Iloilo and Bacolod emerge as top Tier 3 sites for outsourcing firms

WHILE India and the Philippines remain the top countries for offshoring, an A.T. Kearney study revealed companies are looking to locating in Tier-3 sites outside these nations’ capitals.

“While India and the Philippines are still top of mind when it comes to offshoring, the hunt for new talent is now taking companies beyond these countries’ capitals and major cites to Tier-3 locations, such as Surat, Nagpur, and Lucknow in India; and Bacolod and Iloilo City in the Philippines,” A.T. Kearney’s New York partner Arjun Sethi was quoted in a news statement as saying.

Sethi based his statement on the recently released 2016 Global Services Location Index (GSLI) by the management consulting firm. The report shows India and the Philippines unchanged in the index from the 2014 ranking at No. 1 and No. 7, respectively.

A.T. Kearney ranks countries to arrive at its GSLI according to financial attractiveness (FA), people skills and availability (PS&A) and business environment (BE).

India’s FA score of 3.22, while lower than Indonesia—also unchanged at No. 5, is still higher than the Philippines’s 3.17 score. The Philippines’s PS&A score of 1.43, while higher than Malaysia’s 1.42 score, pales in comparison to India’s 2.55 PS&A score. Malaysia and China, to note, also remained unchanged from their 2014 ranking of No. 2 and No. 3, respectively.

But the Philippines’s BE score of 1.29 beats India’s 1.19. “Since the 2014 GSLI, the Philippines has registered gains in its scores in infrastructure, environment and tax and regulatory costs,” the report, titled “On the Eve of Disruption,” said.

The report added that companies are looking at Tier-3 cities in the Philippines as location for offshoring because of the advantages these sites offer. “One advantage of Tier- 3 cities is the relative affordability of real estate. Another advantage is the relative availability of labor, its lower cost and lower attrition rates,” the report said.

Now on its seventh edition since 2004, the 2016 GSLI “helps companies make key location decisions for offshoring and industry development projects with objective guidance,” A.T. Kearney said.

The 55 countries in the 2016 index—four new countries have been added this year—are selected based on corporate input, current remote services activity, and government initiatives to promote the sector, the consulting firm added.

Source: By Daphne J. Magturo / http://www.bworldonline.com/content.php?section=Economy&title=bpos-in-smaller-cities-keep-phl-competitive—-a.t.-kearney&id=121530

No real estate bubble – BSP

MANILA, Philippines - Initial results of stress tests conducted by banks validated the assessment made by the Bangko Sentral ng Pilipinas (BSP) that there are no risks from the real estate market.

BSP Deputy Governor Diwa Guinigundo said initial results of the real estate stress tests conducted by banks showed the capital adequacy ratio (CAR) of banks would remain above the central bank requirement even if 25 percent of their real estate loan portfolio turns sour.

“At this point we don’t see any signs of stress in the real estate sector,” Guinigundo said.

The central bank has asked banks to submit data on their real estate portfolio to include exposure in socialized housing as well as debt incurred through the issuance of bonds to finance real estate activities.

“We now have a more comprehensive definition of the exposure to real estate. It’s more dependable,” he said.

Based on the new definition of the exposure of banks to real estate, Guinigundo said stress tests conducted by big banks showed that their CAR would still be above the 10 percent requirement set by the BSP and the eight percent threshold set under the Bank for International Standards (BIS).

“Even if they factored in a 25 percent souring of the loans on real estate, they are still above the 10 percent regulatory capital that we imposed on the banks,” Guinigundo said.

Aside from the BIS methodology, he said the BSP also used the International Monetary Fund (IMF) identification of asset bubbles.

“Those two tests will show that we are far from the so-called danger level,” he added.

The CAR of big banks stood at 15.48 percent on a solo basis and 16.42 percent on a consolidated basis as of end-June last year reflecting their continuous efforts to maintain adequate capital buffer against unexpected losses that may arise during times of stress.

The BSP stepped up its watch over the real estate sector as early as 2012 by ordering banks to disclose more comprehensive reports on their exposures to property industry.

The pre-emptive macroprudential policy measure approved by the BSP required stress tests for banks to determine if their capital will be enough to absorb credit risk that may arise from their exposure to the property sector.

Banks’ exposure to real estate jumped 21.8 percent to P861.22 billion in end-November from P708.88 billion in end-September last year. The sector accounted for 17.5 percent of banks’ total loan portfolio of P4.91 trillion as of end-November.

The BSP has set the cap on real estate loans at 20 percent of the bank’s total loan portfolio.

Guinigundo added that real estate developers are now more prudent after learning their lessons during the Asian financial crisis in 1997.

“We can also say that we are in touch with various real estate developers, the bigger ones, and it is very comforting to know that our developers have become more prudent, more discreet with respect to their expansion plans,” he said.

