climate Change”, respectively, as part of the session on “Climate Change Adaptation and Disaster Risk Mitigation for Real Estate Development Projects.”
Former Housing and Urban Development Coordinating Council (HUDCC) deputy secretary-general Nestor P. Borromeo addressed the session on the “Redefinition of Socialized Condominiums and Low-Cost Housing Price Ceilings.”
The event was a prelude to the 21st Annual CREBA National Convention to be held from Oct. 17-20. Slated to be held in Puerto Princesa City, Palawan, the convention is the biggest national gathering of all stakeholders in the real estate industry.
The CREBA National Convention has always been known for its unprecedented initiatives in support of national development goals.  Prominent business leaders and captains of industry look forward to joining the said affair with keen interest.
 The event also teams with excellent business opportunities in the framework of private sector and government cooperation.
The focal point of this year’s convention is “Global Filipino: Key to Conserving Growth through Sustainable and Strategic Real Estate Development and Practices.”
All roads lead to this premier event where some 30 chapters from all over the country will converge to plan, work and collaborate on issues that directly and indirectly impact the real estate and housing business.

Hotel, Condo, Office, Leisure Dev’t Planned In 204-Hectare Property

Aseana City
October 1, 2012, 5:46pm
With about US$3 billion in investments from different developers, Aseana City, along Roxas Boulevard and adjacent to the SM Mall of Asia Complex, is earmarked to be another booming mixed-use district of Metro Manila in the next five years, according to D.M. Wenceslao & Associates, lead developer of the 204-hectare property reclaimed from Manila Bay.
Fifteen minutes from Makati, 10 minutes from the Ninoy Aquino International Airport and just a few steps from the Baclaran transport hub, Aseana City will host hotels, residential condominiums and leisure complexes in addition to the existing offices in the area, according to Delfin Wenceslao, Jr., president and chairman of the firm.
The triple-A rated construction firm has pump-primed the area, one of the few remaining large open spaces in the metropolis, with the Aseana One office development, offering over 20,000 sqm of leasable space across eight office floors. Aseana One is now 30 percent leased, with the balance on offer to business process outsourcing firms.
The firm is in talks with other companies and developers for the projects that will complement the ongoing developments within Aseana City such as the Belle Grande Manila Bay, which will provide 1,000 deluxe hotel rooms, and Solaire Manila with an initial 500 deluxe rooms.
“We are carefully choosing different locators which will complement each other and add value to the project,” said Wenceslao recently at the Asia CEO Forum held at the Alphaland Tents in Makati. “We are conceptualizing projects that other developers are not yet considering.”
This project along Manila Bay is where two of the four integrated casino and entertainment complexes is set to open by the first half of next year. The $4-billion entertainment city will have more than 3,500 hotel rooms and is estimated to employ 60,000 and attract one million tourists annually.
The company recently signed Tune Hotels of Malaysia to locate a 200-room budget hotel in the area, Wenceslao said.
These will add to developments like the existing Aseana One office and BPO facility, accredited as a PEZA IT zone , the Kings International School Manila and the Department of Foreign Affairs (DFA) passport center.
A Ford and Subaru car dealership and the Blue Leaf Filipinas Events Center will also open in the third quarter of 2013. It will also house the embassy of the State of Qatar.
According to Sheila Lobien, director of Jones Lang LaSalle Leechiu, exclusive leasing agents of Aseana One, the project’s proximity to the residential areas of Cavite and Las Pinas gives it a distinct advantage over other commercial districts.
Activity in the area will further be enhanced with the opening of the hotels in the entertainment complexes there including two six-star hotels and at least four integrated hotel-casinos.
Aseana City will also be the home of developer Alphaland’s Bay City at the Aseana West District. The 32-hectare development will have luxury residential condominiums, a marina and a retail strip.
D.M. Wenceslao & Associates Inc., as lead member of R-1 Consortium Inc., reclaimed the 220-hectare property in 1989 in partnership with the Philippine Reclamation Authority.

Quo Vadis? The Dep't. Of Housing Bill After 20 Years

October 10, 2012, 3:22pm
The success of any government housing program depends on a well-planned and holistic consideration of the various factors that should come into play in order to ensure effective and sustained program implementation.
It calls for an integrated system that brings together the different components of a complete machinery that could run the engine of housing production and delivery.  It also requires adequate and appropriate responses to the needs of human settlements through a balanced approach to urban planning and development, such as the development of new towns and communities that are equipped with the needed facilities and amenities conducive to humane living conditions.
In the light of the serious socio-political repercussions of the ever-increasing magnitude of homelessness which has ballooned to the present backlog of close to four million homes, and the major pump-priming role that housing activity plays in the economy, it is imperative that the government accords the highest priority to housing and urban development.
With the objective of raising housing production to the highest possible level to match the shortage and the compounding annual demand, our national leadership must show greater focus on housing concerns in accordance with a well-planned and holistic approach.
The Chamber of Real Estate & Builders’ Associations, Inc. or CREBA has long perceived that since the abolition of the Ministry of Human Settlements in the wake of the Martial Law regime’s downfall, the housing effort has suffered in terms of government prioritization at the highest level.
Surprisingly, government allocates less than one percent of the total government expenditures for the housing sector, or less than one-tenth of a percent of GDP on the average. This makes Philippine public spending on housing one of the lowest in Asia, according to former NEDA chief Cielito F. Habito in his paper for the Asian Development Bank (ADB) in 2009.
It is CREBA’s view that since shelter is one of the three most basic needs of man, provision of the same should enjoy a priority at least equal to tourism, social welfare, environment, education and other fundamental government services, and should be similarly addressed by a full-fledged Department rather than just a mere Coordinating Council.
As early as the early 90’s during the Ramos presidency, CREBA has been pushing for the passage of the Department of Housing bill into law. Government data at that time indicate that there was a backlog of just over a million housing units.
Various versions of the bill have been filed almost Congress after Congress, and were fought for valiantly by some of our progressive-minded leaders who served as chairmen of the Committee on Housing in the Lower House.
In the Senate, the bill went through at least six generations of Housing Committee chiefs.
Unfortunately, all these efforts somehow lost ground and the bill, many times over, met its fateful demise in the gates of the Senate and never reached the bicameral level. Only this time has the industry seen a Chairman of the Senate Committee on Housing, in the person of Sen.  Ferdinand Marcos, Jr., who took serious efforts to really push the passage of the DHUD bill.
In 2004, the Medium-term Philippine Development Plan indicated that housing has an estimated multiplier effect of 16.6 times, meaning that for every peso spent for housing-related purposes, it generates about P16 of economic activity for the country. Yet, the actual housing construction from 2001-2004 versus the housing need was “modest”, the plan says.
HUDCC estimated the backlog then to be at over 3.7 million units. The concentration of the housing need was Southern Tagalog, Metro Manila and Central Luzon which made up 56 percent, while 21 percent was in Visayas. The remaining 23 percent was in Mindanao.
To address this issue, the Arroyo government included four major strategies namely, (1) expanding private sector participation; (2) addressing the housing requirements of both formal and informal sectors; (3) LGU capacity-building in the context of decentralization and devolution; and (4) strengthening the institutional capacity of the housing agencies by making the elevation of HUDCC into the Department of Housing and Urban Development (DHUD) a priority legislative agenda. However, this, too, became no more than a mere concept on paper.
Under President Aquino’s incumbency, the Philippine Development Plan for 2011-2016, using the National Urban Development and Housing Framework (NUDHF) for 2009-2016 as basis, estimates that the magnitude of housing need, more clearly defined as the housing backlog plus new households, is so enormous it could reach 5.8 million housing units by 2016.
CREBA believes that the creation of a Housing Department is not only imperative – it is even long overdue. The administrative and operational structure is already in place – comprised of the existing housing agencies and GOCCs. There is, thus, no compelling need to disturb this existing infrastructure.
The proposed Department of Housing Bill aims to address housing in its totality by encompassing four major aspects of land and housing development: finance, production, regulation and administration.
Any half-measures, focused only on one or two of these aspects, would be largely ineffective in view of the gravity of the current housing situation and may only result in waste of government funds and effort, if not failed expectations on the part of the millions of homeless.
Last July, 16 senators voted yes on the DHUD bill and approved it on third and final reading. This means that after the bicameral committee shall have consolidated their respective versions, the creation of the Housing Department is just one step away from reality.

