ALI Launches Vermosa, a modern suburban community in the south

Vermosa-1024x520

On September 2, 2015 Ayala Land, Inc. (ALI) marked another milestone as it introduced Vermosa, its 3rd largest masterplanned estate in the country to date.

Considered as another growth center in the South, covering the districts of Dasmariñas and Imus in Cavite, ALI sees Vermosa as a chance to increase business activity that could create more jobs for more people. “We view this as way of becoming a strong partner of Cavite – one of the country’s most industrialized and fastest growing provinces,” said ALI President and CEO Bernard Vincent O. Dy. “Five years from now and even beyond, we believe Vermosa will thrive and offer the people of Cavite new options for an enhanced quality of life,” he added.

Vermosa is a 700-hectare integrated mixed-use development that is positioned to take advantage of robust prospects and stimulate growth in Metro South. Envisioned to be a modern suburban community, it will offer a balanced mix of various mixed-use components – a wide range of residential and retail options, offices, institutional developments, and entertainment centers, all integrated by garden zones, parks and civic spaces that encourage social interaction.

Vermosa will be highly accessible with the newly opened four-kilometer Muntinlupa-Cavite Expressway (MCX), which connects Daanghari to South Luzon Expressway and shortens travel time to Cavite by 30 percent, making Vermosa 55 minutes away from Makati during peak hours. It will also be few minutes away from Manila with the upcoming Cavite-Laguna Expressway (CALAX).

Apart from its proximity and accessibility, another distinct feature of Vermosa will be the Vermosa Sports and Lifestyle Complex (VSLC), to further ALI’s objective of enriching more lives by integrating a healthy and active lifestyle with everyday living.

VSLC will be the first of its kind in the country and will primarily cater to triathlon enthusiasts and other related sports such as marathon, swimming, and cycling. It will have an Olympic-size pool, a 400-meter track and field, and the most advanced and complete sports science laboratory in the country. It will also have the first purpose-built mountain bike skills track in the Philippines and a motocross track designed by one of the country’s top motocross athlete, Glenn Aguilar. And to complete its health and lifestyle amenities, Vermosa will have a 10,000-square meter retail center that will feature various sports shops as well as a wide array of healthy dining options. All these amenities will be managed by industry professionals and will be open to the public.

http://www.ayalaland.com.ph/2015/09/07/ali-launches-vermosa-a-modern-suburban-community-in-the-south/

for more information on Vermosa, send us an email.

 

Top 10 Most Prolific REAL ESTATE DEVELOPERS IN THE PHILIPPINES

BY

In all its splendor, mighty structures will astound you, no doubt. Whether horizontal or vertical, it doesn’t matter. Looking at them, you’ll be amazed how so complex an undertaking started from within so small a space between the ears: the mind of the builders.

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OLYMPUS DIGITAL CAMERA

Most definitely, construction is no walk in the park. Try building a nifty sleeping quarters for your dog and you’d be lucky if you don’t get your hands swollen with inexperience and bad hammering. And we’re not even sure your finished doghouse is going to stand the rain – much less the discriminating tastes of your furry companion. How much more exacting is building gigantic projects that are meant to last a lifetime and beyond. Indeed. Insofar as structures are concerned, time and its ravages are the ultimate litmus test. Think mega-structures withering even the strongest of storms, or withstanding even the most powerful earthquakes.

Brave gentlemen, fine ladies, every Juan, it’s with great pride that I present to you 10 of the most prolific real estate developers that graced the Philippine archipelago:

#10: Filinvest Land
Filinvest Land
Filinvest has certainly grown from its mid-income residential subdivision offering in Cebu. From there, the Gotianun-led company has become one of the most diversified realty developer of the country as showcased in its most well known project Filinvest City in Alabang, Metro Manila. As of April 2014, the company has a market capitalization of $873 million showing its vast financial muscle.

Recent Projects:

•    Linear Makati
•    2-tower Beaufort in the Fort
•    Vinia Residences in QC

#9: Shang Properties
Shang Properties
Their name may not register much, not until you realize they are the property development arm of the billionaire Kuok family, owner of the ever-successful 5-star hotel chain, Shangri-La. The company is looking good, steadily earning from its property portfolio (e.g., Shangri-La Plaza along EDSA). Early 2013 the company rolled out an immense PhP35.7 billion investment for its three ongoing developments.

