Arnel Paciano Casanova: From a slum dweller to a city builder

In Photo: Lawyer Arnel Paciano Casanova, president and CEO of Bases Conversion and Development Authority, speaks before participants of an investment conference in 2014.

By Leony R. Garcia

WHO would ever think that a slum dweller, a penniless student who migrated to the city to pursue the elusive dream of education, would one day become a city builder?

This is the story of Arnel Paciano Casanova, currently the president and CEO of the Bases Conversion and Development Authority (BCDA), a government development corporation mandated to transform former military lands into alternative productive civilian enclaves. 

Casanova grew up in a poor family in Padre Garcia, Batangas province. His father, a farmer, and her mother, a seamstress, had a hard time raising him and his seven siblings. Thus, at a young age, there was this thirst for learning as a way out of hardship for the family and a way to be successful in life someday.

Thirst for learning

“In my town, a college degree was literally an impossible dream.  Yet, my thirst for learning was insatiable.  Armed with P100 in my pocket, I went to Manila and took the University of the Philippines [UP] College Admission Test, and passed,” Casanova reminisced.  

So while studying in UP, the young Casanova lived with relatives, who were slum dwellers in Fort Bonifacio. He then became one of those unknown city migrants who had to scrounge for food, shelter and education while sleeping on the floor, enduring leaking roofs and flooded road.  “Yet, I found grace in humanity in the slums.  Neighbors know each other. I never ran out of people to play street basketball with at any given time of the day or night.  We shared food, no matter how meager it could be. I found my true friends in the midst of  squalor,” he continued.

Peace negotiator at 25

Fast forward. Casanova was 25, just a year out of the UP Law School. He was a young lawyer working as part of the government peace panel.

“Fortunately, we were able to successfully negotiate peace with former military rebels.  For this, I was awarded the prestigious Philippine Legion of Honor Medal [1997], one of the youngest recipients of such award under the presidency of President Fidel Ramos,” he said.

According to Casanova, other accomplishments of the peace panel then included the recovery of weapons, firearms, explosives and ammunitions of the army rebels—Reform the Armed Forces Movement, Soldiers of the Filipino People, Young Officers Union (RAM-SFP-YOU).

As a lawyer, he also helped draft the General Peace Agreement between the Philippine government and the RAM-SFP-YOU and the Marcos loyalist forces and the Amnesty Proclamation. And in 2003, he testified on military corruption before the Feliciano Commission, a body created to investigate the Oakwood Mutiny. This resulted in the recovery of government property, valued at approximately $200 million, which was misappropriated by a group of retired and active generals of the military.

BCDA chief

And now, 20 years after, Casanova finds himself approaching his fifth year as BCDA president and CEO.

And his latest accomplishments:  “Through sound partnerships forged with the private sector, prudent asset management and revenue collection, we were able to contribute over P27 billion for the account of the modernization of the Armed Forces.  Among our projects which greatly benefited the nation are the Bonifacio Global City, the Subic-Clark-Tarlac Expressway and soon, the country’s first, smart, disaster-resilient metropolis, the Clark Green City.”

Other advocacies

Currently, he is a faculty member of the Ateneo School of Government and UP College of Law teaching social entrepreneurship and law, while mentoring other social enterprises involved in health care, poverty alleviation, environment, housing and others.

He is also into microfinancing and is part of CARD Inc., the biggest microfinance institution in the Philippines. He has founded AvantChange, a social enterprise organized in Cambridge that aims to promote social entrepreneurship in Asia. Further, he supports the Tsinelas Leadership of the late Secretary Jesse Robredo, and is among the pioneers of Kaya Natin! (We Can!), a social movement for good governance and ethical leadership.

A staunch supporter of the youth, Casanova believes in the promise and the vast possibilities that they can do.  “For me they are equally good and hardworking. My story is not unique, and we have many youths who have moved mountains through hard work and selflessness.  The only difference with today’s youth is the lack of reverence for the heroes of our country. Because we can learn a lot from our history, value those who passed before us,” he admonished.

He also advised today’s Millennials  to love the country and study hard, to value the opportunity to participate in  good governance, and  not holding back in dreaming and working hard to achieve those dreams.

“From a slum dweller, I am now a city builder.  And my education in UP and in Harvard has given me a different perspective—a perspective that has empowered me to pay it forward. In building Clark Green City, my colleagues in the BCDA are  being able to offer Filipinos an opportunity to live a better quality of life—a life they deserve,” he said.  

“Clark Green City is a project for the benefit of the new generation. And we in the BCDA are committed to realize this for our country. We hope our countrymen will support this project, as it will behold proper urban planning that will yield growth that is inclusive—affordable quality of life that is world-class and responsive,” Casanova concluded.

Source : http://www.businessmirror.com.ph/arnel-paciano-casanova-from-a-slum-dweller-to-a-city-builder/

Lucio Tan at 25: Birth of an enterprise

In Photo: Himmel, 1999

By Joey de Guzman / Special to the BusinessMirror

AS a child, Lucio C. Tan was always fascinated by technology. With a sense of wonder, he marveled at the speed and efficiency by which machines and high-tech devices of his time transformed the world. He believed then, as now, that technology and innovation play vital roles in the development of any enterprise.

At his tender age, he dreamt of becoming a scientist. Thus, after graduating from Chiang Kai Shek High School in 1955, he immediately set this dream to motion: He enrolled in a chemical engineering course at the Far Eastern University. Though he did not become a full-time scientist by profession, his almost obsessive fondness for science and technology is reflected in his daily life and throughout his business empire.

Business mind-set

As a working student, the young Lucio Tan busied himself with mastering the craft of mixing chemicals and flavorings at the Bataan Cigar and Cigarette Factory. Through hard work and a frugal lifestyle, he slowly raised the seed of his envisioned enterprise. While still working for the cigarette firm, he became a partner in a cornstarch venture and, later, established an electronics shop producing transistor radios. Though both attempts at entrepreneurship didn’t take off, these setbacks only fueled his determination to pursue his dream.