Invest In Boracay Now, Foreign Realtor Says In Property Report

October 17, 2012, 6:19pm
Apparently, now is the “Time for the Philippines,” as international realtor Claire Brown asserts.
Brown (, in her buyer’s advisory column in Property Report South East Asia luxury magazine in its September issue, gave a “little tip” for foreign and local investors: “Boracay is about to rock!”
First, she narrated to her readers why Boracay is truly special: it “is famous for its gorgeous and bustling pure white sand beaches, turquoise waters and swaying palms… Boracay is already a well established and dearly loved tourist destination.”
And echoing the Philippines’ tourism campaign, she said: “For me, it’s the funniest place on earth and my favorite place in the Philippines for a great beach holiday and a side order of hell raising by night, if that happens to take my fancy.”
After bustling with nostalgia, she then gave her invaluable investment assessment. She attributed it mainly to the upgrade of Boracay’s airport in nearby Caticlan to international status in 2014. That’s just two years away. With the construction of the new terminal and extended runway, “this will mean direct flight routes with all major Asian gateway hubs, notably HK, Singapore, Seoul, Shanghai and Beijing.”
“Add this unprecedented influx of well heeled leisure seekers to an island that is already maxed out for a decent proportion of the year, and add on top of that an already acute shortage of luxury accommodation… and you have yourselves the perfect storm,” she declared.
The public or private sector can choose to step in to weather what Brown foresees as a perfect storm. Among the projects in the island that can help Boracay fulfill its tourism potential is Boracay Newcoast on the island’s eastern side.
Covering 140 hectares and an estimated 14 percent of the island’s total area, Boracay Newcoast is this paradise’s first master planned integrated tourism estate.
Boracay Newcoast boasts of two districts that are ideal for the investing community.
First is the Shophouse District for restaurants, souvenir shops, diving equipment and rental stores and the like.
Second and perhaps more significant is the Boutique Hotel District. Lot buyers here will get to build their own hotel brands or tie up with foreign institutional hotels. This district is particularly enticing because their guests will have access to three private beach coves with one kilometer of pristine white sand.
“Once our Boutique Hotel District institutional investors start building their hotels and launch their accommodations in the next few years, this will partly solve the ‘perfect storm’ that Brown predicts. On the other hand, this also means that more foreign tourists will get to experience the pleasures of Boracay as a paradise,” Global-Estate Resorts Inc. (GERI) Vice President for Marketing and project head Abraham Mercado said.
GERI is the developer behind Boracay Newcoast and is the tourism development arm of Filipino tycoon Andrew Tan.
On its own, GERI intends to develop five international and local hotels within Boracay Newcoast to beef up Boracay’s room inventory by 1,500 hotel suites. GERI also intends to transform Boracay into the Ibiza of Asia.
Home to Boracay’s only pool concert arena, Savoy Hotel Boracay will host various electronic dance music festivals and concerts. Overlooking the pool and bar area is a 400-sqm dance roof deck capping a row of commercial establishments.
“Ms. Brown is clearly a realty clairvoyant. With all the business and tourism activities happening in Boracay, it will only grow more intensive, investment-wise, in the years to come. So now is the perfect time to invest, with a view to reaping the fruits of your hard work in the future,” Mercado concluded.

Grand Cenia Residences: Luxury Address

Filinvest’s Latest Project In Cebu
October 22, 2012, 4:14pm
The address of luxury cosmopolitan living is at Grand Cenia Residences, a prime development of Filinvest, that offers sweeping views of Metro Cebu’s skyline from the top floors of the Quest Hotel & Conference Center.
Designed with the features that will make it Cebu’s most exclusive address, Grand Cenia Residences offers one, two, and three-bedroom units ranging from 57 to 110 sqm.  The units will have well-designed dining, living and receiving areas, kitchen and toilet and bath. The two and three-bedroom units also have a utility/maid’s room.
As the residential units are located in the 19th to 25th floors of the hotel, residents will have the privilege of panoramic views of the city.
A wide range of hotel amenities and facilities, located at the seventh floor are within easy reach, such as business centers, fine dining restaurants, lap and kiddie pools, landscaped gardens and a coffee shop.
More lifestyle options are also available from the commercial units at the ground level.  Quest will manage the hotel section of the development, promising residents and guests the high standards of hospitality.
Unit owners can also join, for a nominal fee, the Quest Privilege Club, which enables them to get special discounts at the rooms, food and beverage, and use of business center facilities at Quest Hotel & Conference Center Cebu.
The professional management of the hotel offers services such as security, rental assistance and more.
The convenience of living in a hotel does not stop within its walls.  Grand Cenia is located along the bustling Architect Reyes Avenue, which puts residents in the midst of activity and excitement in the city’s business section.
Destinations for work and play are also minutes away as the Cebu Business Park, Uptown District and IT Park, commercial centers like Ayala Center and SM City, and educational and medical institutions such as St. Theresa’s College and Cebu Doctors’ Hospital are merely minutes away.
Grand Cenia Residences is another project of Filinvest Land, Inc., known for a history spanning almost 50 years. Filinvest has built more than 135,000 homes on over 2,350 hectares of land to fulfill the dream homes of Filipino families. For more information call +639173236123.

Amisa Develops Ideal Holiday Lifestyle

Robinsons Luxuria
October 29, 2012, 4:39pm
An address for a perfect holiday – that’s where luscious greenery, fresh air, the sound of the waves, and of course, the calming view of the sea, lulls the residents to slow down and relax.  Robinsons Land has developed that address in Cebu, and has named it AmiSa.
Named after the Sanskrit term for the object of beauty and pleasure, AmiSa is Robinsons Luxuria’s resort-inspired development in Cebu that promises to provide its future homeowners all the ingredients that make up for a perfect holiday living all year round.
This six-hectare residential paradise, located in Punta Engaño, Lapu-Lapu City in Mactan Island, is expected to redefine “leisure living” that will offer the discerning Cebuanos the soothing comfort that communing with nature brings and at the same time, allow them quick access to the city.
Only a few minutes drive from the airport, AmiSa’s lush landscaping, amenities and building management services guarantee the future residents a slice of a paradise that nurtures recreation and relaxation.
Upon completion, the project will feature six high-end residential condominiums that have the alluring views of the beach and Cebu’s coastline as its backdrop.
The development is also set to house a five-star hotel with the finest amenities including pools, sports activity areas, tree-lined walkways, pocket parks, and open spaces that lead to a pristine white sand beach.
Other amenities spread throughout the complex include a clubhouse, indoor gym/ fitness center, swimming pool, children’s pool, videoke room, game room, mini-theater, biking/ jogging paths, multi-purpose court and playground.
These same set of amenities, according to Robinsons Luxuria, are envisioned to bring unit owners closer to nature and encourage them to enjoy a “live-work-heal-play” lifestyle that has become a must in today’s stressful society.
To provide this kind of lifestyle, Robinsons Luxuria has designed an efficient layout of the whole resort-inspired development so that that all units will come with spacious balconies, to open grand views of the sea.
Of course, a sense of security is equally essential in the joys of owning a seaside weekend home. With the safety provided by the project’s gated complex, unit owners can afford to lock up and go.
Personalized building management services provide the assurance that the needs of unit owners and the general upkeep of the facilities are attended to in a professional manner. For more information about our Project, call +639173236123.

Tips In Buying Home Insurance

October 31, 2012, 3:29pm
Many homeowners think that by purchasing property insurance, they have already gained enough financial protection for their homes and other valuable possessions. Only when an unfortunate event like a fire or major flooding causes irreparable damage to their property do they realize the inadequacies in their policy.
This could be because their coverage is not enough, or their policy had already lapsed, causing their claim to be denied.
“The last thing you need when filing a claim is to find out you’re not covered,” said Malayan Insurance Retail Fire Underwriting Head Sharon Navarro.  Malayan Insurance has built its reputation for promptly settling valid claims, and has been leading the non-life insurance industry every year since 1970.
First, keep in mind the level of protection you want so you can have a policy tailored to your needs. They need to realize that standard fire policy covers only fire and lightning but additional coverage may be bought back such as Acts of Nature perils through an endorsement in their policy. These AONs may include typhoon and flood, earthquake fire and shock, among others.
Second, insurance premiums are also affected based on several criteria such as location of the property and whether it is a residential, general, warehouse, or industrial facility. Buildings constructed of concrete with sheet roofing or better may also be given premium discounts, among other considerations.
Third, homeowners must research the reputation of the company they will entrust their property to since this will have a direct impact in rebuilding their lives should the unfortunate happen. The insurer must have a proven track record for efficient service backed by sound and stable operations, with strong financial capability to be able to pay just and valid claims quickly.