Recent Projects:

•    Shang Salcedo Place
•    One Shangri-La Place
•    Shangri-La in The Fort

#8: Century Properties Group, Inc.
Century Properties Group, Inc.
With a 27-year pedigree in real estate and property management, Century is no pushover in the industry. With more than 50 hot-ticket properties under its wing, the Antonio-run company saw a 91% net income increase in the first half of 2012 bringing in a profit of PhP944 million on that period alone.

Recent Projects:

•    3.4 hectare (high-rise) Century City
•    Milano Residences
•    Century City Mall
•    Mandaluyong’sAcqua Private Residences

#7: Eton Properties Philippines, Inc.
Eton Properties Philippines, Inc.
Eton may only be a yearling with but 6 years experience in the industry, but it has not stopped the company to be part of the top 10 property developer awardees in the country awarded by the Hong Kong-based Business Continuity Institute (BCI) Asia, Inc. Lending on vast experiences of 30 years from its foreign affiliates in Hong Kong and China, Eton has been a force to reckon with since it changed its business in 2007 from an oil exploration and mineral development company to real estate development. Its trust is more into residential mixed with commercial targeting IT and BPO companies.

Recent Projects:

•    Eton Centris
•    Eton Cyberpod Corinthian
•    Eton City

#6: Federal Land, Inc.
Federal Land, Inc.
One of the oldest in the industry Federal Land has certainly a good name to bank upon. Starting out in 1972 to cater mainly to the residential needs of the Filipino-Chinese communities in the Binondo district, this George Ty-founded company has certainly come a long way and has under its wings develop hotels and notable commercial projects (e.g., Phil. AXA Life Center).

Recent Projects:

•    PhP12 billion mixed-use project in The Fort
•    Grand Hyatt Hotel
•    The Grand Midori

#5: Rockwell Land, Inc.
Rockwell-Land
A creation of the Lopez Group of Companies in 1995, Rockwell Land Inc. has quickly gained a strong reputation as a premier real estate developer of the country. It has performed well in the Philippine Stock Exchange (PSE) reaching a 12-week high and netting a truly enviable PhP 1.1 Billion in profits in 2012 alone.

Recent Projects:

•    15.5 hectare Rockwell Center Makati
•    50-story Edades Tower
•    Lopez Tower and Museum

#4: Robinsons Land Corporation
Robinsons Land Corporation
Not only has Robisons Land Corporation (RLC) diversified its portfolio, it has made sure that it did not leave quality of operation behind. On a 2012 real estate poll  of over 130 leading equity analysts of major investment houses in the As-Pac region, Euromoney Magazine cited RLC as the best managed company in Asia. Important categories where it stand out is in strategy, investor relations and management accessibility. Robinsons outperformed all 207 Asian companies nominated.

Recent Projects:

•    Axis Residences, 2 tower 42-storey development
•    Cyberspace Alpha and Cyberspace Beta
•    Amisa

#3: Megaworld Corporation
Megaworld Corporation
Tycoon Andrew Tan certainly made his mark on the world map being recognized as the country’s top residential condominium developer. Colliers     International, a leading global property consultan, cited Megaworld as the largest developer of residential condos when you talk about number of units built in the span of the years 2010 up to 2016. Added to that, another foremost property consultant CB Richard Ellis handed Megaworld basically the same recognition for being able to launch over 40,000 units from the period 2001 to 2011.

Recent Projects:

•    Eastwood City township project with its cyberpark, residential condo towers, and mall
•    McKinley Hill
•    Forbes Town Center

#2: SM Land, Inc.
SM Land, Inc.
Putting a premium on building hotels, malls and medium-rise projects aimed for their targeted market: homebuyers based overseas, SM Land, Inc. through its residential arm SM Development Corporation (SMDC) has posted huge earnings of PhP 3.3 billion in 2012 alone. And that’s just on the third quarter of the year. No wonder the company has been included in Forbes Asia’s 200 “Best under a Billion” companies in Asia.

