Philippines real estate under the new administration
The new President unveiled key economic measures that may drive the sustained recovery of the real estate market in the Philippines.
The first half of 2022 saw the gradual improvement of the real estate landscape in Metro Manila. Office leasing volumes continued to accelerate, resulting in lower vacancy levels despite new supply. The retail market recorded more store openings than store closures which drove vacancy downwards. Residential sales continue to move sideways, with the pre-selling segment gaining traction while hotel occupancy normalised with the usual lean season. As the market is showing early signs of recovery, it is important to establish a strong national economic roadmap that will aid the positive trajectory of the sector.
The newly appointed President Ferdinand “Bongbong” R. Marcos’ delivered his first State of the Nation Address in July 2022. The address revolved around platforms and measures prioritised for the recovery and further improvement of the country’s economy. Specifically, the President announced the continuation of key economic reforms spearheaded by the previous administration, including the CREATE Law, Public Service Act, and Foreign Investment Act, to create a more conducive investment climate investors.
In addition, tax incentives will support the growth and development of ecozones outside Metro Manila, which may drive decentralisation. The continuation of infrastructure projects was also cited as a key focus of the new administration. Upgrading of existing airports, construction of new international airports, rail transportation development, and road improvements to and within key cities like Cebu, Davao, and El Nido are pushed to support the tourism sector. The President also cited the prioritisation and modernisation of railway projects and other transportation projects, which may aid in unlocking land values outside Metro Manila with improved mobility and commercialisation.
Moreover, the government will do more energy research focusing on traditional and renewable resources. This brings forward the focus on sustainability, specifically for the built environment.
“No more lockdowns!” This statement was one of the key directives issued by the President during his address. The key steps to solidify this promise are the development of additional hospital facilities and the proposed establishment of a vaccine institute. Lowered restrictions and improved mobility are anticipated with this directive, which may likely result in a further spurring of economic activities that may positively impact the recovery of the real estate sector.
The outlook of the real estate market in the Philippines seems to be bright as we anticipate a further acceleration in the recovery once these measures have materialised.