Sowing the seeds of an empire

At 25, he started laying the groundwork for a chemical manufacturing and trading firm. While others of similar age were busy establishing careers after college, Tan was already forming the foundations of what would become one of the most inspiring corporate success stories in the Philippines.

Making the most of what he learned from his chemical engineering studies and his work of mixing chemicals at the Bataan Cigar and Cigarette Factory, he drew plans and purchased second-hand machines and reconditioned American trucks for his envisioned enterprise.

On November 18, 1960, Himmel Industries Inc. was born. The company started small, venturing into the trading of chemicals, such as refined glycerin, sorbitol, industrial honey, menthol and flavoring compounds. While the company’s original target market was the burgeoning cigarette industry, it later expanded operations to supply major ingredients to the food, pharmaceutical, beer, paint, ink, textile, cosmetic, paper, glue, plastic, rubber, PVC and cement industries.

Within the same year, Tan married Carmen Khao Tan. They have seven children.

Founders

Located in Barrio Santolan, Pasig City—where it still stands today—Himmel was founded by Tan and several partners. Each took specific roles in managing plant operations, marketing and cash management. With this core group, Himmel provided high-quality products and professional services, thus earning the trust and loyalty of its clients and business partners.

Early years

At the time of Himmel’s entry, there was great demand for refined glycerin—a chemical widely used in the cigarette, paint, pharmaceutical and cosmetics industries. However, few Philippine companies could meet the demand and the pharmaceutical grade required by most manufacturers. Seeing great opportunity, Tan flew to the United States and bought an old glycerin refinery, dismantled the same and rebuilt it piece by piece in the Philippines.

The refurbished plant was a huge success. Himmel was able to process and produce high-grade glycerin, which it sold to local companies at costs much lower than its imported counterparts. Because of Tan’s foresight and keen business sense, many local companies benefited from his glycerin plant, which made Himmel a byword in Philippine industrial circles.

Trading and related businesses

Years later, Himmel’s operations expanded to the trading of industrial chemicals. In 1977 it built a second glycerin plant.  With the foundation for long-term stability in place, Himmel diversified into the trading of fabricated steel drums, compound flavors, and fragrances and printing ink.

With great demand for flavorings and fragrances, Himmel introduced the planting of peppermint grass in Mindoro; propagation of citronella plants in Laguna; and raising of honey bees. It was upon Tan’s initiative that honey production was pursued. Even today, the tycoon is an acknowledged beekeeping expert, a skill he acquired during his younger days as a chemist for the Bataan Cigar and Cigarette Factory.

With natural competitive advantages as a supplier of raw materials, Himmel ventured into soap manufacturing. Through Manserve, an affiliate company, Himmel produces its own line of bath soap, like Nova, Success, Persona and Stiefel. The company is also a major subcontractor, producing different brands for various multinational corporations.

In 1981 Himmel set its sights on the booming Calabarzon area. Using South Korean technology, it built a private pier in Pinamucan, Batangas, that could service huge vessels with average lifting capacities up to 17,000 dead weight tons. Later, Himmel acquired 14 shore tanks with a combined capacity of 11.5 million liters of liquid bulk cargo, including aviation fuel.

On a par with international standards, Himmel’s liquid cargo terminal could store imported chemicals and solvents in bulk for later delivery to different parts of the Philippines. Equipped with some of the best safety and firefighting equipment, the cargo terminal has attracted an impressive list of clients which includes giant multinational firms.

Himmel and the lt Group

Through vision and hard work, Tan and his cofounders built Himmel from its small plant in Pasig City to its current status as one of the country’s biggest chemical traders. Its path to success was paved with calculated moves, carried out with methodical precision. Its operations were anchored in the belief that nothing can be gained from haphazard strategies.

Indeed, after more than five decades, Himmel has distinguished itself not only in the chemical manufacturing and trading sectors, but also as the seed from which sprouted a vast conglomerate that now cuts across the length and breadth of Philippine commerce.

It was from Himmel and, later, Fortune Tobacco Corp., that the Lucio Tan Group of Cos. (now publicly listed as LT Group Inc., or “LTG”) expanded into agribusiness; airlines and related services; banking, finance and securities; brewery; chemicals; distillery and alcohol; education; food; hotel; real estate; soap manufacturing; steel fabrication and construction; and tourism and travel services.

Since Himmel was established, Tan set his sights on the pursuit of quality and profitability that was to shape the vision of today’s LT Group Inc. With its achievements, it could be said that Himmel—more than a corporate success—is one man’s vision which he dreamed and put into action at the young age of 25.

Source : http://www.businessmirror.com.ph/lucio-tan-at-25-birth-of-an-enterprise/

Ambassador Antonio L. Cabangon Chua: No Dream Too Tall

In Photo: Portrait of the Cabangon Chua couple, who got married on the eve of Christmas, 1959 and Young businessman Tony, shown here with his third motorcycle, a Harley-Davidson speeder.

By Joel Pablo Salud |Special to the BusinessMirror

It was half past the summer of 2009 when, as the new boy in the Philippines Graphic newsroom, I was introduced to the company’s chairman emeritus, Ambassador Antonio L. Cabangon Chua. I was then just recently hired as the magazine’s new managing editor.

Tony (in bow tie), then the youngest member of the Chamber of Pawnbrokers of the Philippines. Then Manila Mayor Antonio J. Villegas is in left foreground.

At the doorway to his office, I saw the ambassador standing all dapper and sporty in his dark blue jacket, sports shirt and beige pants, even as he sported a smile that made me feel doubly welcome.

I immediately sensed a humility to him that defied explanation. I had worked in numerous companies prior to working with the Aliw Media Group. I was no stranger to corporate top brass. The same level of modesty I sensed in my new boss came few and far between.

Very few had had the chance to meet the man, whom many fondly call Amba, up close. As we shook hands and settled in his office, I noticed a huge framed photograph of a lovely woman in Filipiniana attire hanging by his wall. I recall wondering who the woman was, until later in the day when I was told she was the ambassador’s mother, Dominga Lim Cabangon.

Past the routine civility of introducing myself as his new hired hand, Amba immediately set the pace of the conversation. No small talk, no further courtesies; just a gesture of trust I rarely see in other bosses I’ve worked with in the past.