Recent Projects:
•    Mall of Asia Arena
•    SM Lanang
•    Costa del Hamilo’s Pico de Loro Cove
•    Tagaytay Highlands

#1: Ayala Land, Inc.
ayala-land
For sheer size and diversity of projects, it’s hard not to give a hats off to Ayala Land, Inc. or ALI. In 2012 alone it launched a total of 67 projects that amounted to PhP 90 billion in 2012 alone netting a profit of PhP 6.6 billion in the first three quarters of that year. Though initially into high-end construction the real estate behemoth has explored  mass housing and today no developer may have such a full spectrum of commercial and residential development.

Recent Projects:

•    PhP20-billion development of the Sta. Ana race track
•    74-hectare Food Terminal Inc. in Taguig
•    Greenbelt in Makati
•    UP-Ayala Techno hub (Commonwealth, Quezon City)

So, there you have it folks. Topnotch real estate builders in the country. It’s definitely growing bigger, taller, wider for the Philippine scene.

http://www.topten.ph/2014/09/13/top-10-prolific-real-estate-developers-philippines/

PH real estate to grow in 2016

BPO sector, low cost housing to help fuel surge

posted January 15, 2016 at 07:10 pm
by Roger M. Garcia
http://www.thestandard.com.ph/mobile/article/196889

The year 2016 will be a very challenging yet exciting year for the country’s property sector as real estate developments shift its focus on catering to the specific needs of investors, as well as end users.

The challenge lies on several factors such as the current “over supply” of inventories as property investments and developments flooded the market over the past few years.

Andy Manalac, former chairman of the president and Chairman of the National Real Estate Association (NREA) one of the most active executives in the field of real estate sales and marketing, remains optimistic despite persistent predictions of some economic experts about the impending glut in the residential property section of the industry.

 

2016_jan16_prop1.jpgMore active. Major players will explore affordable horizontal developments and strategic commercial infrastructures as demands for low-cost housing continue to swell all over the country.

 

“Yes, there may be some locations that may have more than enough supply of residential units and may take a few years to have these absorbed by actual occupants, there are still a lot of areas not only in Metro Manila but actually all over the country that presents a lot of potential”, he said.

Manalac told The Standard that investors are currently starting to realize that the actively growing market for tenants to lease their units are the BPO workers and no longer limited to the expats, although they are still the ones patronizing the high-end and luxury condominium projects.

The industry is now generating almost the equal amount of dollars as our OFW and the number of their employees is multiplying faster than originally expected, he explained.

Manalac, a prime mover of “Think Invest”, also stressed that these new breed of condo dwellers are now appreciating the convenience of living within walking distance from their place of work.

“Now, there are actually projects where these workers can live, work and play within the same building thus making traffic, flooding and security concerns practically irrelevant” he said.

Developers will also be offering more practical projects with lesser amenities to keep not only the selling price low but the monthly dues as well.

Other industry experts said that major players will definitely be more active this year in affordable horizontal developments and even low-cost housing all over the country.

Rick Santos, founder, Chairman and CEO of leading real estate advisor C.B. Richard Ellis (CBRE) Philippines supported this claim as he cited that “from Clark up north to Davao City down south, the playing field is becoming more exciting especially for the BPO sector which will sustain the momentum and drive for the coming years”

“We are very positive on the way things are going for the real estate market,” he said. “As we have noted before, the transformation of areas outside of the central business districts are continuously creating more investment opportunities.”

On the residential condominium projects that continue to mushroom particularly in Metro Manila other industry players shared that there will be a lot of RFO (ready for occupancy) units that will be available in the market not only from resellers but also from the developer’s inventory as well.

But despite the supposed “over-production” the residential condominium will still remain “very attractive” to foreign investors particularly to those who either have the funds to pay in cash, or are qualified to get housing loans.

Low Cost housing

Demand for low cost and socialized housing is actually increasing faster than what the Developers can deliver. Thus, expect more major players, especially the top developers, to have more projects in this sector while they are slowing down on the middle to high-end developments.

“The demand is so big and still growing that it will be very difficult for them to catch up even with their combined production. However, buyers’ financing for these will be another story” Manalac said.