Produce Indigofera Seeds For Money

October 31, 2012, 4:31pm
Here’s one money-making project that is very doable and requires very little capital. You can integrate it in your present upland farm or even just around your residence. The project is Indigofera seed production for money.
During the last Agrilink trade show at the World Trade Center, Alaminos Goat Farm sold packets of Indigofera seeds at R40 per pack. The pack could have easily contained 200 seeds or more. That’s all that you have to spend to start your project of producing Indigofera seeds for sale.
Indigofera is a relatively small tree that yields nutritious leafy twigs that are relished by goats, cattle, carabaos and probably even pigs and free-range chickens.
In fact, Indigofera is the main forage crop in the Alaminos Salad Garden for goats that Rene Almeda and his sons are growing in their farm. The beauty about Indigofera is that it is a hardy plant and will grow in most parts of the country.
Aside from the green leaves being fed to the animals fresh, the Almedas are also making the shredded leaves into pellets that are fed to the animals. Feeding pellets has a number of advantages.
Because of the good attributes of Indigofera, many people are actually looking for sources of planting materials. We should know because so many people are asking us where to buy some seeds. One of the latest who asked us is Boots Romillo who has a farm in Cagayan. He went to purchase some seeds from Alaminos which he brought to his relative who is taking charge of his farm.
With the seeds he bought, he could actually start Indigofera seed production as a possible money-making business. He could plant the seeds and maybe wait for three years before the trees start bearing fruits. From then on, production could continue for many years because Indigofera is a perennial tree.
He could sell the seeds in Cagayan valley where there are many animal raisers. He could also sell the seeds in Manila and other provinces in agri-fairs and other such occasions.
Another possibility is to sprout the seeds and sell seedlings also. We remember Vice Gov. D.V. Savellano of Ilocos Sur in an earlier edition of Agrilink. He was interested in buying all the 5,000 seedlings of Indigofera at R20 apiece. However, many other buyers have bought the stock ahead of him.
The beauty about having mother trees that are well maintained is that they could produce seeds year after year. Disposing the seeds or seedlings could be a matter of exposure during trade fairs, harvest festivals, country fairs, garden shows and other such occasions. One can even advertise and sell through the internet.
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Property Boom Altering Manila Skyline

By Rosemarie Francisco (Reuters)
November 26, 2012, 5:42pm
The capital of the Philippines is in the throes of a property boom described as the best in two decades, reflecting the increasing confidence in an economy that only recently began shedding its image as one of the region’s basket cases.
Nowhere is it more obvious than at Bonifacio Global City, a commercial and residential property development on a portion of land carved out from Manila’s biggest army base.
Originally sold by a cash-strapped government in the mid-1990s, building only got underway in earnest during the last six years after Ayala Land Inc took ownership. Under the Spanish-Filipino business clan that runs Ayala, construction is now going at full tilt.
‘’Work here is 24 hours,’’ said Renel Reyes, an engineer and property manager overseeing a 30-storey tower due to be completed by the year-end.
Soon to be home for Nickel Asia Corp and local conglomerate Aboitiz Equity Ventures Inc, NAC Tower is just one of several tower blocks under construction. As his own workers carried in sleek aluminum rails, Reyes said the state of the market was obvious to anyone who looked up.
‘’There are so many tower cranes, a good indicator of the construction boom right now.’’
Located near Makati, the main business district that grew up in the 1970s, Bonifacio is a project in progress, but rents at 800 peso per square metre ($19.5) are already catching up with its older, established, but saturated rival.
Though rents paid in Makati have recovered almost 30 percent in the last three years, they are still way below the peak of 1200 pesos/sqm ($29) paid before the global financial crisis hit in 2008, data from property manager and consultancy Jones Lang La Salle Leechiu (JLL) shows.
That makes renting in Manila’s business districts far cheaper than Hong Kong, Shanghai or Singapore. But then infrastructure remains a drawback, as anyone arriving at Manila’s tired, old airport quickly realises.
Still, as Bonifacio lures companies tired of Makati’s cramped spaces with its sprawling parks, luxury hotel chains and
Italian supercar makers have followed the money.
Lamborghini opened its first Philippine showroom, side by side with Ferrari, in Bonifacio, while Hyatt and Shangri La hotels are opening there soon.
Office space in most new buildings are snapped long before completion. At the NAC Tower, for example, only six floors remain un-let, but Reyes said they have potential takers.
Take up of new office space this year is set to hit a record 400,000 to 450,000 sqm, up as much as 25 percent from last year, according to Jones Lang and CBRE Philippines, another of the country’s biggest property manager and advisers.
‘’Pre-leasing is back,’’ said Rick Santos, chairman of CBRE.
‘’We are now experiencing the best real estate market in the Philippines in the last 20 years.’’
The primary driver of demand for office space comes from business process outsourcing (BPO) firms catering for European and American multinationals that want to cut costs.
With one of the region’s fastest growth rates, GDP grew 6.1 percent in the first half, the Philippines has shown resilience in the face of falling demand in the West and China, that other more export driven economies must envy.
Analysts say the Philippines could achieve its first investment grade sovereign debt credit rating in the next 12 months, about seven years after ending its debtor-nation status with the International Monetary Fund.

Inflation Seen Lower In November

November 26, 2012, 5:52pm
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. yesterday said inflation for the month of November could be lower than October’s 3.1 percent due to relatively stable supply and demand conditions of the past month.
Tetangco forecasts inflation this month could hit a low of 2.7 percent to a high of 3.6 percent which was September’s rate.
“The BSP expects the November inflation to be sustained at 2.7-3.6 percent which is well within the target range of 3-5 percent,” he said. “Supply conditions remained favorable while demand continued to be robust.”
The equally stable exchange rate and fuel prices may have pulled inflation lower than September’s 3.6 percent. “Oil prices were broadly stable while the peso’s relative firmness helped support price stability,” said Tetangco.
The latest inflation quarterly report from the central bank indicated that inflation outlook remains manageable which is providing room for monetary policy to support economic growth despite the prevalent uncertainties outside of the Philippines.
Baseline forecasts indicate a benign inflation path, with the risks to the inflation outlook considered to be broadly balanced, the BSP report said. “Potential upside risks to inflation include pending power rate adjustments and higher global prices for some grains. Nonetheless, subdued global demand could moderate upward pressures on international commodity prices, thus tempering the overall inflation outlook,” it added.
According to Tetangco, from a monetary perspective, the central bank’s current policy stance “remains consistent with prevailing monetary and price conditions.” “We will continue to be watchful of any emergent risks that could alter the inflation outlook and expectations and calibrate monetary policy as warranted.”
In the BSP report, it said additional policy support amid a manageable inflation outlook could help ward off the risks associated with weaker external demand by encouraging investment and consumption.
As of end-October, the country’s average inflation was at 3.2 percent. The consumer price index declined last month because of the lower prices of key food products such as vegetables and oils. Prices of fruits, fish, rice and sugar, in the meantime, had tempered price increases during the period.

Banks’ Real Estate Exposures Reviewed

November 26, 2012, 5:56pm
The Bangko Sentral ng Pilipinas (BSP) is currently studying proposals to adopt a case-to-case basis for banks’ real estate exposures depending on capital base.
As part of prudential measures, banks are imposed a 20 percent limit of its total loan portfolio as credit to the real estate sector. Most banks however do not reach this limit, some are exposed only by as much as 15 percent of total available credit.
BSP sources said changes to the rules will not only adjust real estate exposures against a bank’s capital but also consider the entity’s single borrower’s loan limit. How much credit released to the real estate sector will also be measured against adequate capital and related risks.
BSP Deputy Governor Nestor A. Espenilla Jr. in the meantime said that the revisions made in the way the central bank captures real estate exposure data by including investments in debt and equity securities and by expanding the scope of activities that are real estate-financing related, are yielding information that may warrant a review of banks’ real estate exposures.
“As the data on real estate exposures of thrift banks industry to residential real estate and socialized housing get collected systematically along-side that of universal and commercial banks, we are looking to relate real estate exposures to banks’ capital base rather than just as a portion of the loan book,” Espenilla said in a recent gathering of thrift banks. “This can then be the basis for re-visiting existing prudential limits as may be necessary.”
Based on the recent amendments on real estate loans’ data, the inclusion of all loans, investments in debt and equity securities are now counted as a bank’s real estate exposure.
By BSP definition, real estate activities are activities that include construction and development of real estate projects as well as other ancillary services like buying and selling, rental and management of real estate properties. This is a wider definition from the original circular which limits real estate activities to the acquisition, construction and improvement of real estate property.
The country’s large-capitalized banks and some big thrift banks reported real estate exposures worth P561.6 billion as of end-June, up 18.9 percent year-on-year and 4.4 percent from the previous quarter ending in March.
The 38 universal/commercial banks accounted for 77.3 percent of total exposure or P434 billion while 22.7 percent or P127.6 billion are from the 71 thrift banks.
Majority of the industry’s real estate exposures are real estate loans, about 97.3 percent of total while the remaining 2.7 percent are investments in securities issued by real estate corporations.
Espenilla said earlier that the objective of revising real estate exposures’ data is to improve what are currently being reported by the banks and the ratio of the real estate loans to overall loan portfolio.
To implement the new rules, the BSP is requiring all universal/commercial and thrift banks and their trust departments to submit a quarterly expanded report on real estate exposures on a solo- and consolidated-basis. The first report should use the fourth quarter data for 2012.