Source: By Lawrence Agcaoili (The Philippine Star) / http://www.philstar.com/business/2016/01/12/1541553/no-real-estate-bubble-bsp?nomobile=1

FAILURES Makes You Closer To Your Success by: Realtor Samuel Lao

Good Morning Everyone.

As saying said, experience is the Best Teacher. Don't be afraid to fail, it is part of the ingredients to SUCCESS.

Because if you don't Fail, you never try at all.

I know someone who fails several times, in fact he don't have real estate sales in two years. But this guy never surrender. He continue to move on, bounce back harder, and bring to him the two years of learning & experiences. On his 3rd year he made several million sales, and one of those is 17million worth house & lot.

Imagine if he quit, he never know Success is just there waiting for him.


YOU can be like him a slow start, but never stop, because your just closer now to the pot of gold.

What is important for every failure, there is a valuable lesson learn. Every experiences is unique, learn from it. And improve your approach.

Remember Thomas Edison, fails several time before he perfected the formula of the lightbulb.

But if people ask Mr Edison, he only said, I never failed, it just cause me several revision on my formula to make it perfect.

Again, FAILURES is just part of your steps, or ingredients for SUCCESS.

Just like practicing to ride a bicycle. It will take you several FAILURES until you will get it perfect your balance, timing, running the bicycles.

Again, in your first practice riding bike, you failed, and you quit. I'm sure until now you don't know how to ride a bicycle.

Because you cemented your failure.

Again failure is a stepping stone to rise up and reach your SUCCESS.

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To your SUCCESS and PROSPERITY. Make a change this year, consider real estate business.

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Dr. Samuel O Lao, is a Professional Real Estate Broker, President & CEO of RealtyOPTiONS Marketing & Consultancy Inc., Graduate in Real Estate Finance & Investment at National University of Ingapore (NUS), Past President of Cebu Real Estate Board Inc (CEREB), & National Director of Philippines Association of Real Estate Board Inc. (PAREB).

Philippine year in review 2015

Strong domestic demand and increased government spending helped sustain high levels of economic expansion in the Philippines throughout 2015, though a slight slowdown was observed late in the year as demand from the country’s main trading partners eased.

While yearend data have yet to be released, estimates from the Asian Development Bank (ADB) in December project gross domestic product (GDP) growth of 5.9% — short of the 6.4% forecast earlier in the year — as a result of declining merchandise exports, which fell by 6.9% year on year in the first three quarters to $43.7 billion.

Despite the modest slowdown, the Philippine government remains confident that end-of-year spending will help boost GDP growth to 6%-6.5% by the close of 2015.

The months ahead are expected to usher in strong economic expansion, with the ADB projecting growth of more than 6% in 2016 as the government continues to increase public spending. Higher demand from India and other Southeast Asian economies is expected to offset the effects of this year’s weaker exports.

INFLATION SUBDUED, EMPLOYMENT UP
While still modest, inflation gained pace late in the year, rising to 1.1% in November, up from 0.4% in October. However, rates remain within the Central Bank of the Philippines’ target band of 0.4% to 1.2%, and well below the 3.7% registered in November 2014.

According to the National Economic and Development Authority, inflation is being driven by rising food and non-food prices stemming from higher local demand and the lingering effects of typhoon Lando, which struck the country’s shores in October.

Core inflation — which excludes energy and unprocessed food costs — edged up in the last quarter of 2015, reaching 1.8% in November, its highest level since July, but still below the 2% target set by monetary authorities.

In a research note issued in early December, Barclays predicted inflation would rise to 2.4% in 2016, due in part to a modest anticipated increase in fuel costs and the potential impact of the El Niño weather pattern on agricultural prices.

Nonetheless, the ongoing strength of the economy helped stem unemployment in 2015, with figures released by the Philippine Statistics Authority in early December reflecting a 5.6% unemployment rate as of October, down from 6.5% in July 2015.

POSITIVE RATINGS OUTLOOK
The steady growth and stability of the economy prompted ratings agency Fitch to revise its outlook for the country from stable to positive in late September. The agency also affirmed the Philippines’ long-term foreign- and local-currency issuer default ratings at “BBB-” and “BBB”, respectively, maintaining the country’s investment-grade standing.

Moody’s was also optimistic about the Philippines’ economic prospects for 2016, reaffirming the country’s “Baa2” bond rating with a stable outlook in mid-October. According to the agency, the rating reflects the “resilience of [the Philippine] economy to the current headwinds buffeting neighboring countries” and expectations that the positive economic and fiscal trends will continue for the next one to two years.