For the office spaces, developers will remain prudent in their approach and pre-leasing has been proven to be a working formula that has kept the vacancy rates at very low levels. But from all indications, the demand for office spaces, mainly from the Offshoring & Outsourcing companies are expected to continue to rise.

The current and forecasted strengthening of the US Dollar may be another motivation for our OFWs to invest in Philippine properties.

Challenges

NEDA chief Arsenio Balisacan despite predicting “a steady and continuing growth” for the country’s real estate sector, at the same time pointed out late last year that “major challenges” needs to be addressed to maximize the property sectors full potential.

Weak public infrastructure, low property market transparency, and restrictive ownership rules continues to hound the country’s property sector’s otherwise steady and upward growth trend, Balicasan said.

The socio-economic chief has said that “there is a constant need for the infrastructure system to keep up with rising demands in the “fast-growing economy, especially these days as new property investments flood the market.”

He said that stable laws and regulations surrounding the investments of   developers and real property investors remain wanting. And as a result, property buyers face high transaction costs, petty corruption and red tape, and substandard building practices.”

Balisacan also cited the country’s “under-developed” financial markets just like a few other countries in South East Asia.

Forecast

Balisacan believes that the growing population of the country’s young professionals will be a source of future demand for residential properties, “as population projections point to an increasing share of the population aged 30-49 in the next couple of decades.”

“The property sector in the Philippines is at the forefront of Philippine growth in the medium and long term.  Rapid urbanization plus the accompanying rise of the residential sector are key sources of growth for the property market,” he added.

 

 

 

6 ways to earn from rental properties

Buy and hold, furnish your property with a single theme, and take lots of beautiful photos

CARL

CARL DY, President of Spectrum Investments

MANILA, Philippines – A condominium unit with triangular shape which is considered unlucky in feng shui was put up for sale. It was ill-fitted with mismatched pieces of furniture. It was cramped further because of too many items scattered all over the place. The only view from the rickety window was another building, hardly appealing at all.

No one was interested in buying or renting it. Since it was uninhabited and was on sale for more than a year, the unit aged further that upon inspection, the wife of Carl Dy, a sales director for Ayala Land Sales Inc., had to step back since the smell was intolerable. While his wife did not exactly share his belief that the unit could use some makeover, Carl went ahead and bought it.

The unit was eventually purchased in 2009 for P1.2 million and renovated for P300,000,00. To date, the tenant has renewed for the 4th year, renting P17,000.00 monthly.

Find out how Carl made that happen and get tips on investing in rental properties, which he shared with the audience of the Money Summit and Wealth Expo held at the SMX Convention Center, Pasay City on July 13:

1. Identify your market

Buy and hold. Property investing is a marathon, not a sprint, Carl said. He also personally thinks that it is best to buy and hold on to a property and earn from the rental income. “Work as hard in your job and earn as much as you can. Buy a property and hold on to it. Otherwise, it is like selling your goose that lay the golden egg. Sell only if you really, really need the money.”

Study your neighborhood. Once you spotted a property and eventually acquire it, study your community as this is your immediate market. For example, a 3-bedroom condominium unit is not exactly saleable to students living in the university belt: its cost will not be within their budget.

Study establishments around you. Check those establishments one ride away from your property to see what is around. Leverage them to help make your property saleable.

Know your product. One valuable lesson Carl learned is that not all properties are equal. What might be appealing to a prospective buyer might not be to another, like how Carl and his wife differed in opinion over that condominium unit. He knew the potential it had. It now brings in a comfortable rate of return of 13% and net of 10%.

“Real estate is volatile but if you know how to play the game, it is a steady investment,” Carl said.

Do not overprice. “Property investing is best played long-term. Your price has to be fair with your tenant, especially if you want long-staying tenants. As much as I can keep my rent at the same price, I keep it. That way, I also keep a long-staying tenant,” Carl said.

2. Furnish your unit

Have a single theme. Thinking that the unit would appeal to Makati yuppies working at the central business district (CBD), Carl renovated the unit and jazzed it up with solid, complementing colors, fitted it with matching furniture from the sofa to the bed to the bar sink. He had the toilet and bath installed with glass partition and a hot-and-cold shower.