The Way Forward For Housing

November 14, 2012, 4:11pm
True to its theme, “Global Filipino: Key to Conserving Growth Through Sustainable and Strategic Real Estate Development and Practices”, the 21st Annual CREBA National Convention held last October was one of the ways the organization hopes to fulfill its role in linking sustainable approaches to keep the industry’s impressive growth path.
Government promulgated R.A. 7279 or the Urban Development and Housing Act of 1992 (UDHA) primarily to encourage strong private sector support in the implementation of mass housing projects. This was to be done through the granting of incentives such as simplification of documentation and financing, one-stop-shop, and tax exemptions for engaging in socialized housing.
CREBA recognizes the need to strengthen UDHA, particularly on strategies to strengthen the local government units’ capacity in the delivery of housing services. There is a need to promote greater public-private partnership in the development of sustainable communities.
CREBA likewise recognizes the need for the Housing and Urban Development Coordinating Council (HUDCC) to adopt a more pro-active stance and ensure that these incentives are availed by the private developers. That will be encouraged through the formulation of common guidelines in the implementation of Section 20 of the law and the granting of tax holidays for mass housing projects to address the huge backlog.
CREBA strongly supports the priority Housing Bills that are now pending in Congress, notably the creation of Department of Housing and Urban Development, and the proposed bill that would require housing developers to comply with Section 18 of UDHA. Those initiatives will surely promote efficiency which will lead to the increase of in-housing stock.
Hence, we urge HUDCC to call upon concerned government agencies to strictly comply with the specific provisions of UDHA and direct BIR to accept the Socialized Housing Certification issued by the HLURB. This will be made as the only requirement for the issuance of Certificate Authorizing Registration (CAR)/Tax Clearance (TCL) to the Registry of Deeds for housing developers.
We also urge HUDCC to complete the evaluation of the proposal to adjust the loan ceilings for socialized housing in light of recent developments and align this with the housing program of the Aquino administration.  We also urge to consider Socialized Housing Condominiums as alternative compliance to Section 18 of UDHA.
In addition, we urge the adoption of multi-tiered socialized housing price ceiling of up to P240,000 for the informal sector, up to P400,000 for the formal sector, and up to P850,000 for the medium-rise buildings or condominium units, provided they are located in urban areas.
Corollary to this, the increase of the price ceiling for low-cost housing from the current P3 million to P3.5 million for those who want to avail of income tax holidays of the BOI will be a welcome move. This will contribute to increase in housing units.
Government must finally adopt common guidelines and simplify procedures in the issuance of housing permits and licenses to avoid duplication of functions between HLURB and the local government units.
On real estate service practice, we urge the legislature to introduce amendments to the Real Estate Service Act (RESA) to address the number of sales agents to be hired by licensed brokers.
For its part, CREBA continues to strongly support and lobby for the immediate passage of the Bill that would create the Department of Housing to respond to the challenges of urbanization.
Just how well we can achieve our objectives shall be the measure of our collective will, and so I enjoin all our members and partners to rise to the occasion.

The Benefits Of Condo Living

Federal Land Cites Lifestyle Attractions
November 14, 2012, 4:15pm
ONE-BEDROOM deluxe condo.
ONE-BEDROOM deluxe condo.
With so many high-rise residential developments now sprouting almost everywhere, real estate developers have learned to employ different strategies for their projects to be singled out. Some package their products as resort-inspired residences, putting emphasis on luxurious amenities. Others tap foreign endorsers and celebrities to increase market value.
But all that seem to have changed with the series of flooding and other natural calamities that had hit the country in recent years. Families who have become wary of suddenly finding their homes inundated with flood waters have since demanded for residential developments in well-located areas (i.e., flood-free, located on higher grounds), thus making high-rise living or the so-called condominium lifestyle a much-sought after commodity.
Jose Mari Banzon, general manager of Federal Land, said it’s about time home buyers and investors consider the added value of investing in a high-rise residential development.
Federal Land is the property development arm of GT Capital Holdings. It has established a reputation as a builder of quality, high-rise residential projects.
“By adopting international standards in all our high-rise developments, we are not only providing clients the convenience of having all things they need easily within reach, we also afford them peace of mind knowing that their properties are safe from harm,” explained Banzon.
He enumerated five reasons why it is time people should consider “condo living” as a rewarding investment.
Safety ensured
Condo living is usually more appealing because of ease of maintenance as compared to a house.  The units are also easier to protect when you leave since the unit’s safety is protected by security measures that have high-tech features such as CCTV cameras, fire protection alarm system, and 24/7 roving guards.
Federal Land’s project in Makati, called The Grand Midori Makati, adds one feature not common to other high-rise developments – a Personal Access Card Key (PACK) issued to unit owners, to eliminate unauthorized access to residents’ floors.
Higher appreciation
Investors know that most high-rise developments are popular today owing to their long-term value and high appreciation. A recent study conducted by CB Richard Ellis, a property management consultant, showed that “investment in green buildings is recoverable not only through energy cost savings but also through higher rent and increased occupancy in the long-run.”
The latter notion was affirmed by another research which indicated that larger units and more luxurious apartments are now being preferred by quality expatriate tenants. This market covers those who are willing to pay an average of USD4,000 per month for a 250-sqm, three-bedroom luxury unit.
Lower total cost of ownership
Buying a condo unit does not entail individual land ownership, so  you get to own a piece of property at a fairly ‘inexpensive’ price since it basically gives full ownership of the unit without the sole responsibility of owning the land.
The combined ownership allows free use by residents of existing facilities and amenities of the condo. Some condo developments such as The Capital Towers in Quezon City and Paseo de Roces in Makati City also include the provision of small business establishments such as a mini-grocery, clinic and small office, so tenants do not have to leave the building.  In fact, the MyHOBS concept at these developments also allows unit owners to put up their own small business right inside their units.
Enviable location
If you are one of those busy executives in the metro who have become tired of long commutes to and from work, then living in a condo could be just the right choice since those addresses are usually well-situated in the city. This way, you no longer need to wake up early to compete with others during the early morning rush, plus you also get to spend more quality time with your family and friends since your workplace and your home are just a short distance away.
Proven track record
With a consistently growing number of high-rise condos rising in every corner of the country, finding one’s dream property may well seem to be just a matter of location. Top considerations such as accessibility and proximity to schools, hospitals and similar conveniences are mixed with the enticement of living in developments replete with an array of amenities such as clubhouses and 24/7 security.
But plunging headlong into such an important investment, however, should not only be dictated by these preferences. One must also consider the image and reputation of the property developer in deciding where to buy to ensure that one’s investment will provide handsome returns in the years to come.
As a member of one of the country’s biggest business conglomerates, Federal Land has gathered 40 years of experience in building homes and communities in some of the best locations in the country, and has made many Filipino dream of owning a home a reality.

Cushman & Wakefield Opens PH Office

November 19, 2012, 6:07pm
Cushman & Wakefield, one of the top privately held real estate services firm, has expanded into the Philippines. The new office in Manila will be its fifth new office in Asia Pacific.
Sanjay Verma, CEO for Asia Pacific commented: “This move is in line with our five-year strategic plan, which contains an aggressive expansion plan for our business in Asia Pacific. We have opened five new offices so far this year in Asia Pacific and we expect to open another one in the coming months.”
Arsh Chaudhry, executive managing director, said: “We have opened an office in the Philippines because our clients are there and need integrated service offerings. We have already witnessed a number of our clients choosing to set up their back office in the Philippines. This trend is set to continue. Efficiency pressures in Europe and the United States will continue to drive the outsourcing business further in the Philippines. The C&W platform will give us the ability to reach out to investors and occupiers globally and introduce best in class services in the Philippines.”

