January-February remittances reach US$2.6B

(By www.bsp.gov.ph)

Remittances from overseas Filipinos (OFs) coursed through banks grew year-on-year in February 2009 by 4.9 percent to US$1.3 billion. This was an improvement from the minimal increment (0.1 percent) recorded in January. The cumulative remittances in the first two months of 2009 amounted to US$2.6 billion, or an annual growth of 2.5 percent. Remittances from sea-based and land-based workers for the two-month period registered increases of 6.1 percent and 1.7 percent, respectively.

"Remittances have been holding up as deployment of overseas Filipino workers has risen during the first two months of the year while the increase in the number of reported layoffs has slowed down," BSP Governor Amando M. Tetangco, Jr. said. Preliminary data obtained from the Philippine Overseas Employment Administration (POEA) indicated that the total number of deployed overseas workers for the two-month period posted a year-on-year growth of 27.3 percent to 283,348 from 222,608 a year ago. The Department of Labor and Employment (DOLE) also reported that the Philippines will renew the labor arrangement with South Korea under the Employment Permit System (EPS). The EPS which is expected to be signed this May would give priority in finding employment to displaced Filipinos working in South Korea.

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In addition to the hiring agreements forged with some host countries (such as Canada, Australia, Japan and some Middle East countries such as Qatar) that are expected to open employment opportunities specifically in healthcare, education, power/energy, and real estate sectors, the Philippine government has also intensified its efforts to redeploy retrenched overseas Filipino workers to countries that have not been severely affected by the global financial turmoil. Specifically, Saudi Arabia and Libya continue to hire workers in the construction and healthcare industries. Moreover, the relocation in 2010 of the U.S. Naval forces presently situated in Okinawa, Japan to Guam could provide job opportunities to Filipino workers.

Governor Tetangco further observed that commercial banks' continued expansion of their international and domestic market coverage to capture a larger share of the global remittance market has also helped to sustain the inflow of remittances. Specifically, banks' tie-ups with placement agencies and remittance companies abroad to market their remittance products and services to Filipino communities overseas, and the forging of agreements with more rural banks to serve as their remittance pick-up partners, have expanded the channels for remittances.

For the period January-February 2009, the major sources of remittances were the U.S., Saudi Arabia, Canada, Japan, U.K., Singapore, Italy, and United Arab Emirates.

Pag-IBIG lowers housing loan rates anew

(By www.pagibigfund.gov.ph)

VICE President and Chairman of the Housing and Urban Development Coordinating Council (HUDCC) and the Home Development Mutual Fund (Pag-IBIG Fund) Board of Trustees, today announced further adjustments to its end-user financing program, this time creating additional housing loan brackets with corresponding lower interest rates. The rate adjustments are aligned with the redefined housing packages set by the HUDCC.

The new Pag-IBIG housing loan interest rate structure retains the 6%-rate for loans up to P400,000, and 7% for loans over P400,000 up to P750,000.

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Interest rates have been slashed from 10.5 percent to only 8.5% for loans over P750,000 up to P1 million, and to 9.5% for loans over P1 million to P1.25 million.

Meanwhile, interest for loans over P1.25 million to P2 million remains at 10.5%.

Along with the latest rate adjustment, the Pag-IBIG Board also approved the increase in maximum loanable amount to P3 million, at an interest rate of 11.5% per annum for loans starting at over P2 million.

De Castro said the latest amendments in the Pag-IBIG housing loan program are intended to make the program more affordable to members, especially workers in highly-urbanized areas whose housing needs often range from more than P750,000 up to 1 million. Likewise, with the Board's approval of raising the loan ceiling to P3 million, Pag-IBIG will be able to meet the home financing needs of members belonging to the middle-income earners. "This should give Pag-IBIG members a wider range of choices in buying a house," he said.

Over the last two years, the Fund has implemented significant improvements in its end-user financing program. In 2007, Pag-IBIG has reduced the interest rates for loans over P300,000 to P750,000 from 10.5% to 7%. Earlier this year, the socialized housing bracket was expanded to cover loans of up to P400,000.