Do not be ordinary. You must have a unique selling proposition and highlight that in renting out your property. In Carl’s case, that the condominium was located in Makati CBD was already its selling point, but he had to complement that fact with design and furnishing to make it more appealing — and it did.

Create lots of storage. The tiny storage room in that unit now has more space when mounted with shelves. The entire unit also had more storage with those creatively fitted beams and counters, a breather and space-saving feature of the transformed unit. In condominium units that are by nature small, an extra storage is something to be thankful for, Carl said.

Do not buy cheap and flimsy furniture. Good properties need significant money to purchase, and beautifying and maintaining them need more money. In the long run, it can be a good source of cash flow as well as capital appreciation.

Just like in Carl’s case study, the transformed unit has been bringing in good income from its long-staying renter. “The renter is happy. I am happy. It is a win-win thing,” Carl said.

3. Attract renters

Take beautiful photos. Carl advised the use of the HDR (high dynamic range) feature of your digital camera or smartphone camera to take photos of your rental property. Take also pictures with lights on to emphasize the interiors, and lights off for the view to help make your rental property more attractive even in photos alone.

Create a sales pitch. Of course, the stunning visuals must be complemented with an effective sales pitch. You must be ready with a short, direct-to-the-point presentation or an elevator pitch highlighting your rental property’s unique and value selling features. Above all, be prepared to answer questions, and respond honestly than switch to an unconvincing hard sell.

Use media. Carl personally prefers the traditional media, like placing classified ads in the newspaper as this is easier for prospective renters with every detail having been already printed. With online ads, renters have to search using keywords until they stumble on your ad. However, Carl also promotes the use of social media and those sites dedicated to home buying, renting or property selling and investing to advertise your rental property to reach more prospective renters.

Send out direct mailers. If your rental property is located in nearby offices, send direct mailers to their HR departments and ask them to spread the word that you have an available unit. Carl said such selling strategy works because those departments know who among their employees are looking around for a nearby place to rent.

Make an open house. “Send invites to the people in your building since they are your first market… they may know a prospective renter. Invite them to view your place. If there are those who come and are interested, you create an urgency,” Carl said.

4. Stage your unit

Make sure the details that are easily seen or are particular to a prospective renter are taken care of. Keep the entrance clean. Leave no broken items unfixed. De-clutter. Let the lights in. Have a clean toilet and bath, which is a come-on for prospective female renters. “Do not have a bad-smelling unit. Go to the source of it and fix it or get rid of it,” Carl stressed.

Hold a viewing or an open house at night. This is also a good approach as it helps create a mood. Carl adds that if he has the time, he personally hosts the open house which helps create personal connection between him and the prospective renter.

5. Protect yourself

Have a detailed lease of contract. Rental properties as a business generally need lesser man hours to look after. There are also lesser things to worry about. The lease of contract must clearly state the details and conditions involved in renting your property and that the renter understands them to help avoid headaches in the future.

The term and amount of lease, advance rent and security deposit, utility payment, among others, are details that must be fully stipulated, especially if there are violations and penalties to be included such as misuse in terms of improvements, alterations or botched repairs, use of hazardous or prohibitive materials, allowed number of persons in the unit, and abandonment of property.

Screen your tenants. Get referrals to help you check those prospective renters. Carl said he does not mind if his tenants are fond of cooking strong-smelling food or have kids who like writing or drawing on the wall. “As long as they are good-paying and they are not into any illegal activities, I’m OK,” Carl said.

6. Take care of your tenant

Treat each tenant as your best customer, Carl stressed. To welcome their tenants, Carl sends them a gift basket containing no-cook foods like cup noodles or rolls of toilet paper, essentials they need until they’ve completely moved in and settled down.

Make a directory. List the nearest convenience stores, supermarkets, laundry shops, and the likes. This information is helpful especially for expat tenants, who prefer to stay in the central business district where it is easy for them to locate establishments.

Stay within reach. If they call you late at night inquiring about something or complaining over a thing, answer it. Do not be hard to reach, especially with those expats who are new in the country. You are not only their lessor, but also their guide, Carl emphasized.