“I want you to interview General Ermita for the magazine today,” the ambassador said, obviously eyeing me with a bit of curiosity. After about half a minute of silence, he waved at his secretary, who apparently knew what the gesture meant.

The Filipinas Pawnshop, on the corner of Herran (now Pedro Gil) and General Luna in Paco, in a recent photo: Still in the same location after almost 50 years.

Turning to me, he then said, “My driver and my car are waiting for you downstairs. Hijo, I have worked with a lot of journalists and editors in my lifetime. All I ask is that you be fair.”

With no further instructions, he stood up and kindly saw me out the door. As I strolled past the secretary’s desk, he again called and asked me to draw near.

Thereafter, he leaned over and said, “I want you to think of the magazine as your own, and think of me as your own father. From this day on, I will treat you as one of my children. We’re your family, always remember that. If you need anything, anything at all, don’t have second thoughts of asking me.” He then patted me on the shoulders.

That alone said a lot about the sort of individual I was to respect as my boss. Little did I know then that there was more to this man than meets the eye.

Weeks into the job saw me scrounging for information about the ambassador—who he is, how he runs things. I have yet to hear anything adverse when, quite by accident, I stumbled on two books, one written by National Artist for Literature Nick Joaquin, Antonio L. Cabangon Chua: A Saga of Success, and its sequel penned by award-winning writer Jose F. Lacaba and Eric S. Caruncho.

While I was not the sort who read biographies, Joaquin and Lacaba were good enough reasons to flip the pages.

Tony Cabangon’s life as a child cared for by single parent—his mother Dominga—along the poorer side of Barrio Namayan in Mandaluyong was anything but a breeze.

During and immediately after World War II, the young Tony ran errands as a servant, rented out komiks, sold newspapers and magazines, and buffed the shoes of American GIs just to make ends meet. Later on, with a little help from a vocational course, the future ambassador to Laos worked as an automotive and diesel mechanic and a passenger jeepney driver.

His mother Dominga borrowed money from rich relatives in exchange for life’s modest needs.

Often ill-treated to the point of being humiliated, both mother and son soldiered on, Tony more than ever, who did everything humanly possible to ease the poverty of his mother.

It was a hard climb for both mother and son, but none too steep for Tony to reach. To ease the grip of poverty, the young Tony engaged in everything, from vending fish whenever he can to finally opening a humble sari-sari store in that pitiful riverside barrio they called home.

One defining moment in young Tony’s life came by way of an American GI. In the book The Continuing Saga of Success, written by award-winning poet Jose “Pete” Lacaba and Eric S. Caruncho, Tony himself reminisced about the incident.

Tony related that while he was shining the shoes of a GI, his eyes caught the pear the man was eating. Tony hardly had a bite to eat for hours. As if to taunt him, the GI asked if Tony wanted the pear.

“And this son-of-a-bitch American knew my mouth was watering for that pear he was eating. ‘You want this pear, boy?’ he grinned at me. I could only gape at him. The pear was only half-eaten and suddenly he hurled it away. ‘Go get it, boy!’ I didn’t move […] I refused to stir.”

It was then that the GI kicked the young boy “like a dog.” The sudden violence forced the young Tony to scamper under a six-by-six truck for safety, where he wept because of the pain.

“But at the time,” Tony said, “I felt something of my mother’s pride. I hadn’t run to pick up that thrown-away pear the GI wanted me to eat. I was very thin then, probably malnourished, certainly quite hungry. But I had not run after food like a dog. I had shown the American how even in misery, one can keep one’s pride.”

It served the young boy a lot of good to see to it that his mother was cared for by him all throughout her life, earning for himself some home-spun wisdom along the way. Coupled with being streetwise, the young Tony began his dream of a life even while in high school and college.

With more than ample resources from the sari-sari store, the young Tony ventured into being a driver of a passenger jeepney in his middle teens. It was, as he said, his first car. His job as driver and shopkeeper kept him busy all throughout the day, plying the Pandacan, Santa Ana and Paco routes. The hours he spent as college student of the University of the East he dedicated to studying until he made it into the Dean’s list.

No summer went by without seeing Tony on campus, between the pages of textbooks and inside classrooms. He was, at an early age, a man in a hurry. In three years, and at the age of 22, he was able to finish what was supposedly a four-year commerce course.

However, his attempt at being a certified public accountant proved disastrous for a time in Tony’s estimation. He had failed the first test. While on the verge of taking the second, his first business as a jeepney operator was already taking off.

But he had better things in mind than the meager return on investments he received from driving and operating a fleet of public-utility jeeps. Able to convince college friends to invest their money on a new venture—a pawnshop—Tony took on the reins of what would be a defining moment in his career as a businessman.

It cost him more than a hand and a limb: all of the P30,000 savings he garnered from operating a fleet of passenger jeepneys.

And so rose the Filipinas Pawnshop at the corner of Herran (currently Pedro Gil Street) and General Luna in Paco, Manila. It still stands today as an admirable tribute to the ingenious young man who knew how to turn his misfortunes into fortunes.

At the age of 26, Antonio L. Cabangon Chua was the youngest member of the Chamber of Pawnbrokers of the Philippines. He would decades later stand as the country’s diplomat to Laos and chairman emeritus of one of the country’s largest and most extensive business and media enterprises—the Antonio L. Cabangon Chua Group of Companies and the Aliw Media Group.

In honor of his mother’s memory, the ambassador shares his blessings through the Dominga L. Cabangon Memorial Foundation. With its goal of supporting needy children through education, the foundation has lent its hand in support of hundreds of scholars belonging to deserving children of his employees, also to priests seeking further education.

With this comes his homage to his good friend and first editor in chief of the Philippines Graphic, National Artist for Literature Nick Joaquin: the Quijano de Manila Foundation. The foundation’s aim is to offer financial assistance to the effort of developing young writers and children of journalists. The Philippines Graphic Nick Joaquin Literary Awards, now on its 25th year, seeks to enhance writers’ skills by empowering them with tools needed for the task.

“Whether you’re rich or poor, everyone has 24 hours in a day. It’s what you do with your 24 hours that counts. In life, you never give up.”