With the new changes taking effect April 1, Pag-IBIG member-borrowers can look forward to more value for their money as well as savings especially at this time of economic difficulties. "The savings given the lower monthly amortizations should convince Pag-IBIG members that buying their own home is a more practical alternative to renting," De Castro added.

Members who avail of a P1 million housing loan stand to save 15.94% per month with amortizations of only P7,689.13 (covering principal and interest) over a 30 year period, compared to P9,147.39 under the old rate of 10.5%.

Year-on-year figures show the Pag-IBIG Fund is able to maintain the growth in its housing loan takeout. From P4.59 billion, the Fund recorded a P5.83 billion total takeout from January to February of the current year, representing a 27% increase.

"The demand for housing, especially from the low and middle-income earners, continues to be strong despite the global financial crisis," he said.

Following these amendments in the Pag-IBIG housing loan program, the Fund expects to maintain a steady growth in loans granted to members and attain its target of P43 billion takeout for 2009. "This will further sustain the housing sector by providing financing to home buyers at very attractive, affordable rates," De Castro said.

Developer earmarks P2.7B for 5 projects

Despite the threat of consumer spending tightening, residential developer Primary Homes is ready to splurge P2.7 billion for at least five condominium and subdivision projects in Cebu this year.

"I believe that demand for housing is going to continue for Cebu. Compared to other parts of the world, our economy [Cebu] is pretty much okay," said Primary Homes president Stephen Charles Liu.

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This year, Primary Homes, formerly known as Commonwealth Estate Inc.(CEI), is going to introduce five new residential development projects, including two pocket-size subdivisions to be built in Talamban, and Banawa.

Following the strong take up of its condominium project, Wood Crest Residences located in Banawa, the company will be introducing another condominium project to be called "La Guardia Flats" in Lahug.

According to Liu, spending for residential acquisition from the Overseas Foreign Workers (OFWs) is going to sustain, amid the ongoing massive retrenchments in the United States, and other countries.

He expressed confidence that Filipino workers especially those that are working in the United States, will be the least affected amid the lay-off and job streamlining, because majority of them are employed in the education and healthcare sectors.

Education and healthcare have immunity to crises as these are very important sectors, and massive job streamlining in these areas are unlikely to happen. Besides, Liu said Filipinos are the most sought-after workers in the world, so they are the "last ones" to be ditched out, in times of difficulties.

Thus, spending for residential acquisition in both subdivision and condominium projects are seen to stay dynamic in Cebu.

The booming Business Process Outsourcing (BPO) sector, as well as tourism will also help strengthen real estate products' take up in Cebu, in both residential and commercial developments, Liu said.

Primary Homes' parent company Primary Structures Corporation (PSC), the region's largest general contractor and builder, also operates the Primary Properties Corporation (PPC), the well known name in commercial building leasing and one of the major building owners at the Asia Town IT Park here.

While the local market still opts to buy subdivision-based properties, the expatriates and Filipino and foreign migrants to Cebu are the consumer backbone of condominium products, he said.

In the next few months, Primary Homes will introduce Casa del Rio, its pocket-size subdivision in Highway 77, Talamban, that will offer 24 housing units targeted to the middle to lower-high-end consumer base.

Banner year for Real Estate

Subdivision and Housing Developers Association Inc. (SHDA) governor for the Visayas Rey Ralota credited the upward trend of the industry to the strong surge in overseas remittances from Filipinos abroad, a reliable market for property developers.

He also cited the strong business process outsourcing (BPO) industry in Cebu, which led to an increased demand for housing facilities like condominiums and office buildings, as well as Cebu’s positioning as a premier business and tourism destination.

“Cebu has always been regarded as the second biggest market after Manila. This factor alone makes Cebu an attractive destination for business activities,” Ralota said.

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Philippine Association of Realtors Board Inc.-Cebu Realtors Board Inc. (Pareb-Cereb) president Emily Cabillada said the industry’s resurgence was felt after the Asian financial crisis that began in 1998, a period that challenged the real estate industry.