Think about your tenant’s comfort. Simply put, “take care of your tenants and they will take care of you,” Carl emphasized. – Rappler.com

http://www.rappler.com/business/personal-finance/34909-6-ways-to-earn-from-rental-properties
Lynda C. Corpuz
Published 7:00 AM, August 03, 2013
Updated 12:28 AM, January 15, 2016

Ayala Land set to launch resort project in Sicogon Island

MANILA – Ayala Land is set to launch a resort project in Sicogon Island in Iloilo within the first half of the year.

The 1,100-hectare Sicogon Island Tourism Estate project involves the development of a resort town center, hotels and resorts, as well as commercial and residential establishments, supported by an on-site airstrip.

The runway’s groundbreaking is scheduled for the second half of the year while test flights to Sicogon are being targeted for the first quarter of 2017.

“The initial development will concentrate on building the airport and runway, to ensure accessibility to the island,” said Jose Emmanuel Jalandoni, Ayala Land senior vice president and group head of commercial business.

“The 1.3-kilometer runway will allow immediate access from Manila and Cebu to the island development,” he added.

The project, a joint venture between Ayala Land and Sicogon Development Corporation (SIDECO), aims to drive economic progress in Western Visayas and the entire region as it serves as a tourism hub for nearby destinations like Gigantes, Bantayan and Concepcion islands.

Ayala Land estimates that the development will provide 20,000 jobs, and generate approximately P1 billion in earnings for the community through business opportunities from the retail and commercial establishments.

Ayala Land, SIDECO and the Federation of Sicogon Island Farmers and Fisherfolk Association (FESIFFA) signed a framework agreement in 2014 to pave the way for the sustainable development of Sicogon Island.

“We strongly believe and hope that poverty alleviation will be achieved through tourism projects. These will give us various job opportunities and help us improve farming and fishing methods,” said Raul Ramos, president of FESIFFA.

http://newsmobile.abs-cbn.com/business/03/03/16/ayala-land-set-to-launch-resort-project-in-sicogon-island/

Henry Sy donates P400M BGC building to UP

henry sy

SM Prime president Hans Sy turns over Henry Sy Sr. Hall to UP president Alfredo Pascual

THE COUNTRY’S premier state university has a sleek new campus at the heart of the bustling central business district – University of the Philippines Bonifacio Global City – built at a cost of around P400 million and donated by the SM conglomerate led by tycoon Henry Sy Sr.

The nine-level UP BGC campus building, which is ready to start offering postgraduate courses in the coming school year, is the UP system’s 17th campus in the country. This is also the first donation by the country’s largest conglomerate SM Investments Corp. (SMIC) to the UP system, even if none of the SM patriarch’s children or grandchildren had studied in this university.

“It is with great pride that we turn over today the Henry Sy Sr. Hall to the highly esteemed University of the Philippines here at BGC. The building carries no less than my father’s name whose prime advocacy is education. He worked hard and sacrificed so much early in his life just to be able to receive formal education. He wants the same for every Filipino,” said SM Prime Holdings president Hans Sy when he turned over the facility to the UP Professional Schools on Tuesday.

UP president Alfredo Pascual received the new campus building – which was built on a land donated by the state-owned Bases Conversion Development Authority – on behalf of the UP system.

The new satellite campus spans a total area of 12,000 square meters and will house 29 classrooms, three laboratories, a study area called learning commons, faculty lounges, an auditorium, a moot court or a venue for simulated court proceedings for law students, a multi-purpose hall, discussion rooms, office spaces and an executive lounge. It also comes with a multi-level basement parking area.

The campus is located at BGC’s 32nd street and close to the C-5 highway. It is right next to the International School.

Postgraduate classes will be held at the new campus. The UP College of Law will offer an evening Juris Doctor program. The Cesar E. Virata School of Business will offer MBA and DBA classes starting 2017.

Other UP Diliman units that will offer postgraduate studies at UP BGC include: College of of Engineering; School of Statistics; School of Urban and Regional Planning; School of Labor and Industrial Relations; and College of Architecture.