Spaces For New Condo Lifestyle

Cidades Park
November 28, 2012, 4:17pm
Many define quality of life in terms of living in a good residence near work, school, and lifestyle centers, where travel time does not take away time for the family.
This is the quality of life that Calmar Land Development Corp. had in mind when it launched Cidades Park, a two-tower, medium-rise condominium development in Mandaluyong City. The condo experience there states convenience and high-quality with the good location, low-density occupancy, generous units, and high-end features.
Standing on a 5,000-sqm property at the corner of Samat and Lopez-Rizal streets, Cidades Park is only one block from Shaw Boulevard and the bustling Ortigas business district. The community is 10-15 minutes from Makati, Greenhills, and Bonifacio Global City and is accessible by public and private transportation.
The project sits on one of Mandaluyong City’s highest points and one of the few locations unaffected by flood. It is surrounded by residential areas, in a quiet neighborhood for a more intimate family gathering.
The 11-story condominium towers will be of mixed-use design, with seven floors of residential units and the first three floors dedicated to the lobbies and commercial spaces for retail and service conveniences to serve the residents and their visitors. Its medium-rise setup only allows a maximum of only 14 units per floor at both towers (total of only 210 units).
The development features premium space planning, ensuring that every unit will provide residents with the comforts and conveniences of a real home. Available are one-, two-, and three-bedroom units ranging from 40 to 118 sqm, and special Garden Units ranging from 61 to 175 sqm. The units are generously proportioned to accommodate future requirements of upwardly mobile individuals and starting families.
The generous unit layouts are further enhanced by high-end features rarely found in most condominiums. The units come with luxurious features such as a three-meter ceiling height in all units, 100 percent power supply backups, U-shaped kitchen with installed exhaust hoods, utility rooms even in a one-bedroom unit, provisions for washer/ dryer and multi-point water heater in bathroom, cable TV connections in all rooms, and multitude of electrical outlets that dispenses with the use of extension cords in the kitchen.
From the two-story high driveway and al-fresco lobby to its elegant tower lounges and spacious hallways, every corner evokes inspired design concepts. The 1:1 unit to parking ratio provides residents with carports within the development. Security is guaranteed with 24/7 CCTV installations.
Sixty percent of the development is dedicated to open spaces and amenities. The podium level at the fourth floor is home to the Podium Park, featuring three pools (lap, adult, and children’s), gazebos and cabanas, and playground and picnic benches set amidst the tropical trees and landscaping.
The indoor amenities include a fully equipped fitness gym, day care center, and multi-purpose function rooms; all designed to cater to a wide range of activity choices, from the leisurely and relaxing to the active and exciting.
The Garden Units at the podium level, are a class of its own, coming with open deck and garden.
With almost 25 years of experience in property development and over 20 years of projects in its real estate portfolio, Calmar Land is known for its residential projects across the CALABARZON and now in Metro Manila.

The National Land Use Act

November 28, 2012, 4:22pm
Among the many bills on housing and real estate pending in the legislature is House Bill No. 6545 or the proposed National Land Use and Management Act (NLUMA). In the 21st CREBA National Convention in Palawan, Cong. Rodolfo G. Valencia reported that the current version of the bill, principally authored by Cong. Kaka Bag-ao, was filed on Sept. 6, 2012. It was first read on Sept. 10, approved on second reading a day after, and approved on third reading on Sept. 20. It was swiftly transmitted to the Senate on Sept. 26.
The Constitution mandates that all sectors in the country should be given optimum opportunity to develop it. It covers the principle of equitable land access for all sectors premised on the judicious allocation of lands to achieve well-balanced socio-economic development to ensure prosperity for the greatest number.
The property sector has never been against the allocation of the best and most productive lands for agricultural purposes to provide food security.
However, modern times dictate that mere allocation of land is not enough. We need to apply modern technology in food production, which we lack.
We in CREBA recognize the need for a clear, consistent and socially acceptable land use policy that will remove the inconsistency brought by conflicting laws on land utilization and resolve conflicts due to competing land use.
We cite some of the following existing laws dealing with land use:
Republic Act No. 7279 or the Urban Development and Housing Act (UDHA) of 1992 classifies all cities regardless of their population density, and municipalities with a population density of at least 500 persons per square kilometer as urban areas and reserves them for human settlement and other non-agricultural uses.
Republic Act 7916 or the PEZA Law identifies certain areas as ecozones under the jurisdiction of the Philippine Economic Zone Authority (PEZA) and reserves them for agro-industrial, industrial, tourist, recreational, commercial, and other non-agricultural uses.
Republic Act 8435 or the Agriculture and Fisheries Modernization Act of 1997 identifies areas as Strategic Agriculture and Fisheries Development Zones (SAFDZ) which are set aside for agricultural development.
Republic Act 6657 or the CARP Law specifies the lands which are to be used for agrarian reform purposes.
Republic Act 7160 or the Local Government Code confers upon LGUs the authority and responsibility to determine land use in their localities through their zoning powers.
The DENR charter provides it exclusive jurisdiction over lands of the public domain as well as the power to implement laws intended for environmental protection.
To CREBA’s mind, there is no need for a new legislation since the goals sought to be attained  food security, environmental protection, agrarian reform, urban land reform, agricultural development, industrial development, and the like  have already been addressed under various existing laws. All that is necessary is simply the proper application and implementation of these existing laws.
From the words of veteran legislator and Realtor Cong. Valencia, an original incorporator of CREBA, the NLUMA Bill is redundant, usurpatory, and overreaching. He asserts that it serves as a mere camouflage for perpetuating the CARP, and diverts attention from the real issues and problems on the ground.
To be socially acceptable, a land use policy must treat equally the Constitutional mandates of undertaking a just distribution of agricultural lands, and providing affordable and decent housing and basic services to underprivileged and homeless citizens.
The interests of a nation and its citizens require the highest and best use of the land and the widest distribution of land ownership.
The housing industry is no doubt a vital sector in our country's future. It is a key sector of our economy that addresses not only the problem of homelessness but provides millions of jobs to the unemployed and billions of revenues to government.

Developer Plans R50-B New Projects

Sets R5-B Follow-On Offering
November 28, 2012, 5:14pm
Affordable homes firm 8990 Housing Development Corporation, soon to be listed via the back door, is planning a follow-on offering of about R5 billion to partly fund projects valued at R50 billion.
“We’re exploring all options to raise equity and boost production, given the overwhelming demand in mass housing,” said 8990 HDC president Jesus Atencio in an interview.
Atencio said they are now in the process of taking over IP Converge after acquiring 80 percent of its shares from IPVG Corporation for 95 centavos a share or about R210 million.
He said they hope to be able to undertake the FOO by the second quarter next year and they have already tapped ATR Kim Eng Partners Capital as financial advisor. The firm still has to do the paperwork for the change in primary purpose and change in corporate name before they take over.
Known for providing mass housing projects in Cebu, Davao, Angeles, Lipa, Cavite, and Naga Cities, 8890 HDC is seeking to capitalize on the growth of the construction and real estate sectors by catering to the gargantuan market for affordable housing.
Aside from ongoing projects that will see 22,446 housing units with an estimated aggregate value of R15.6 billion upon completion, 8990 HDC has converted its existing R5 billion land bank into 9 new subdivision and medium-rise condominium projects with a completion timetable from 2013 to 2017.
These future developments are expected to bring in an additional 15,912 units, with an estimated sales value of R14.6 billion.
In addition, 12 new sites have already been purchased that will expand the company’s range of housing products to high-rise condominiums, time share properties, and condotel projects in major cities around the country.
These future developments would add a total of 34,576 units, with an estimated sales value of R19.3 billion.
8890 HHDC has ventured into the tourism business by offering time-share properties and pioneering the inclusion of cable wakeboard parks as an amenity in housing developments.
The developer currently operates two watersports facilities for both residents and guests, located within its Angeles and Davao projects.
The company is also expanding its investment in tourism by growing its timeshare business, which started with Azalea Residences in Baguio. More are set to rise in Boracay, Cebu, Davao, Angeles, and Manila.
Boasting a solid track record spanning over 22 years, 8990 HDC has built 51 subdivisions and has successfully turned over more than 41,000 housing units through its flagship and affiliates.
The firm expects revenues to surge 150 percent to P5 billion this year from P2 billion in 2011 and expand by 20 percent next year to P6 billion.
Including 2012, a combined four-year performance produced gross revenues of over P10.0 billion, net income of P1.5 billion, and net worth totaling P4.5 billion. 