*Joel Pablo Salud is currently the editor in chief of the Philippines Graphic.

John C. Maxwell: Are You Stretching toward Your Goals or Just Coasting?

Swimmer Michael Phelps is arguably the greatest American Olympian and one of the greatest competitors of all time. In the 2008 Beijing summer games, Phelps won eight medals—all gold—to break the record for the most hardware ever captured in a single Olympiad and become the most decorated Olympian in history.

But it is the race that almost blew his winning streak that captivates me the most. It was his seventh contest, the 100-meter butterfly, and Phelps trailed for literally 99.9 meters of it. In the last fraction of a second, Phelps thrust his arms into one final, mighty stroke. Meanwhile, his Serbian competitor, Milorad ˇCavi´c, coasted the final few inches. Almost implausibly, Phelps tapped the wall first, beating ˇCavi´c by a mere one-hundredth of a second.

Most of us won’t experience such a heart-pounding, dramatic moment in our lifetimes, but we do make daily choices to either stretch or coast toward the finish lines we create for ourselves through personal goals. They’re often small decisions—routine things we don’t think about a lot—but they have the power to determine much of our success.

Reaching a finish line can be as simple as completing an “almost done” project or initiating a long-delayed and difficult conversation. Unfinished business can be disastrous. It drains your mental energy. It derails your goals. It impacts how you feel about yourself. And, critically, it can undermine your reliability in the minds of others.

Simply put: Procrastination is the enemy of progress.

Life is full of moments that require one more stretch to achieve success. If you don’t have the discipline to persevere, well, you’re going to end up like Phelps’ competitors—looking up at the winner from a lower podium (or worse). In the words of economist Thomas Sowell, “Doing 90 percent of what is required is one of the biggest wastes, because you have nothing to show for all your efforts.” Instead you must develop the habit of staying committed and finishing strong.

Here are some suggestions to help you do that:

Engage in brick-by-brick thinking.

I confess: I  have very little patience. I tend to want instant results. Still, I understand success requires daily progress. How do I solve this dilemma? With daily disciplines. I practice what might be called “brick-by-brick thinking.” My friend Henry Cloud, Ph.D., says, “All success is built and sustained just like a building is built, one brick at a time.” I practice regular disciplines every day, and these small, incremental actions turn into tangible steps toward success.

Amplify the reward.

When you don’t feel like doing what you should, then focus on why finishing is important. The why can keep you motivated even when you lack desire. Motivation is fickle. You can’t depend on your emotions to keep you committed to your goals. So envision your end result and keep it in the forefront of your mind. How will you feel when you accomplish your goal? Why is it important to you? By focusing on the answers, you’ll stand a much better chance of reaching your goals.

Build structure and systems around your goals.

Great intentions don’t get me very far. I need systems. They make it easier for me to stay disciplined. I have an insatiable hunger to learn, so I read every day. I want to stay fresh, so I file great quotes and illustrations every day. I had a heart attack in my 50s, so I exercise by swimming every day. (Phelps’ Olympic records are safe, by the way.) My life is filled with systems that move me forward and push me to reach my wall.

Surround yourself with support.

Over the years I  have found that I am most successful when I tap into a network of people who support me and encourage me in my goals. When I need business advice, I talk to my brother Larry and my company’s key businesspeople. When I want to launch a new venture, I talk to my CEO, Mark Cole, and members of my inner circle. When I am ready to write a book, I meet with my creative team to brainstorm and vet ideas.

If you want to succeed, surround yourself with people who will help you, encourage you and, when necessary, hold your feet to the fire. Remember to choose wisely—your success largely depends on the company you keep.

Quitting isn’t an option.

A great start is important, because all’s well that begins well. But it takes much more to reach your goals. I tend to think of it like farming: You can prepare the land immaculately and plant the seeds just right, but if you don’t water, fertilize and cultivate as you go, then you wasted your time by planting the crop. Remember the reward that awaits you—the fruit you will harvest—and it will help get you through the times of hard work in the “summer.”

When I was a kid, my father always told me, “When you made the choice to start, you made the choice to finish. It isn’t two choices… It’s one.” He taught me early that if you aren’t careful, quitting can become a habit. The good news is that finishing can also become a habit when you practice diligence in all that you do.

There’s an old saying, “The fortune is at the finish line.” It’s absolutely true. Why did Michael Phelps aggressively reach for the wall at that critical moment? Because he had practiced finishing strong every day of his life. And that made the difference between gold and silver.

Let’s learn from his lesson. And let’s remember that, oftentimes, the only thing separating us from success is a few inches. So don’t let up, and reach for the finish line!

Source: John C. Maxwell / http://www.success.com/article/john-c-maxwell-are-you-stretching-toward-your-goals-or-just-coasting

Battle over Cagayan de Oro airport: US base or new city center?

NEW CITY CENTER. Engineer Isidro Borja (left), Cagayan de Oro’s top planning and development officer; and Eileen San Juan, the city’s chief for Local Economics, Investment Promotion, discuss the planned Cagayan de Oro city expansion. Photo by Bobby Lagsa/Rappler.

CAGAYAN DE ORO CITY, Philippines – Is there a looming battle over the use of the old Lumbia airport?

The national government is not the only one eyeing the old airport, reportedly for use by the US military under the Enhanced Defense Cooperation Agreement (EDCA). The Cagayan de Oro city government has also expressed interest in developing 106 hectares of prime airport property in Barangay Lumbia.

The city’s top urban planners, with the help of the United Architects of the Philippines, created the Planned City Expansion (PCE) in Barangay Lumbia, an expansive uptown village deemed suitable for expansion as it is not prone to flooding and has potential as the new city center.

Cagayan de Oro Mayor Oscar Moreno said the PCE was conceptualized under the United Nation Habitat’s Achieving Sustainable Urban Development (ASUD) project with the assistance of Arcadis, a global design, engineering, and management consulting company.

The PCE covers 820 hectares of land including the Lumbia airport which is now under the control of the Philippine Air Force’s 10thTactical Operations Group, though the land is owned by the Department of Transportation and Communications (DOTC).