Read more: http://business.inquirer.net/207814/henry-sy-donates-p400m-bgc-campus-to-up#ixzz41fFUGuuO

PH: The economy in 2016: Transition or follow through?

eagle-watch

By Alvin P. Ang

WITH less than 100 days before election day, Eagle Watch held its first economic briefing for 2016 on February 2 at the Ateneo Rockwell Campus. Together with Rose Fres Fausto, who gave her proposed guidelines on choosing the right candidates, we provided the economic direction for this year and the expectations after the elections. Below are the gist of our analysis.

We see the economy expanding within a range of 6.3 percent to 6.5 percent full year. This is due to our expectations that the first half of the year will be driven strongly by election spending being translated into consumer spending. This will be supported by the momentum of public and private infrastructure. Durable equipment growth and the rebound of imports in the second half of 2015 are expected to go online to help boost manufacturing and exports this year. This is despite the consensus view that agriculture will be a drag to overall growth because of the worst El Niño. The extended dry season will be an opportunity for construction and infrastructure to be sustained, thereby extending the highest level of infrastructure in the last five years. The second half, meanwhile, is seen slowing down as the new administration faces adjustment. However, we also see that the effects of the El Niño will start to taper off, allowing agriculture to positively contribute to the adjustment slack.

Consumption, comprising about 70 percent of expenditure contribution to GDP, will remain as the key driver of growth.  For the full year, we expect that consumption growth will not fall below 6 percent. Our forecast of weakening of remittance growth to 2.75 percent does not mean slowing consumption. Remittance per capita is set to slow down because of the changes in the structure of overseas Filipino workers (OFWs). More lower-skilled with lower pay now dominate the OFWs. However, in terms of actual number, there are now more lower-income families receiving remittances. Thus, we foresee this as also contributing to consumption growth.  Furthermore, we are looking at the compensatory effect the sustained increase in business-process outsourcing (BPO) can contribute. The BPO sector is still likely to increase revenues by at least 10 percent this year. It could match the value of remittances in the next three to five years. It could be made faster if the share of higher value components, such as animation and the creative industries increase, as well. On the income side, increased, consumption will support growth in wholesale and retail trade, finance and real estate.

On the external side, global challenges caused by the weakness of the Chinese economy has led to an overall weakness in emerging-market economies, including the Philippines.  This is being reflected in the weak export performance in 2015, as the country is connected with the global supply chain, especially in electronics.  On the financial side, the weakness of China has been reflected in the downturn of the  local stock market.  From highs of close to 8,000, the market has now retreated to about 6,200. As it is dominated by foreign trades, the weakness of the market has also translated to the weakening of the peso. With the decline of the market of about 4.2 percent from 2015, the peso also reflected a decline of 5 percent.  Nonetheless, we see the fundamental value of the peso to adjust to an average of about 48.50 to the dollar for the year. This is taking the view that the strong US dollar will continue to contribute to the peso’s general weakening.  Meanwhile, an approach in volatile markets is to look at the listed firms’ net-income growth and GDP growth. Our investigation reveal that the average net-income growth of listed firms hem closely to the average GDP growth of about 6.2 percent. It suggests that current fundamental valuations are consistent with GDP growth. Hence, since we are expecting a higher GDP growth, part of it should be contributed by the listed firms.

Under these conditions, the mid-year turnover of the government will need to have serious thoughts on how to safeguard economic gains of the Aquino administration. The forecasted numbers assume that the new government will take a follow through stand. This is likely because we see the achievement of the investment grade status and the stable outlook the country has received under this administration are pressures for the coming government to ensure the parameters that have led to these are maintained or made better.  To do this, all the candidates must lay down clearly a short-term and a medium-term priority list of economic policies. For the short term or within the first year of administration, candidates must spell out clearly their policies and programs to manage and respond to the international financial markets, the effects of El Niño and a management plan to solve Metro Manila traffic decisively.  In the medium term, clear actions are needed on how to increase local manufacturing and agricultural links to the global supply chain; making growth connect with the poor through significant improvements in agricultural productivity; and continued investments in social protection to further improve health and education.  The economic issues in this election must go beyond the usual inclusivity, anticorruption and antipoverty messages to ones that look specifically on the external, environmental and governmental demands in the next 25 years.

 

The economy in 2016: Transition or follow through?