BUDGET DEFICIT WIDENS
The year’s economic expansion was fueled in part by higher levels of government spending, which led to a deeper budget deficit in the latter half of the year. On the back of more than P1.82 trillion of disbursements in the first 10 months of the year, the year-to-date budget shortfall rose to P52.6 billion in October, up 56% year on year.

While outlays were higher than anticipated, government revenues were also up, with receipts rising by 12% year on year to P1.77 trillion between January and October.

In past years the government had come under fire for the relatively slow pace of spending, which often fell short of expenditure targets and delayed investment and capital projects. The late-term acceleration in public spending could help clear some of the project backlog and further stimulate the economy.

Economic activity in the coming year is also set to be fueled by presidential elections in May 2016. A recent report by Standard Chartered Bank predicted the election campaign would spur an influx of investment in the manufacturing, government services, private services, transport, communications and storage sectors, in particular.

According to the bank, the ramp up in public spending, alongside higher household consumption levels, could add between 0.1 and 0.3 percentage points to GDP in 2016.

Source: Oxford Business Group/ January 7, 2016/ http://www.bworldonline.com/content.php?section=Economy&title=philippine-year-in-review-2015&id=121092

Residential, office markets expected to continue stellar performance in ’16

WHILE 2016 has just begun, preparations are now being made to hail the Year of the Fire Monkey with a bang, when the Chinese celebrate their lunar New Year on February 8.

The whole nation is thrilled on what lies ahead this year, particularly on the political front, since this will mark the denouement of the Aquino administration and a new leadership will take over Malacañang Palace for the next six years.

With the national polls heating up, however, the economy and its growth-driving industries, especially real estate, are expected to weather the political noise.

Philippine economic development is seen in the expanding property sector as housing projects, commercial centers, workplace buildings, hotel and gaming facilities, as well as economic zones are being built one after the other not only in Metro Manila area, but also in other parts of the country.

This trend is seen to continue across all real-estate industry segments this year and beyond, most notably in the residential and office sectors.

Residential market

THE perennial housing backlog keeps on pushing the residential market’s growth, as the National Economic and Development Authority estimated the need of Filipinos for a “decent roof” is pegged at around 800,000 units per annum.

Since close to 400,000 households or almost half can still afford to buy dwelling units annually, this segment of the real estate remains the most competitive and profitable at present.

The towering heights of opportunity for both the developers and buyers still abound in vertical projects or condominiums.

In fact, the condo market accounts for the biggest share of all licenses to sell at 27 percent, according to the nine-year average of Housing and Land Use Regulatory Board (HLURB) data.

Leading the pack of developers is the SM Group, which intends to sell an annual average of 20,000 units starting 2016.

This initiative solidifies the Sy family’s market share in the condo space, said Pinnacle Real Estate Consulting Services Inc. Director for Research and Consulting Jojo Salas.

In their recent Market Insight Report, he also noted DMCI Group’s announcement that it would launch nine projects this year, with 14,000 units and estimated sales value of P50 billion.

The Consunjis also intend to generate recurring income when it launches its 36-story office project along Pasong Tamo in Makati City.

This will offer more than 40,000 square meters (sq m) of leasable area, subject to approval of permits and licenses.

Salas said the Ayala Land Group and Ortigas and Co. have packaged their housing projects with mixed-use and township developments.

Other developers are also ramping up the kick-off and completion of their projects to meet the predicted demand.

Lamudi Philippines reported that Century Property is on track to finish the construction of its luxury residential condo—the Trump Tower—by December.

Once completed, this 56-story tower in Makati City, composed of over 250 units, is the first Trump-branded condo not only in the country, but in Southeast Asia.

The property web site also revealed the scheduled opening this year of high-end 67-floor tower Shang Salcedo Place, which houses 749 units and top-class amenities.

Apart from condominiums, other residential types also offer good business and investment potentials for both the players and end-users.

Like vertical housing projects, economic housing comprises 27 percent of all licenses to sell, based on HLURB figures.

Meanwhile, socialized dwellings, as well as open-market subdivisions and townhouses account for 24 percent and 22 percent, respectively.

Pinnacle’s report shows the Ayala Group has focused on the economic housing by strengthening its projects under the Amaia brand.

It’s timely given the recent hike of the loan limit for this type of residence from P1.25 million to P1.7 million, as approved by the Housing and Urban Development Coordinating Council.

As for the socialized market, Bella Vista brand has been playing in this category, the study added.

Office segment

AS the economy surges, there’s still more room for expansion in the office sector of the real-estate industry.

Jones Lang Lasalle (JLL) Managing Director for Singapore and Southeast Asia Chris Fossick said new office supply is expected to be high in Manila in 2016 at 870,000 sq m, growing by 10 percent to 20 percent.

He said that most of the new buildings are in the central business districts (CBDs) of Makati and Bonifacio Global City (BGC) in Taguig, where there has been a shortage.

