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Philippine Real Estate Industry Outlook remains healthy, largely unaffected by US Mortgage crisis!
09/04/2008
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The Philippine real estate industry seems to be continuously humming healthily two years after the subprime crisis hit the U.S. real estate and banking industries. Demand for real estate properties in the Philippines had been kept robust by families of overseas Filipino workers, as well as business process outsourcing companies, according to Mr. Danilo Antonio, managing director of Credit Rating and Investors Services Philippines, Inc. |
According to him, the Philippine market has substantially reduced its dependence on the United States and has aggressively marketed to buyers in Asia, Europe and the Middle East . Therefore, demand from certain geographic areas in the world served to counterbalance those from other areas.
Likewise, major property developers in the Philippines have concentrated on the middle-income and low-cost housing segments of the industry, thereby taking advantage of what is seen as "unlimited demand" in these sectors.
This sector's growth has been phenomenal in the past few years and taps the more than 10 million overseas Filipino workers who send home at least US$1 billion in remittances monthly.
Meanwhile, the office segment of the Philippine real estate industry has also been kept chugging, thanks to the strength of the business process outsourcing (BPO) industry.
The BPO boom in the Philippines is currently led by demand for offshore call centers. The industry has been growing by leaps and bounds since 2001 when revenues totaled a mere $120,000 and employed only 100 people.
In 2007, the industry saw revenues of US$4.9 billion and employed 300,000 people in centers mainly in Manila , Cebu, Baguio , Davao and other cities around the country. Overall, the Philippine BPO industry is forecast to earn US$13 billion and employing 900,000 people by the year 2010.
Add to this healthy mix the availability of ready credit lines provided by the country's highly liquid banks.
Observers have noted that local banks are more cautious with their lending and have stronger capital bases that equip them to withstand massive loan defaults.
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