PH, Japan seal P97-B commuter rail project

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BANQUET FIT FOR EMPEROR President Aquino addresses Emperor Akihito and Empress Michiko at a state dinner on Thursday in Malacañang’s Ceremonial Hall. With them are the President’s sister Pinky Aquino-Abellada and opposition presidential candidate Vice President Jejomar Binay. LYN RILLON

The initial phase of the project involves a 38-kilometer elevated commuter train line from Tutuban, Manila,  to Malolos, Bulacan, and its construction is set to proceed following a landmark 241.99-billion-yen (P97,376,145,568.86) financing deal that was sealed last November with the Japan International Cooperation Agency (Jica).

As its name suggests, the NSCR project aims to spur development in provinces north and south of Metro Manila, the capital region that is home to about 12 million people and powers over a third of the country’s economic output.

With the growing number of cars and the inefficiency of existing mass transit systems, Metro Manila has been suffering from the effects of urban congestion. Jica said this was costing road users about P2.4 billion per day that would swell to P6 billion daily by 2030.

This is where massive train projects like the NSCR, with its ability to efficiently move large numbers of passengers, enter the picture.

Specifically, the NSCR hopes to revive a once robust Luzon railway system that in the 1970s spanned 900 km linking La Union province in the north to Legazpi City in Albay province in the south.

Jica said Luzon’s railway network had expanded only by 5 km over the last decade despite rapid growth in Metro Manila and nearby provinces.

The bigger portion is the NSCR’s south line, which involves about 653 km of railway lines, mainly a Tutuban to Legazpi City long-haul route that was suspended in 2012 due to typhoon damage to bridges along its alignment.

Part of the NSCR project is a 58-km line from Calamba, Laguna, to Batangas City, Batangas, and a 117-km line from Legazpi City to Matnog, Sorsogon.

The south line will be funded via a public private-partnership scheme. But given its massive size, it is unlikely to be auctioned off within President Aquino’s term that ends in the middle of this year.

 

Japanese loan

The Manila-Bulacan northern line, which was closed in 1984, is being funded by a Japanese overseas development assistance loan. It can now proceed as its financing is already in place.

The loan carries an annual interest rate of 0.1 percent and 0.01 percent for consulting services over a period of 40 years with a 10-year grace period, according to Jica.

Transportation Secretary Joseph Abaya said construction of the Manila-Bulacan line would start by early 2017 and the project would be finished in the latter part of 2020.

The line  is expected to have a total of 15 stations and demand is projected at about 340,000 passengers per day once it opens.

Abaya said the Manila-Bulacan line would cut the usual multi-hour trip to about 35 minutes.

“For a mega city like Metro Manila, a consequence of a growing economy is the growing capacity of our people to own their own vehicles. Clearly, with our traffic, that is not the way to go. And the solution to that natural tendency is to develop mass transit systems,” Abaya said in a previous interview.

He said that the use of public transportation was still dominant, or 80 percent, against the 20 percent for private vehicles. But these were mainly through “smaller modes” like jeepneys, tricycles and UV Express units.

The Jica and National Economic and Development Authority (Neda) highlighted the NSCR’s importance in a joint study that was finished in 2014.

Dream plan

The Jica-Neda report, which outlined an infrastructure “dream plan” of railways, roads, airports and ports valued at P2.6 trillion up to 2030, said the NSCR was “urgently needed.”

Its connectivity to Metro Manila’s three train lines (Metro Rail Transit Line 3 and the Light Rail Transit Line 1 and Line 2) and planned expansion projects would also cut congestion significantly.

The Jica-Neda study said once all projects were running, ridership would increase from about 1.5 million in 2012 to

7.4 million in 2030.

Moreover, the study projected that 2.1 million passengers from Bulacan, Rizal, Laguna and Cavite would benefit from the system.

Once all train lines are physically connected and once a common fare is applied, ridership will increase 20 percent, the study said.

“With the mass transit network, Metro Manila can address 41 percent of the total travel demand and become one of the successful mass-transit cities in the world,”  the study said.

 

03:24 AM January 29th, 2016

http://business.inquirer.net/206288/ph-japan-seal-p97-b-commuter-rail-project