New growth area

Moreno said that the prime land, which is 180 meters above sea level, is a strategic area since future expansions under the Mindanao Logistics Infrastructure network (MLIN) pass through or near lumbia.

The MLIN is a long-term development plan for the road network in Mindanao. It includes new construction, and the upgrade and improvement of existing national roads and local roads.

All agencies, including the Department of Public Works and Highways, should use the MLIN plan as a guide for their own long and medium term development plans in the area covered by the plan.

EXTENSION. The conceptual plan of the planned Cagayan de Oro city extension. Map courtesy of the CDO government

The MLIN is intended to be used as a reference for agencies involved in the development of the Mindanao transport network.

A new national road is being constructed that will connect Iligan City to Bukidnon.

Engineer Isidro Borja, chief of the City Planning and Development Office, said that the PCE will be the new growth area of the city with its cluster of areas for development.

“It is like a self-contained community where everything is there, without having to go to other places to work or study,” Borja said.

Last year, Christopher Rollo, ASUD country program manager for UN Human Settlement, said that if the expansion of the city is left unplanned and unchecked, it is likely to be driven by real estate market that favors development for the rich.

“In Lumbia, it is where everything can be put in place like public spaces can remain public, road network connected to other districts without being blocked by private ownership of lands,” Rollo said.

Mixed-use modern district

Eileen San Juan, the city’s local economics and investment promotions chief said that she met with defense officials on January 11, 2016, to present the city’s PCE, which includes the Lumbia airport.

Moreno said the PCE was presented to President Benigno Aquino III and Cabinet officials as early as 2013 as part of the city government’s bid to promote the city.

San Juan said that the PCE is an exercise in urban planning which the city badly needed.

Under the PCE, there are 5 proposed clusters – Lumbia airport is under Prime Cluster A where local and national government offices are located.

“We will also replicate ‘Plaza Divisoria,’ which is a unique feature not found in any other city,” San Juan said.

Plaza Divisoria is a strip of 5 parks with statue of national hero Dr Jose Rizal, Andres Bonifacio, president Ramon Magsaysay, and mayor Justiniano Borja who first planned the city’s business district which Divisoria will be part of.

San Juan said the city wants a strategic and sustainable development node, a model for adaptive reuse, providing rural areas easy access to economic opportunities and social services.

“We want an institutional landmark with wide public parks and open space in harmony with medium to high density residential and commercial development which would showcase the city for livability and resilience,” San Juan said.

Borja said the PCE conforms with the approved Comprehensive Land Use Plan (CLUP).

“With the diverse housing market, low, medium, high end suitability for resettlement, this project will answer the housing shortage in the city,” Borja said.

Clusters

San Juan said each cluster under the PCE is designed according to use.

• Cluster A: Institutional and mixed use
• Cluster B: Farmstead/homestead villages
• Cluster C: Medium-density residential with community facilities, health and education, low intensity commercial area with at least 20% social housing with connection to town center and public spaces
• Cluster D: Residential villages in terraced fields, water retention ponds, soil erosion control and tourism activities with ecotourism (biking, trekking, adventure sports), mountain view resort with convention and meetings facilities
• Cluster E: Agri-processing Complex with waste management facility, mixed use Low–medium end housing, commercial, community facilities, value chain-considered efficient access to raw materials and markets

CLUSTERING. Cluster A is where local and national government offices would be located. Courtesy of the Cagayan de Oro city government

Borja said the PCE was designed considering road traffic. “All major roads will be 30 meters wide, while other roads will be at least 10 meters wide, both with provisions for pedestrian and cycling lanes.”

“We wanted the PCE is to be as walkable as possible; we want it to be environmentally and people friendly,” Borja added.

Adjustments

If EDCA enters into the picture and the airport is used by the US military, city officials said they would have to just adjust the design accordingly – but not without first exhausting efforts to convince the national government to favor the PCE.

Moreno said the long-term plan is for the common good.

“It is up to the national government if they’d allow the local government’s initial plan. We need them (national government) to cooperate because basically, the land belongs to to the Civil Aviation Authority and we cannot plan without them involved,” Moreno said.

Moreno added that the city government is taking steps to convince the national government on the expansion, as it is for the common good.

In its plan, residential areas will get 19.72% or 177.62 hectares; commercial area, 2.04% or 18.35 hectares; institutional 4.6% or 42.1 hectares; agro-industrial 2% or 17.87 hectares; mixed-used 15.8% or 142.9 hectares; commercial and transport facilities, 0.91% or 8.19 hectares; roads, 15.96% or 143.76 hectares; public spaces, 38.83% or 349.72 hectares.

“We will be expecting adjustments and needs to revisit the planning and resources needed to achieve our goal of the PCE,” San Juan said. – Rappler.com

Source: Bobby Lagsa/ http://www.rappler.com/nation/120224-battle-lumbia-airport-us-base-cagayan-de-oro-city-center

Affordable financing drives growth

“Housing demand is always determined by housing finance,” said Januario Jesus Gregorio Atencio, III, 8990 Holdings,Inc. president, in defending  developers’ need to have in-house financing for their projects. 

 Earlier, property consultant KMC-MAG expressed concern about the threat posed by developers’  focus on financing when their expertise is in construction. 

“When you build an econometric model for housing, on top of that is finance. The more accessible housing finance is, the more housing (projects) there will be,” said Atencio. 

“Finance is dictated by affordability. If housing finance is stopped, interest rates are high, entry requirements are high say at 20 percent down payment, then demand will be very small,” he added. 

Antton Nordberg, KMC MAG Group Inc.head of research, said apart from finance not being a core competency of developers, there is also no clear picture on the size of the in-house financing market which remains unregulated. 

“Overall, it’s been increasing quite fast,” he said, noting  the Central Bank’s policy to scale back bank’s lending activity may have also contributed to the rise of in-house financing. 

“Why this is a problem (is because) developers’ core expertise is not necessarily in the financing of products but rather in the development. So there might be some serious underestimate(ion) in the credit worthiness of the home buyer since (this is)  more of risk management than project development,” he added. 

Nordberg, however, was quick to point out that the risk is not an immediate threat. Still this could pose a problem should some external shocks arise. 