Strategic Thinking

November 28, 2012, 5:41pm
In 1982, strategic management guru, Dr. Kenichi Ohmae wrote an article that is still very much relevant in business strategy today as it was at the time of its writing. What got me interested in sharing his thoughts with you are that his views on strategy development is not what most of us learned from Western approaches to business strategy crafting. His ideas on how to develop a business strategy is much closer to the ground and more practical than theoretical. It is also interesting because it is this time of the year when most of us are preparing our business plans for the coming year.
He wrote that all strategies require intuitive elements and “without it, strategies disintegrate into stereotypes.” In this article, I would like to share with you some insights I learned from his essay on the mind of a strategist.
Dr. Ohmae says that all sound strategies are grounded on three elements, what he calls the 3Rs: reality, ripeness and resources. Very simple truths and concepts that are quite easy to grasp. The 3Rs are the main constraints and considerations that someone must face in crafting a business strategy for his company.
Reality: All business strategies must be grounded on reality. That’s quite obvious. The three realities are customers, competition and the company’s field of competence. This is akin to what we normally call SWOT analysis when developing strategies.  The difference is that I think that Dr. Ohmae’s approach is more grounded in reality. Much like what we want to achieve when we conduct as SWOT analysis, we must always craft our startegies by first considering the customer in mind. But crafting a strategy based on only one dimension is a recipe for failure. All the reality dimensions must be considered as a interrelated whole. In Dr. Ohmae’s article, he cites a light bulb manufacturer who addresses product quality traits solely from the perspective of the customer. The company creates an everlasting light bulb. Surely, your shareholders will not be happy with your strategy because there will be no repeat buys but your customer will surely be happy. Reality is also situation-specific. What might be reality for one country may not be true in another country.
Ripeness: The timing of your strategy must be perfect. Too early or too late will spell disaster. There were many product strategies in business history that failed because the product was too early for its time or even in some cases too late to market. Take for example the introduction of the electric tricycles in the major cities by our Department of Energy. The product is conceptually and environmentally sound. It has been proven in Europe to be economical and a financially sound investment. Yet for the past few years, it has failed to take off even with government support. The problem lies in not having enough investments in the support structure such as battery recharging systems.
Resources: Dr. Ohmae says: “the third R constitutes such a obvious constraint that it is amazing that they should be ignored or neglected by strategists.” Take for example a retail business growth strategy based on company-owned door expansion. While this is a common strategy used by many retail chain stores and sounds pretty straightforward, it is an internal resource-heavy strategy. Resources here include human, financial, business processes, experience, and all others that are put to bear in carrying out the business. All these must be considered because any strategy will always use resources, some more than others.
There is really no magic formula in craft successful and winning strategies. In the final analysis, only by making yourself close to the battlefield and understanding your limitations as well as your strengths will get you closer to winning in the marketplace. Taking heed the mode of thnking proposed by Dr. Ohmae is certainly a big step forward.
The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX.

Domingo For ‘Managed’ Peso Appreciation

November 29, 2012, 6:59pm
Trade and Industry Secretary Gregory L. Domingo yesterday admitted that the peso could further strengthen to P39 against the US dollar but cautioned against “irrational” and “drastic” appreciation warning this would weaken the competitiveness of  Filipino exporters.
“The strengthening of the peso is difficult to stop because the government does not have enough resources to the control the volatility of the peso,” Domingo said. He, however, said that the Bangko Sentral ng Pilipinas has done a good job at managing the peso.
While a strong peso is a indication of confidence on the economy by foreign investors because it is inward inflow so it is a stamp of approval on the country but unfortunately it also weakens the competitive position of our exporters.
He said that up to P39 level, all sectors of the economy would still be able to handle their businesses but exporters will be put more under pressure depending how the government can manage the local currency appreciation.
“If in two to three years, we can manage the R39 level but if happens in a 6-month period then that would be very difficult,” he said.
Worse, breaching the R39 level would be more difficult to create further complications to foreign investors.
“As we become more, it would be more difficult to buy companies here, provide services and valuations become more expensive too so it will diminish our attractiveness as an investment destination,” he stressed.
Domingo noted that exporters were doing pretty well at R45 and even with the 15 percent appreciation of the peso.
At R42 to R41, companies have been willing to pay a premium to the Philippines because the strength is largely the people, who are productive, creative and technically proficient.
In fact, he said, the Philippine BPO is more expensive than India but because the Philippines has better productivity land efficiency, BPOs are willing to pay the premium. (BCM)
Domingo, however, stressed that such premium cannot be so much because the human resource advantage is also limited.
“A 15 percent depreciation is something that can be handled but a 20 percent or more would be difficult and would require major restructuring of the local industry,” he said.
Thus, a managed appreciation should be able to give time for local industries enough time to adjust. (BCM)

Villegas Sees 8% GDP Expansion

In 2013
November 29, 2012, 7:04pm
The Philippine economy is expected to grow 8.0 percent in 2013 firming up its position as one of three sweet spot areas in the Asia Pacific region.
   “We will grow 8% in GDP next year, mark it,” said the country’s “prophet of boom” and economist Dr. Bernardo Villegas at yesterday’s speech before the Asia Pacific Contact Center Association Leaders (APCCAL) Conference.
           Villegas stressed that “all forces” that make the country grow 7 percent this year would be further sustained next year like the implementation of more PPP projects, the election spending in May and the huge strong and young consumer base.
According to Villegas, every election spending always adds 2 percent increase in consumption growth in this country.
The country’s growth is primarily anchored on its huge domestic base. The Philippines just like Indonesia is not going to suffer the demographics winter problem that developed and other emerging economies are encountering.
Indonesia has a young and strong population of 250 million people while the Philippines has 95 million.
Comparatively, Singapore has an ageing population and has one of the lowest fertility rates among countries.
In 1975, he said, there were five babies to every woman in the Philippines but it has gone down to 2.5 and is likely to further decline to 2.1 in the next 20 years.
In addition, Villegas said the Philippines and Indonesia are shielded from the economic crisis in Europe and the sluggish growth of the US economy because Singapore and Hong Kong are having very difficult time because more than 200 percent of their GDP is export-dependent.
“It is no-brainer because Europe and US are having economic difficulties,” he stressed.
Another demographic problem is that of China, which manufacturing sector is going on a downtrend because of high attrition rate forcing companies to relocate to other locations in the region.  (BCM)

Dollar Bond Sale Raises $500M

Strong Demand From Local Investors
November 28, 2012, 5:57pm
The government raised $500 million from the sale of 2023 US dollar-denominated bonds to local investors yesterday, part of government efforts to develop new funding sources to reduce reliance on foreign debt and dampen the peso’s rapid rise.
Investor demand exceeded the issue size by more than three times, with total bids for dollar bonds on offer reaching $1.74 billion.
The onshore global bonds were sold at a coupon of 2.75 percent, the midpoint of Manila’s indicative price guidance of 2.5 percent to 3 percent.  
The Philippines, one of the most prolific global bond issuers among emerging economies, wants to cut its dependence on foreign borrowing by pursuing debt buybacks, swaps and innovative deals such as local-currency denominated debt to better manage its debt load and win its first investment grade rating.
The government will study the local market’s ability to absorb dollar debt before issuing more global bonds onshore, National Treasurer Rosalia de Leon said.
The government wants to create more demand locally for dollars and help the central bank manage the rapid appreciation of the peso, Asia’s best performing currency this year with gains of around 7 percent.
The government has also said it plans to borrow more from the local market and cut its overseas debt sales in 2013 to a range of $1.5 billion to $2 billion from an original program of $3 billion.
The government will source more dollars from the central bank’s record foreign reserves next year to pay off its foreign debt and will study the local market’s ability to absorb dollar debt before issuing more global bonds onshore, de Leon said.
According to Jonathan Ravelas, chief market strategist at BDO Unibank, 10-year dollar bonds are currently trading at 2.2% yield.
Since the onshore dollar bond has a 10.5-year maturity, “the yield should be around 2.6 or thereabouts,” he said.
The notes, maturing June 2023, will be priced Nov. 28 and will be issued at par Dec.4.
Land Bank of the Philippines is lead arranger with First Metro Investment, Deutsche Bank, Credit Suisse and HSBC joint issue managers.
The government bought at least $750 million this year from the central bank’s reserves to repay part of a $1.5 billion debt buy-back program early this month.
The other half of the debt buy-back was financed via its $750 million 10-year global peso note issue, which attracted bids nearly 8 times the issue size at a yield lower than initial guidance.  
Last month, Moody’s Investors Service upgraded the country’s ratings to one notch below investment grade, matching those of rivals Standard & Poor’s and Fitch ratings.  (Dow Jones)