Cabillada also pointed out public investments of the past administration for Cebu like road improvements, among others, which opened opportunities in the real estate sector.

Cabillada said there is an equal increase of both vertical and horizontal projects in Cebu this year.

Vertical developments such as office buildings and condominiums are in demand to serve the growing BPO market, while horizontal developments such as subdivisions strategically located in the city continue to grow.

The housing backlog was estimated by SHDA 7 at 50,000 units.

Cabillada also noted that infrastructure projects such as road improvements in South Road Properties and Tayud Coastal Road in the north have also paved the way for more projects. Developments now reach areas like Consolacion, Liloan, Minglanilla and Naga, among others.

Cebu-based developer Taft Property Venture Development Corp., in particular, sees a stronger market for residential developments in Cebu because of its robust economy.

Taft Property chief operations officer Manuel Colayco Jr. said that despite the tough competition in the market today, there remains a stronger market, especially in the lower-to-middle category, which the industry should maximize.

Colayco said the company is confident about expanding its projects, giving more housing options for the growing Cebu populace.

Business leaders of Cebu have also identified the real estate industry as one of the sunshine industries that fueled the economy of the island this year, aside from the BPO and tourism industries.

Mandaue Chamber of Commerce and Industry (MCCI) president Eric Mendoza said the construction industry alone has helped the local economy in creating jobs.

Cebu Chamber of Commerce and Industry (CCCI) president Samuel Chioson said the real estate industry has created a multiplier effect benefiting other sectors in the economy.

Cebu Business Club president Dondi Joseph said real estate developments in Cebu also signal the continued confidence among investors, a trend which he hopes will continue in 2011.

Society of Cebu Realty Firm president Samuel Lao said four major factor give real estate what is it now increase of ofw remittance, tourism, BPO industry, and population growth.

But for the industry to sustain its growth, the business chambers said a strong public-private partnership should be fostered to maintain the industry’s momentum. To learn more about Cebu real estate updates call (+6332) 3181589 | +639173236123.

Real estate booming in northern town

Liloan Mayor Vincent Franco “Duke” Frasco wants his town to become the retirement and residential haven in northern Cebu.

Frasco said the town’s vibrant real estate industry has helped boost the local economy. He said earnings from real property taxes only averaged P262,000 per year from 2005 to 2007 but when he assumed office, the average annual real property taxes increased to P2.9 million.

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“The surge of residential developments here is evident as population over the last two years has increased. Liloan, so far, has the highest population growth rate at a little over five percent in the entire province,” Frasco said.

He credited the booming real estate industry to the town’s strategic distance to the cities, improved infrastructure and peaceful atmosphere.

“The local income generated by the town is heavily invested on infrastructure such as building and widening roads. Infrastructure is important to lure more investors to pour in investments here,” he said.

Subdivision and Housing Development Authority (SHDA) governor for the Visayas Rey Ralota sees the town’s viability for more residential developments because of its high water deposit and accessibility to the metropolis through the North Coastal Road.

He said many SHDA 7 members see the town as a viable location because of its business-friendly climate. “Liloan is one of the towns in Cebu Province that is organized, as it has streamlined its processes like business permit application,” Ralota said.

He said their organization recognized Liloan as a model local government unit during SHDA 7’s housing fair in October last year.

Frasco also said that the town’s signature product, the sweet flower-shaped biscuit rosquillos, is now sold in the national and international market. He said Titay’s Rosquillos and Delicacies Inc. sends bulk orders to the United States and Australia.

The mayor said other industries that help improve the town are rattan craft, stone craft, shell craft, furniture and pottery. The town also hosts car freshener and sandal manufacturing companies.

Frasco said that what also makes Liloan the right place for investments is that the LGU has maintained a good relationship with the investors through open communication and the extensive effort to make the town a business-friendly community.

“I help in finding solutions whenever investors have problems, like for instance development permits,” he said.