“It’s not really an issue right now but if there are some external shocks, it might cause some problem,” he said. 

Atencio said while developers should not be bankers, as KMC-MAG, they will undertake initiatives  to move housing forward. 

Atencio said state-housing fund Pag-IBIG had been successful in lowering the cost of housing for buyers through lower interest rate and lower premiums, making housing more affordable,” 

By ALBERT CASTRO/January 28, 2016/ http://www.malaya.com.ph/business-news/special-features/affordable-financing-drives-growth

Affordable housing finance remains a key in propelling the growth of the housing sector. 

9 trending local cities this year

Property analysts and experts forecast that developers will continue to pursue township developments in and outside Metro Manila in 2016. Now, where could these, and other types of developments be? Here are the nine likeliest urban locations:

1 Cavite. Colliers International Philippines cites three reasons Cavite is on developers’ maps:

• Cavite has been known as a suburban support area to Metro Manila. With its relatively cheaper housing costs, Cavite has drawn within its boundaries hundreds of thousands, who still commute daily to their workplaces within Metro Manila.
• Numerous infrastructure projects recently launched will allow Cavite to flourish. The LRT-1 extension project will end in Bacoor; the government has now started the bid for LRT-6 which will further extend the LRT line from Bacoor to Dasmariñas City. Furthermore, the 44-kilometer Cavite-Laguna Expressway (Calax) project will provide necessary access to growth areas in Cavite.
• With the completion of the Muntinlupa-Cavite Expressway (MCX), a toll road which connects the South Luzon Expressway (SLEx) to Daang Hari, property values in the area are foreseen to escalate rapidly. The new toll road will spur rapid development in emerging master-planned communities such as Vista Land’s Vista City and Ayala Land’s Vermosa Estate, which have the potential to establish themselves as full-blown central business districts (CBDs).

Property portal Lamudi Philippines, in its 2016 top cities list, shares eight more locations that will benefit from real estate investments.

2 Quezon City. The population of Metro Manila’s largest city is projected to grow to more than 3.5 million by 2020, with many looking into relocating there. Quezon City properties are relatively more affordable compared to Makati and Taguig, and offers plenty of options to homebuyers.

3 Makati. The country’s foremost financial and business district won’t be outdone, even if the average rental rate in its CBD is expected to decrease 3.39 percent year-on-year by the third quarter of 2016, vacancies to increase to 10.19 percent across all condo grades. Fringe areas, however, are starting to see an uptick in real estate activity, particularly Barangay San Antonio, near Ayala Avenue. “Worsening traffic conditions in Metro Manila are making these areas attractive to renters and homebuyers,” said Lamudi.

4 Taguig. “Taguig’s population is projected to reach almost one million by 2020, which will make it the National Capital Region’s fourth more populous (after Quezon City, Caloocan and Manila) and the country’s 9th. The city’s real estate sector has been on an upswing ever since Fort Bonifacio was privatized,” noted Lamudi. It added that several projects now are underway: Megaworld’s McKinley West and Ayala Land’s Arca South. Access to and from the airport (particularly Terminals 1 and 2) and to Coastal Road will also improve when the flyover connecting CP Garcia Avenue to the Moonwalk Access Road and West Service Road is finally completed.

5 Pasay. This city is gaining prominence because of: 1) Bay City—the reclamation area along Manila Bay housing the Mall of Asia Complex, Entertainment City—and Aseana City; 2) The SM group has already incorporated office and residential components in the MOA complex; 3) Federal Land is set to complete its Six Senses Residences in 2016 and its first tower in the Palm Beach project in 2017; 4) Improved infrastructure when the Naia Expressway connecting the Metro Manila Skyway to the Manila-Cavite Expressway and Entertainment City, is finally completed.

6 Bacolod. In mid-2015, Lamudi data showed that Bacolod had become among the most popular cities among online property hunters. In fact, real estate giant Megaworld announced in late 2015 that it was building two integrated townships in the city (the 50-hectare Northill Gateway and the 34-hectare The Upper East), while Ayala Land has sealed an agreement with the provincial government of Negros Occidental to build the mixed-use Capitol Central.

7 Davao. Davao remains southern Philippines’ economic and business center, and one of the most searched cities in the Lamudi website in 2015. Its population is projected to balloon to 1.83 million by 2020. Davao is also consistently among the most searched by online property hunters, and the sixth and third most searched city by property hunters based in the United States and Saudi Arabia, respectively, according to Lamudi data.

8 Cebu. Cebu City is one of Tholons’ top 10 outsourcing destinations in the world (and second in the Philippines behind Metro Manila). According to CB Richard Ellis Philippines, exciting expansions and new developments are coming in over the next few years. In 2015 alone, two new large malls opened in the city, SM Seaside City Cebu and Robinsons Galleria Cebu. SM Seaside alone has an area of 10-15 hectares devoted to commercial development, similar to the E-com office towers in the MOA complex, while Robinsons Galleria will have entire floors dedicated to BPO offices.

9. Muntinlupa. The south of Metro Manila, specifically Muntinlupa, is also projected to perform well this year, with the launch of several high-profile projects from the country’s biggest developers, one of which is Avida’s South Park District, a mixed-use development sitting on the former Nestlé plant in Alabang, in addition to the established Filinvest and Madrigal business districts. Further, in anticipation of infrastructure projects expected to ease travel to the south, property developers, including Rockwell subsidiary Rockwell Primaries, and Vista Land are now eyeing Muntinlupa as their next focus area.

Source: By: Tessa R. Salazar / http://business.inquirer.net/206043/9-trending-local-cities-this-year

Elections to affect real estate activity; oversupply in vertical residential segment

AS THE PHILIPPINES “goes bananas” in an election year—in the year of the monkey at that—property experts see a number of challenges, and likely trends, flavoring and coloring the real estate industry in 2016. Here’s their fearless forecast:

1. There will be an oversupply in the mid-market vertical residential segment.

“I expect 2016 to be the most challenging year for the residential property sector. A looming oversupply in the mid-market vertical residential segment in Metro Manila is developing, and developers should expect a slowdown by as much as 10 percent in the average annual take-up rate of 50,000 units. Several developers are already holding back sales of new projects until supply balances out in 2018,” said Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business, in an Inquirer Property interview.