This year’s supply until 2018, however, is close to the five-year historical take-up from 2011 to 2015.

With the projected spike in the office-space inventory, a moderate hike in rental rates is likewise projected—this time at 4 percent, as 18 percent of the new supply in 2016 has been already precommitted.

This trend could still be attributed to the ever-expanding business-process outsourcing (BPO) industry, as some locators are moving up the value-chain and require more centrally located premises, Fossick said.

Based on data from the Philippine Statistics Authority, the office segment accounts for 29.4 percent of the real-estate demand in the country, largely driven by BPO at 11.3 percent.

Industry sources see the outsourcing sector to generate $25 billion in total revenues by end of the year.

Given the top figure, the BPO industry is projected to soon overtake dollar remittances by overseas Filipino workers, most likely in two years, according to an HSBC economist in a recent briefing. Job-wise, it is targeted to hit 1.3 million full-time employees in 2016, which translates to 5.2-million-sq-m office requirement.

Hence, the industry is now gearing up the “Next 10 Cities,” such as Baguio, Davao, Dumaguete, Iloilo, Lipa, Metro Bulacan (Baliuag, Calumpit, Malolos City, Marilao and Meycauayan City), Metro Cavite (Bacoor City, Dasmariñas City and Imus City), Metro Laguna (Calamba City, Los Baños and Sta. Rosa City), Metro Naga (Naga City and Pili), and Metro Rizal (Antipolo City, Cainta and Taytay).

Investment opportunities

AT the start of the new year, many of those planning to move to a new home or considering buying a property must be wondering what 2016 could bring to them.

In view of this, Lamudi Philippines takes a look at what are potentially good real-estate investment deals in the market today.

For one, Strata-titled offices are a good take, according to the real-estate portal.

Contrary to the BPO office towers constructed and rented out by property developers to outsourcing firms, they can be purchased by individual investors and buyers to lease to companies.

For those who want to diversify their investment portfolios, this property type makes a good business sense since there is a lack of supply of office space in the metropolis, particularly in major CBDs, placing an upward pressure on rental fees.

What’s more, the decreasing land-bank options in Makati City, BGC and Ortigas Center are also raising capital values of office buildings, based on Colliers International’s third quarter 2015 report.

Some of the strata-titled developments now available in the market are Alveo Financial Center along Ayala Avenue, which has 363 units and sells on average P223,000 per sq m; The Stiles in Circuit Makati (also of Alveo Land), with 283 units for P198,000 per sq m; Century Spire in Century City (Century Properties), with 283 units for P203,000 per sq m; Capital House in BGC (Avida Land), with 222 units for P142,000 per sq m; One World Place in BGC (Dai-ichi Properties), with 283 units for P136,000 per sq m; and Parkway Corporate Center in Alabang (Filinvest Land), with 390 units for P168,000 per sq m.

Apartments and townhouses are also worth investing in as they are two of the most searched property types by Filipinos at present.

Location-wise, suburban areas like Quezon City, Parañaque and Las Piñas are a top choice among the would-be investors.

Such properties are very in demand among renters, most especially for starting families, since they provide bigger spaces than condos yet they are cheaper than standalone houses.

A three-bedroom door apartment in Parañaque, for instance, averagely costs P3.5 million to P4 million, or charges P18,000 to P25,000 as monthly rent.

Because land values in Metro Manila are costly and constantly rising, real-estate developers are setting their sights outside for their next big-ticket township projects.

Among these developments include the Azure North in San Fernando, Pampanga, where Century Properties plans to duplicate the success of the same project in Parañaque; and Ayala Land’s Alviera in Porac, Pampanga; and Vermosa in Laguna and Cavite.

These developers are banking on their previous success to push these projects forward and all look to perform well in 2016, according to Lamudi Philippines.

Residential lots in subdivisions are also highly sought after given their rapid value appreciation.

Property values in the 62-hectare township called Alabang West of Global-Estate Resorts Inc., to wit, increased from P47,000 per sq m to P56,000 per sq m, or 19 percent  in the 11 months since its launch.

Around 80 percent of the 788 residential lots in this project have been already taken up.

While there is a bit slide in the mid-condo market due to massive supply, high-end vertical housing developments, especially larger ones, are projected to perform well both in capital appreciation and rental rates.

Colliers said that vacancy level is lowest for upscale condos in Makati City, which is expected at 5 percent to the third quarter of 2016.

This could be attributed to Metro Manila’s leasing market, driven primarily by expatriates and the BPO sector.

JLL reported that luxury condo rents in the metropolis keep on growing, though modestly, due to strong demand also from expatriate employees of multinational corporations.

Source: by Roderick Abad – January 4, 2016 http://www.businessmirror.com.ph/residential-office-markets-expected-to-continue-stellar-performance-in-16/