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September 15, 2017

Thailand-based Hop Inn opens second hotel in Poblacion, Makati City

NEWS
Seven months after Hop Inn opened its first hotel in the Philippines, the The Thailand-based hotel group is set to pursue its expansion plan with the recent opening of its second branch in Makati City. The company behind the growing hotel brand, Erawan Group Public Company Limited, opened its first hotel called Hop Inn Hotel Ermita on December 1, 2016. With 35 years of vast experience in developing international five-star hotels such as the Grand Hyatt and JW Marriott, among others, guests will enjoy the hotel’s affordably priced rooms, comfortable amenities, and friendly service. The new Hop Inn Hotel Makati is in rising arts and gastronomy hub Poblacion and is just 15 to 20 minutes away from Makati City’s Central Business District. The hotel follows its mother company’s Four Pillars Promise: Cleanliness, Convenience, Comfort, and Security. The new property has 144 air-conditioned rooms each with free high-speed Wi-Fi, cable TV, hot and cold power shower, a workstation, a hair dryer, and other room extras.
(Source: Interaksyon, 11 September 2017)
 
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RESEARCH VIEW
Colliers has observed the proliferation of two to four star hotels across Metro Manila given the sustained influx of tourists from the country’s traditional markets such as South Korea, Japan, and China. Colliers believes that the rising popularity of “staycations” in the country’s capital as well as the continued dominance of millennials among domestic tourists should drive the demand for more affordable hotels. The growth in domestic tourism is being fueled by Filipinos aged 15 to 34, accounting for more than half of the 42.1 million domestic travelers recorded from April to September 2016. According to the Tourism Department the local travelers made a total of 91.2 million trips during the period under review. Colliers is optimistic that aside from millennial-driven spending, rising purchasing power, and growing popularity of “staycations”, domestic tourism should also be driven by the improvement of road networks in the countryside which should result in the opening of new and exciting destinations. These emerging tourist hubs, in turn, should become viable sites for hotel development.


Govt infra, capital spending surges 25%

NEWS
Infrastructure and other capital spending rose sharply in July, the Budget department said, with government resources having been used for priority public works and health projects, armed forces modernization and right-of-way acquisitions. Dat released during the weekend put spending at P48.4 billion during the month, up 25 percent compared to the P38.7 billion recorded a year earlier. Year to date, expenditures grew by 11.1 percent to P297.5 billion from P267.7 billion in the corresponding period last year, the agency said. In an assessment, the Budget department attributed the growth in capital expenditures to the implementation of flood control, road improvement and road widening projects by the Public Works department. The rise was also traced to the acquisition of naval and air assets by the Defense department under the Armed Force of the Philippines modernization program. Also noted were equipment purchases and other infrastructure outlays under the Health department’s Health Facilities Enhancement Program and payments for transport infrastructure projects such as right-of-way acquisition for the Southwest Intregrated Transport System project and completed civil works for the Light Rail Transit-2 East Extension project. As this developed, Singapore-based bank DBS said the Philippines’ infrastructure push could allow the country to remain one of the fastest-growing Asian economies. “We expect the country’s economic fundamentals to remain strong, with infrastructure at the forefront of growth. Save for some delays, infrastructure spending should lift the economic growth in Philippines in the longer run,” DBS said.
(Source: The Manila Times, 11 September 2017)
 
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RESEARCH VIEW

The Philippine economy, as measured by real gross domestic product (GDP), accelerated by 6.5% in 2Q 2017. This is slightly faster than the 6.4% logged in 1Q 2017 but slower than the 7.1% recorded in the same period last year. The growth was partly driven by higher public infrastructure spending from April to June of this year. Moving forward, much of the country's growth will hinge on ramped-up infrastructure spending, which should support the current administration's commitment to build crucial projects throughout the country. The ushering in of the "golden age of infrastructure" also lends support to the government's decentralization push which should unlock land values in areas outside of Metro Manila and stimulate business activities in the countryside. Provinces such as Bulacan, Pampanga, Cavite, Laguna, Cebu, and Davao are among the areas that will benefit from the Duterte administration’s ambitious infrastructure push. Infrastructure implementation coupled with decentralization should spur the growth of office, residential, retail, industrial, and hotel & leisure segments in the countryside. Hence, we recommend that developers zero in on the thriving opportunities outside of the country's capital.



Outlook on industrial output positive — Moody’s

NEWS
The outlook on industrial production remains positive with the expected boost from the government’s robust capital expenditures, especially on infrastructure, Moody’s Analytics, a division of Moody’s Corp., said in a report over the weekend. “While industrial production growth has eased through the first half of 2017, the medium-term outlook for the Philippines’ manufacturing sector remains bright. In large part, that reflects a likely pick-up in capital expenditure, which should provide a boost to local manufacturing,” Moody’s said. “Domestic demand also remains on a solid footing, keeping food production buoyant, the largest component of the industrial production survey,” Moody’s said. The Duterte administration aims to increase its fiscal expenditures on infrastructure projects under its ambitious “Build, Build, Build” program to further boost the economy, create more jobs and stimulate further economic activities nationwide. The government aims to build airports, seaports, roads, highways, bridges, railways, and even a subway in Metro Manila to alleviate traffic congestion in the capital region. Finance Secretary Carlos Dominguez III earlier said the “Build, Build, Build” program would create multiplier effects. Moody’s, however, expects the volume of industrial production in August 2017 to ease to 7.3 percent from 8.1 percent a month ago.
(Source: Manila Standard, 10 September 2017)
 
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RESEARCH VIEW

Colliers sees manufacturing investments sustaining the country’s economic growth and this should support the growth of the country’s industrial sector and the absorption of space within the country’s industrial parks. Manufacturing accounts for more than a fifth of the Philippines’ gross domestic product (GDP). Meanwhile, the Cavite-Laguna-Batangas area covers about 40% of the country’s manufacturing output. Manufacturing investors are drawn to the CALABARZON region because of its high labor productivity (ratio of gross regional output to corresponding employment) which indicates that it has enough skilled manpower to handle higher-value products such as electronics. Aside from Japanese, Taiwanese, and Chinese investors’ decision to transfer manufacturing operations to the Philippines from China, the Cavite-Laguna-Batangas industrial corridor should also benefit from the top conglomerates' diversification into manufacturing and the planned development of infrastructure projects in the Southern Luzon area covering Cavite and Laguna. The Philippines remains an attractive investment hub in the region, and this should enable the country’s industrial parks to attract more manufacturing investments.

     

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