Soriano said that with this oversupply scenario, “we will naturally anticipate vacancy rates to go up in 2016 to double digits in the Makati and Ortigas CBD (central business district) area.”

2. The 2016 presidential elections will affect the market. Soriano said the presidential and national elections “is likewise expected to freeze any major real estate activity in the first two quarters of 2016. Naturally, investor sentiment will be on a wait-and-see attitude. This will not bode well for the property sector and the economy as a whole. Hopefully, after the elections, it will be followed by a possible uptick in transaction levels in the last two quarters of 2016,” said Soriano.

3. Business process outsourcing (BPO) growth continues. BPO companies, according to property portal Lamudi Philippines, will continue to buoy Metro Manila’s commercial real estate.

“Experts do not foresee the supply of office space surpassing demand soon, meaning commercial properties (and offices in particular) remain a beneficial investment for 2016,” said Lamudi

Philippines in a statement.

Soriano said that in 2016, Grade-A office rents in prime areas is expected to increase 5 percent, given strong demand for office space and low vacancy rates. Meanwhile, rents in non-CBD areas may slightly drop by 5 percent due to available supply in Makati and Bonifacio Global City.

4. Metro Manila land values will go up. Lamudi Philippines said that despite slower gross domestic product growth in 2015, land values still continue to appreciate, albeit at a slower pace.

Colliers International said that growth rates of land values in Metro Manila accelerated in the second quarter of 2015. In addition, land values in the Makati CBD, growing at only 0.85 percent during the first three months of the year, rebounded in the next three by growing at a rate of 2 percent. This raised the area’s average price to P452,704 per square meter. Values similarly rose in the business districts of Fort Bonifacio and Ortigas Center, increasing at 1.97 and 2.1 percent, respectively.

5. Retail property market will face a slowdown. Soriano said “the challenging retail environment is likely to persist next year due to diminishing inbound tourist arrivals. We expect prime rents outside of the shopping centers to slide by 10 percent in 2016, while shopping mall spaces are expected to escalate.”

“We can also expect a decline in premium retail market rents due to the expected drop in tourist arrivals as a result of the national elections happening in the first half of 2016. The mass retail market is expected to remain resilient as domestic consumption continue to grow, fueled partly by election spending nationwide,” said Soriano.

Source: by Tessa R. Salazar / http://business.inquirer.net/204872/elections-affect-real-estate-activity-oversupply-vertical-residential-segment

Construction in full swing: Commercial sector shows no signs of slowing down as developers off to a strong start this 2016

IF the latter part of 2015 and the first quarter of this year would be any indication of how busy and vibrant the entire 2016 will be for the Philippine real-estate sector, it would be safe to say that we’re likely bound to surpass the milestones of the past year.

While the residential sector has been reaping the fruits of continued investments over the past few years, players within the commercial development sector, most notably, are now starting to enjoy an increasing growth momentum as more and more developers venture outside of Metro Manila.

ArthaLand and Robinsons Land Corp. (RLC), for example, have both began strengthening their presence in Cebu, which has earned the reputation as the most vibrant investment destination in the Visayas. ArthaLand plans to promote its sustainable building culture by putting up an “energy-efficient and environmentally sustainable office building” also in Cebu City. The company recently acquired a property in Cebu via its subsidiary, Cebu Levana Land Corp., and plans to offer approximately 51,000 square meters of office space for the region’s offshoring and outsourcing sector (O&O) players.

Meanwhile, the latest Philippine Property Market Monitor from Jones Lang LaSalle reported that RLC is set to inaugurate an office building in Cebu City, which will take up about 30 percent of its 4.6-hectare property that also houses the recently opened Robinsons Galleria Cebu. This is deemed to be a welcome development for commercial locators in Cebu, particularly for those engaged in its O&O, as the facility will be offering a GFA of close to 9,500 sq m.

Booming growth beyond Metro Manila

Back in Luzon, developers are also keen on building the next thriving investment districts outside of Metro Manila. In Clark at Northern Luzon, construction activities will likely hit a record high in the months to come following the recent announcement of two massive development projects: Global Gateway Development Corp.’s (GGDC) Aeropark Campus and the 35,000-hectare Clark Green City.

The $150-million Aeropark Campus, one of the more remarkable investments initiated by Kuwaiti investors GGDC, promises to be a major development that will help shift the focus of growing industries away from Metro Manila. The project, which will host more than 5.8 million sq m of premium office, logistics, retail, hotel and residential space, is expected to generate at least 10,000 jobs during the first few years of its operations. That number is seen to balloon to at least 300,000 jobs once the entire project is completed. Clark Green City (CGC), meanwhile, is seen to lure more foreign investors as state-owned Bases Conversion and Development Authority (BCDA) continues to facilitate development for the 9,450-hectare master-planned property inside the Clark Special Economic Zone. Once completed, the entire CGC has the potential to generate a gross output of at least P1.57 trillion annually, apart from facilitating the continued growth of more areas in Northern and Central Luzon.

Supply more than meets current demand

The abundance of office spaces in other areas within Metro Manila continues to complement the increasing demand and confidence of local and foreign investors.

A recent insight shared by experts from Jones Lang LaSalle revealed that, as we speak, there’s a total of 1 million sq m of available office space spread out among areas like Makati City, Ortigas, Bonifacio Global City, reclaimed areas in Manila Bay, and Alabang in Muntinlupa. Of this grand total, at least 15 percent to 20 percent will be taken up by business-process outsourcing (BPO) companies, as established firms expand their operations and new players come in. All of these developments confirm the earlier analysis made by Lamudi Inc. Founder and Managing Director Jacqueline van den Ende, who was among the thought leaders I spoke to for one of my trend reports prior to the end of 2015. “Developers are looking to go provincial due to the increasing scarcity of available land.

A couple of very big projects are being launched, especially in Cebu and in other provinces.…The office market in Manila will continue to be very strong. We see a lot of strata-titled office developments launched this year, which I think will be huge in 2016. Metro Manila’s office market is tight with very few properties coming online.

