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August 4, 2017

PNR South Rail project to start this year, operate by 2021 – Salceda

NEWS
Finally, the multi-million Philippine National Railway (PNR) South Rail Project would definitely push through and civil works would start anytime this year, according to Albay Rep. Joey Salceda. In an interview today, Thursday, the lawmaker said the project plan was laid down at the recently held meeting with officials of the Department of Transportation (DOTr) and PNR Management which was also participated in by high ranking local officials from Albay, Sorsogon, Camarines Sur and Norte, the four mainland provinces of Bicol. PNR South Rail Project is divided into two projects, the PHP134-billion PNR South Commuter Line (Tutuban-Los Banos) and the PHP151-billion PNR Long haul (Calamba-Bicol). The implementation of the Tutuban to Los Banos segment would be funded by Japan International Cooperation Agency, while the Long haul to Bicol would be available through notice of loan proceeds from China. The PNR South Commuter Line, once implemented, would also connect to the Japan-funded PNR North Railway project worth Php258 million. Salceda said that the PNR South Rail project was designed to be implemented in four segments covering a total of 653 kilometers which include: the Manila to Los Banos section with a length of 72 kilometers; Los Banos to Legazpi City with 406 km; Legazpi City-Matnog, 117 km; and Calamba-Batangas City, 58 km.
(Source: Update Philippines, 27 July 2017)
 
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RESEARCH VIEW
Over the medium term, Colliers sees greater economic contribution from government spending as the current administration ramps up the construction of roads, bridges, and railways. The country's economic managers have pledged that the next five years will be the “golden age of infrastructure” in the Philippines. The government has committed to pour in a total of PHP8.45 trillion (USD172.4 billion) for public projects from 2017 to 2022, or about PHP1.4 trillion (USD 28.6 billion) per year. This is equivalent to an annual infrastructure spending of 5- 7% of GDP, more than double the 2.6% of GDP spent in the past 50 years. The intensified infrastructure development, coupled with the Duterte administration’s decentralization thrust, should expedite the spread of economic growth to more urban areas outside of Metro Manila. The development of these infrastructure projects should unlock land values in the Southern Luzon region, which covers Cavite, Laguna, Batangas, Quezon and the Bicol region.


Seda to open seventh location in Bacolod City

NEWS
Seda Capitol Central in Bacolod City is the newest addition to AyalaLand’s wholly-Filipino chain of hotels. The 154-room hotel is the brand’s second hotel in Visayas and the seventh in the country. Responding to strong economic growth in Western Visayas, the AyalaLand Hotels and Resorts home-grown brand Seda hotels will open its seventh property in the country by October. Seda Capitol Central in Bacolod City will have 154 rooms catering largely to business travelers. By 2021, Bacolod will join the ranks of the top five cities in Visayas and Mindanao with the largest office gross floor areas catering mostly to Business Process Outsourcing firms (BPOs) seeking provincial sites, according to industry studies. Cebu City will take the lead with Davao, Iloilo, Cagayan de Oro and Bacolod following in that order. “Anticipating this economic growth, Seda began establishing properties as early as 2013 in the two key Mindanao cities; in Iloilo, last year; and now, in Bacolod,” according to Al Legaspi, President and Chief Executive Officer of AyalaLand Hotels and Resorts. Seda’s Cebu property is already under development while more new properties are being planned, he added. Other Seda hotels are located in Taguig, Nuvali and Quezon City.
(Source: Manila Bulletin, 26 July 2017)
 
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RESEARCH VIEW

Bacolod is an ideal location for hotel development given the city’s burgeoning BPO sector and the continued growth of its travel and tourism market. Bacolod City is currently ranked as the 97th most competitive outsourcing destination in the world according to global advisory firm Tholons. The expansion of business activities in the city translates to greater demand for quality accommodation. According to the Department of Tourism (DOT) it is also among the most popular locations for domestic tourists with the entire Negros Occidental province cornering 6.9% of the 42 million domestic travelers from April to September 2016. Meanwhile, Seda has been aggressive in opening hotels in and outside of Metro Manila as it fills the demand for affordable but quality accommodation. The demand for three- and four-star hotels should also be fueled by a millennial-dominated workforce that has been driving leisure spending in the country.


Remittances, BPO revenues seen to shield peso

NEWS
The Bank of Tokyo – Mitsubishi UFJ Ltd. (BTMU) said steady remittances and revenues from the business process outsourcing (BPO) sector would continue to stabilize the peso amid the volatile global financial markets. Japan’s largest bank said remittances from Filipinos abroad as well as BPO revenues have contributed steadily to the country’s growth. The 2022 IT-Business Processing Association of the Philippines roadmap sees the IT-business process management sector booking $39 billion worth of revenues and creating 7.6 million additional jobs. BTMU stressed the need to monitor the impact of the policies of US President Donald Trump on the industry but said it was unlikely to derail the trajectory of the positive momentum in the sector. It pointed out BPO revenues offer better support to the peso as its growth pace is at least twice the projected four percent growth in cash remittances this year. The Bangko Sentral ng Pilipinas (BSP) sees remittances hitting a new all-time high of $28 billion this year, four percent higher than last year’s $26.9 billion aided by the strong demand for skilled Filipino workers. Latest data from the central bank showed personal remittances grew 5.2 percent to $12.61 billion in the first five months while cash remittances rose 4.5 percent to $11.35 billion. BTMU said the projected growth in remittances is premised on no disruptions to deployment to the Middle East, especially Qatar, which has seen the government rescind its earlier ban of Filipino workers there.
(Source: The Philippine Star, 31 July 2017)
 
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RESEARCH VIEW

The country’s economy continues to benefit from strong consumer spending, which covers about 70% of the country’s economic output. Consumer spending is perennially lifted by Overseas Filipino Workers' (OFW) remittances and Business Process Outsourcing (BPO) revenues. These two indicators have a direct impact on retail, residential, and tourism spending in the country. We believe that resilient OFW remittances and BPO revenues should sustain strong domestic demand; help shield the Philippine economy from global economic shocks; and provide trickle-down benefits to key segments of the economy, including property. OFW remittances and incomes from the outsourcing sector also raise the country’s GDP per capita or the proxy for individual income. For the first quarter of the year, GDP per capita grew by 4.9% YoY, pushing developers to build more malls and cash in on the emerging online shopping business.

     

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