GDP Growth Still Understated – Domingo

November 28, 2012, 5:51pm
Trade and Industry Secretary Gregory L. Domingo, who earlier projected of a 7 percent or above 2012 GDP growth this year, said the country’s GDP growth has been understated saying majority of the FDIs (foreign direct investments) that have been poured into new projects of foreign investors have not been fully captured.
Domingo said this as the country’s GDP continued to bring surprises with a 7.1 percent growth in the third quarter this year.
Domingo said that GDP should be at 8 percent for this year if only the entire FDI inflows have been captured. He noted that only $1.2 billion of FDIs out of $8 billion have been formally reported to the Bangko Sentral ng Pilipinas.
The BSP has a hard time getting the total FDI inflows following the relaxation of the country’s foreign exchange laws. Domingo even tried to track the FDIs of at least five major investors in the country and found out these have not been reported. The FDI report is based on the results of a BSP survey, which has only 20 percent respondents.
Because of this situation, he said, overall GDP growth this year, based on the growths in the past three quarters, is likely to end up at 6.5 percent. But next year, Domingo said, should be 7 percent and above already.
Likewise, Domingo said that the 7.1 percent third quarter GDP was understated because the baseline in the third and fourth quarters last year was really low because of the impact of the Japan disasters and the flooding in Thailand that affected the country’s automotive and electronics exports.
In addition, exports of electronics has been down because of the 95 percent drop in  exports in the automotive sector following the reclassification of this sector thus pulling the entire electronics exports to a negative 7 percent.
Without this reclassification, the overall electronics exports would still be in the negative but at very minimal decline.
“But the third and fourth quarters this year have very strong growth trajectory,” he said.
He cited the influx of major manufacturing projects with ongoing plant construction as the main factor that would ensure sustained growth in the next several years.
Developers of industrial parks have informed Domingo of various plants construction and strong take up by investors.
With these new investments, he expect that electronics exports would be strong in 2013 to 2014 even with a weak global electronics market because the local industry has already expanded its market reach.

Antonio Named SEA’s 2012 Real Estate Personality Of The Year

November 29, 2012, 6:41pm
Century Properties Group founder and chairman Jose E.B. Antonio was named the 2012 Real Estate Personality of the Year by Ensign Media during its prestigious Southeast Asia (SEA) Property Awards in Singapore.
Antonio was given the award for his work as “a true industry pioneer”; for “transforming the Manila skyline with quality developments”; and for “drawing the global spotlight not only to the Philippines but to the entire Southeast Asian region with notable brand collaborations.”
He is the second recipient of the said award after Ho Kwon Ping, Executive Chairman of the Banyan Tree Holdings, won it in 2011.
The Century Properties founder also received the Highly Commended citations bestowed by the awards to Trump Tower at Century City for the Best Residential Development-Philippines category, and Century Properties Group for the Best Developer-Philippines category.
A firm believer in the growth potential of the Philippines, Antonio founded Century Properties 26 years ago amidst one of the country’s most turbulent periods in history—the People Power Revolution.
Five economic cycles and two and a half decades later, Century has emerged as a leader in innovative real estate concepts—from creating the first fully-fitted and fully-furnished condominiums in the Philippines to introducing interior design themes into residential spaces.
Under Antonio’s leadership, Century also announced unprecedented collaborations with global brands in real estate and interior design, including Versace Home for The Milano Residences, MissoniHome for Acqua Livingstone, Trump for Trump Tower at Century City, yoo inspired by Starck with John Hitchcox and Philippe Starck for Acqua Iguazu and Ms. Paris Hilton for the Azure Urban Resort Residences Beach Club.
“I believe that Century’s remarkable competitive strength lies in the passion of its people. This has translated into a proven heritage of innovation and product differentiation. We are committed to not just introduce firsts but also deliver quality projects that help transform Metro Manila as a world-class and cosmopolitan city,” Antonio said.
Jules Kay, managing editor of Property Report Southeast Asia magazine, said that, “despite such high-profile developments, as a seasoned property professional (Antonio) remains focused on quality… He is a true industry pioneer. He and his sons have been slowly transforming the Manila skyline, drawing a global spotlight not only on the Philippines, but also the Southeast Asian region.” To learn more about our Projects, contact us at +639173236123. (JAL)

BSP Approves Contract-To-Sell Reference Standards For Housing Finance

November 29, 2012, 7:06pm
The central bank’s Monetary Board has approved the contract-to-sell (CTS) reference standards for housing finance, a move it called a milestone.
 In a statement, the Bangko Sentral ng Pilipinas (BSP) said the prudential measure is a “defining minimum standard” for banks to comply with which ultimately, will strengthen credit underwriting practices for real estate activities.
 “The BSP did not move to formal prescriptive regulations at this stage since market players have defined the guidelines themselves to achieve balance between development and stability objectives,” said the BSP. These guidelines specifically streamline market practice since no common standards had been recognized to-date.
 The BSP explained that in a CTS transaction, properties are sold to buyers on an installment basis by liquidating real estate developers’ holding of CTS receivables by selling the receivables to banks. The CTS receivables and its sale to banks are referred to as CTS financing. “(This) effectively gives developers a way to get immediate funding out of their receivables,” said the BSP.
 BSP Deputy Governor Nestor A. Espenilla Jr. said the significance of the CTS guidelines is that it will give the BSP a good idea of what transactions are being commonly practiced in house financing. “(This) will guide the industry to maintain high quality standards in housing finance (and) also guide the BSP in assessing the quality of actual practices,” said Espenilla.
 The BSP said banks should either comply or explain any deviation of actual market practices from such standard. “Banks are expected to adopt stronger practices than the standard depending on their customer risk profile,” according to the statement.
 The CTS is a proposal developed by industry associations, mainly the Bankers Association of the Philippines, the Chamber of Thrift Banks and the Rural Bankers Association of the Philippines with the BSP.
 Last August, the BSP approved new policy guidelines in monitoring real estate financing transactions. “The same policy initiative is expected to more closely link real estate exposures to banks’ capital levels,” said the BSP.
 At the moment, the BSP is reviewing prudential limits, for example in the amount of credit banks allot to real estate loans.
 The CTS is a complementary rule since it enhances monitoring of risks from CTS financing. The guidelines also give close scrutiny to the eligibility of homebuyers who can avail of CTS financing.

Palace gives go ahead for new terminal

Thursday, November 29, 2012
PRESIDENT Benigno Aquino III and the National Economic and Development Authority (Neda) board approved the P8-billion expansion of the Mactan-Cebu International Airport (MCIA) terminal in a meeting at Malacañang yesterday.
“Cebu finally gets its new airport passenger terminal,” read the text message of MCIA Authority General Manager Nigel Paul Villarete, minutes after Aquino affixed his approval signature.
Villarete said the Neda board gave the go-signal for the project’s implementation.
Aquino is the chairperson of the Neda board, which is composed of different government
agencies, including the Department of Finance.
At the meeting were Department of Transportation and Communication officials, such as Secretary Joseph Emilio Aguinaldo Abaya, Undersecretary Rene Limcaoco and Assistant Secretary Jimmy Feliciano.
Villarete said he was the one who answered questions from Neda board members regarding MCIA’s operations and on why there was a need for a new terminal.
Interested bidders
Once the project is completed, operations and management of MCIA will fall under the Public-Private Partnership program of the Aquino administration.
The airport terminal expansion has attracted interest from big business
establishments, such as the Ayala Corp. and Aboitiz Equity Ventures Inc., which signed a joint-venture agreement to bid for the project.
The existing terminal was built in 1995 and is relatively dilapidated, compared to the newer terminals in the country.
Villarete earlier said the terminal was designed for 4.5 million passengers annually.
And with traffic volume registering 6.2 million passengers in 2011 and expected to break the seven-million mark this year, the airport is congested.