This is especially true in non-BPO-type offices. This presents an opportunity for investors.” We’re definitely on the lookout for how all these exciting developments will shape up this year. Great times ahead, everyone!

Source: http://www.businessmirror.com.ph/construction-in-full-swing-commercial-sector-shows-no-signs-of-slowing-down-as-developers-off-to-a-strong-start-this-2016/

LESSONS LEARNED IN 2015

Property portal Lamudi said  2015 was a good year for Philippine real estate. 

In the first part, we gave a rundown of 12 of the 25 lessons in property development in 2015.

The remaining 13 are as follows:

13.  Forbes Park is the most expensive subdivision in the Philippines
Average monthly rents in the very exclusive Forbes Park—home to business tycoons, foreign dignitaries, and boxing icons—stand at Php402,459, making the enclave the most expensive area to rent a
house anywhere in the Philippines.

15. Filipino-Americans prefer houses
Despite the condo boom happening in Metro Manila and other major cities across the Philippines, it seems that many Filipinos based in the United States still prefer to purchase houses, at least according to
January–June 2015 search data from Lamudi. More than half (57.83 percent) of all searches in the Lamudi website were for houses, followed by condos (16.58 percent). The most searched cities? Quezon
City, Makati, Manila, Tagaytay, and Baguio, in this particular order.

16. Cities affordable for first-time homebuyers
There are cities surrounding Metro Manila abound with affordable options for first-time homebuyers. These cities include San Jose Del Monte, Bulacan, where average home price stands at Php495,999; and followed by San Mateo, Rizal (Php549,259); Dasmariñas, Cavite (Php1.189 million); Imus, Cavite (Php1.858 million); Bacoor, Cavite (Php2.777 million); Antipolo, Rizal (Php3.668 million); Santa Rosa, Laguna (Php4.16 million).

17. Condos close to train stations are more expensive
An average condo located within 100 meters of an MRT station is at least Php16,645 more expensive per square meter than a similar, newly built condo situated more than 500 meters away, according to
listings data from Lamudi.

18. Ayala Center, Century City, and Rockwell Center lead most expensive list
Ayala Center—the commercial core of the Makati CBD—commands the most expensive condo rent per sqm than any area Metro Manila. Living in the area, which is within striking distance of Greenbelt, Glorietta, and most of Makati’s luxury hotels, can set a renter back Php1,144 per sqm per month, meaning a 100-sqm condo here can command monthly rent of more than Php110,000. Following Ayala Center are Century City and Rockwell Center in Makati’s Poblacion area, where condos command monthly rents 
of Php986 and Php973 per sqm, respectively.

19. Pricier condos are not necessarily bigger
On a per-square-meter basis, more expensive condos do not necessarily mean bigger space. Areas where condos are on average bigger are actually cheaper on a per-sqm basis. These areas include Ayala Triangle/Apartment Ridge, where condos average 275 sqm and where monthly rents average Php568 per sqm. This area is followed by Salcedo Village, where the average size of condos is 126 sqm and average monthly rent stands at Php652 per sqm. In contrast, in the Mall of Asia Complex and Newport City, the average sizes of condos are 34 and 50 sqm, but monthly rents average Php850 and Php785 per sqm, respectively.

20. Caloocan will be the second most populous city by 2020
The City of Manila will be overtaken by nearby Caloocan as the Philippines’ second most populous city by 2020. This is according to an analysis by Lamudi using the annual average population growth rate issued by the Philippine Statistics Authority in 2010. Caloocan’s projected 2020 population will be 1.88 million, compared to Manila’s 1.72 million.

21. Eleven PH cities will have populations of more than 1 million by 2025
Using the annual population growth rates recorded in 2010, 11 cities in the Philippines are projected to have populations of more than 1 million. These are Quezon City (3.95 million), Caloocan (2.115 million), Davao City (2.056 million), Manila (1.76 million), Dasmariñas (1.27 million), Antipolo (1.25 million), Zamboanga City (1.25 million), Cebu City (1.14 million), Taguig (1.12 million), Bacoor (1.11 million), and Pasig (1.022 million).

22. Can BPO workers afford condos?
With an average monthly salary of Php22,500, entry-level customer care representatives cannot afford to rent a condo in either of these “affordable” areas: Eastwood City, Pioneer-EDSA, Poblacion (Makati), and San Antonio (Makati), where average rents range from Php19,838 to Php22,563 per month. Using the 30 percent rule (spending not more than 30 percent of one’s monthly income on housing), only those working as managers, with an average compensation of Php75,000 per month, may only afford to rent a condo in these select areas.

23. How long Filipinos should work to buy a home
A salaried Filipino with more than 20 years of work experience and earning Php1.43 million per year may need 128 years’ worth of his salary in order to afford a house in Makati where average home price stands at Php184 million. In contrast, this same person needs 4.16 months’ worth of his annual salary in order to afford a home in San Jose Del Monte, Bulacan, where the average home price is Php495,999.

24. Are Filipinos buying or renting?
Based on its third quarter 2015 search data, Lamudi found that there is an almost equal proportion of renters and buyers among 18- to 24-year-old online property-hunters (50.2 percent for rent versus 49.8 percent for sale). Quite interestingly, there is a tendency for property-hunters to check out for-sale properties online as they get older. Among 25- to 34-year-old users, 57.3 percent are checking out for-sale properties. In the 35–44, 45–54, and 55–64 age groups, it is even higher; 70.8, 72.6, and 71.1 percent of the website’s users, respectively, are checking out for-sale properties.

25. Most sought-after locations for land
Quezon City, Tagaytay, and Baguio are the top three most popular locations among property-hunters looking for land online. These cities are followed by Davao and Antipolo. “Clearly there are cities preferred by people researching about land for sale online, and we hope these findings will give real estate developers insight into how to properly plan their next projects,” said Lamudi. In addition, the fact that only five Metro Manila cities were in the top 10 indicate that Filipinos are not too keen into buying residential land within the National Capital Region, either due to lack of supply, unaffordability, or both.

Source: http://www.malaya.com.ph/business-news/special-features/lessons-learned-2015