8 Badjao families get keys to new homes

Thursday, November 29, 2012
AFTER living in shanties for years, at least 140 Badjao families in Cebu City now have a chance to own and live in a decent home.
In Sitio Puntod, Alaska in Barangay Mambaling, the Ramon Aboitiz Foundation Inc. (Rafi) and its partners are constructing at least 35 quad houses.
A quad house is a two-story structure that can accommodate up to four Badjao families and cost P480,000 to build. The Badjaos will get to own the houses through a rent-to-own scheme.
Yesterday, eight Badjao families were given keys to their new homes after two quad houses were turned over to them by Rafi and the delegation from Harlemermeer City, Netherlands, headed by their mayor Theo Weterings.
Harlemermeer, one of Cebu City’s sister cities, funded the construction of the two quad houses. Officials from Harlemermeer are in the city for a one-week working visit.
“Nalipay gyud mi ani kay nahatagan mi og balay. Nagpasalamat gyud mi. Gwapo kayo (We are thankful that this house was given to us. It’s very nice),” said Karama Asamsa, one of the beneficiaries.
Asamsa, 65, is a fisherman and has been living in the city nearly all his life. He came to Cebu City from Zamboanga City with his family to find a better job.
No return
“Daghan mang manulis kung managat mi didto. Mao nang dinhi na lang mi. Di na mi mobalik didto (We could fish there but there are a lot of robbers, that’s why we came here. We don’t plan to go back),” he said.
Of the 35 quad houses to be built, eight more units are expected to be finished within the year, 10 units by 2013 and 15 units by 2014.
Dominica Chua, chief operation officer of Rafi, said the socialized housing program for the Badjaos is part of their Badjao Integrated Area Development Project, which seeks to empower the Badjao community in the city.
Anthony Fuentes of Rafi said the beneficiaries have the option to pay off the house in 20, 25 or 35 years.
For those who intend to pay off their units in 35 years, Fuentes said the monthly amortization would be P950. The monthly amortization is P650 and P750 for a 20-year and 25-year payment period, respectively.
The amount will be used to maintain the units and to deliver basic services in the area.
Fuentes believes the beneficiaries will be able to pay the monthly rent because they have jobs. Most of them are construction workers, he said.
He added that the beneficiaries are also being tapped by Rafi in the construction of the quad houses.
The quad houses for the Badjaos stand on a 5,000-square-meter property owned by the City Government.

Prohomes affiliates with Johndorf

Monday, November 19, 2012
ESTABLISHED in 2004, Prohomes Development, Inc. has grown to become one of the leading affordable housing developers in Cebu. The company now has eight projects: Genesis Homes, St. Bernadette Homes, Corinthian’s Subdivision, St. Dominic’s Place, Earnestine Homes, St. Anne’s Lane, Fleur de Ville Subdivision and Hanniyah Homes.
Prohomes is now affiliated with Johndorf Ventures Corp. with the acquisition by the Lim family of all the stocks of Prohomes’ minority stockholders. Taking full control of the company is its newly-elected president and CEO Richard Lim and a strong core management team.
“Johndorf and Prohomes will together evolve and become a strong driving force in the industry,” the company said in a press statement.
Johndrof Venture’s more than 20 years of experience in providing a multiple portfolio of developments-condominiums, townhouses, houses and lots-will provide the company heritage and credibility, the statement said.
“Johndorf will help steer the vision of Prohomes to grow in the affordable housing segment as it will continue to focus on the house and lot category by ensuring high quality products through strict standards of workmanship and customer satisfaction through enhanced customer service,” the company said.
Its latest project, Hanniyah Homes, will make available 2,000 townhouse units to the market. For more information about our projects, contact us at +639173236123. (PR)

New real estate firm to spend P450M for project

Wednesday, November 21, 2012
A NEW player in the real estate industry is going to spend P450 million for the first phase of its two-tower mid-rise building in Banawa.
The amount will also finance development of amenities including swimming pools, a sky garden, a day care center, and a fitness and family entertainment center, according to Sharon Ann Ong, Worldwide Central Properties Inc. (WCPI) vice president for marketing and sales.
WCPI is the real estate arm and a sister company of Worldwide Steel Group and Worldwide Hope Depot, founded just this year.
WCPI president Kent Ong said the real estate company is meant to complement the family’s existing businesses. The family has been in the construction industry for 36 years.
“The mission now is to build communities,” Kent said in a press conference yesterday.
“We are taking these further, not just in providing construction materials but also building homes for families.”
Sharon said the company’s entry into real estate was spurred by Cebu’s booming economy, driven by the continued growth in the business processing industry and the strong inflows of overseas remittances.
“We believe growth in the industry will continue in the coming years, given the good and stable economic environment we have,” she said.
Their flagship project, named Sundance Residences, sits on a 3,200-square meter property in Banawa. It is a 12-storey medium-rise building whose first tower will initially have 208 units. The Phase one of the construction is scheduled in the second quarter in 2013. Completion and delivery of units is scheduled in 2015.
Sharon said the residential building will cater to the middle to upper-mid market, specifically start-up families living near Capitol, Guadalupe and Banawa.
She said that in Cebu, Guadalupe is one of the most populated areas with six percent or 50,000 of Cebu’s population living there. “We felt that it was high time to have a medium-rise building in that area given also the huge housing backlog,” Sharon said.
Sundance Residences will have studio, one-bedroom and two-bedroom units. Unit prices start at P1.8 million.
Optimistic about the continued growth in the real estate industry, Kent announced that the company is also exploring opportunities in building a horizontal housing development in a two-hectare property in Mactan.
He said the project, which is still on the planning stage, will have 300 units and will be constructed in phases by the second half of 2013.
WCPI has tapped tarchitect Antonio Trillanes Jr. to head the design team and Kenneth Cobonpue to handle the interior design for Sundance Residences. For more info, contact us at +63917.3236123.

BOI plans 3-year investment priorities plan

Thursday, November 22, 2012
AFTER participants of a roadshow to promote the country’s investment priorities plan for 2012 cited how late in the year this was disseminated to them, the Board of Investments admitted they had plans to have an approved IPP for a three-year period.
However, BOI Director Bobby Fondevilla said this will take time as it requires a change in the law and participation from the country’s lawmakers.
During the open forum, economist Fernando Fajardo said businesses take time to plan for projects, taking months or a year to complete studies before deciding to go on with it. He said the IPP could end up changed before any project is implemented and then they would be unable to avail of the incentives provided for in the IPP.
Fondevilla assured that until a new IPP is approved, the previous IPP will still be in place. He explained that they did their best to get the 2012 IPP put by March but it got held up by reviewers in Malacañang who wanted to make sure the industries in the list were in line with the country’s goals. It was approved last June.
Bases for the IPP are the President’s social contract with the people of the Philippines, the Philippine Development Plan 2011-2016, the SME Development Plan, National Science and Technology Plan, the framework strategy for climate change and the 2011 state of the nation address.
Out of four categories, it is the preferred activities that usually sees more change.
For this year, the IPP provides incentives for projects in 13 industries--agriculture, agri-business and fisheries; creative industries or knowledge-based services; shipbuilding; mass housing; iron and steel; energy; infrastructure; research and development; green projects; motor vehicles; strategic projects; hospital and medical services; and disaster prevention, mitigation and recovery projects.
Out of the preferred activities list, iron and steel and hospital and medical services were the new additions to this year’s IPP.
Agriculture was introduced in last year’s IPP in support of the Aquino administration’s thrust to improve productivity, reduce importation and become self-sufficient in food.
For creative industries and knowledge-based services, Fondevilla stressed that the incentives are available for projects producing original content. These include business process outsourcing, IT and IT-enabled services. While film and performing arts were included in previous years, he said it was removed because there have been no applications.
Shipbuilding has been retained from the 2011 IPP as it is seen to have a great potential, trailing China, Japan and South Korea as a production base of shipbuilding.
Fondevilla identified mass housing projects as having the bulk of the BOI’s performance. He said the country needs to develop more low-cost housing. An addition to sub-category is for the manufacture of modular housing components. He said they noted that while real estate has been doing well in the country, materials being used in construction are imported.
Existing laws compel the BOI to include nine industries. Under the mandatory list are projects in industrial tree plantation; exploration, mining, quarrying and processing of minerals; publication and printing of books; refining, storage, marketing and distribution of petroleum products for new entrants; ecological waste management; clean water projects; rehabilitation, self-development and self-reliance of persons with disability, renewable energy and tourism.
All export activities and a special list for the ARMM region complete the four categories.
Fondevilla said the listing is general and that businesses are welcome to make proposals and visit the BOI to find out if they are eligible for incentives.
BOI governor Geronimo Sta. Ana, during the welcome remarks, added that companies are being encouraged to partner with state universities and colleges for research and development.