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October 13, 2017

Inflation hit 3.4 percent in Sept.

Inflation in September rose to 3.4 percent, a five-month high, due mainly to higher food prices caused by weather disturbances during the period. The latest Philippine Statistics Authority (PSA) data showed that the rate of increase in the prices of basic goods last month matched the 3.4 percent posted in March and April. It was higher than the 2.3 percent recorded in September last year. In a statement, state planning agency National Economic and Development Authority said food inflation increased to 3.6 percent last month from 3.5 percent in August, as prices of bread, cereals, corn, fish, flour, oils and fats, pasta and vegetables increased. “The accelerated adjustments in food, particularly corn, fish and vegetables, can be partly traced to the lingering effects of Typhoon ‘Jolina’ and tropical depression ‘Maring,’ which caused damage to agriculture and fisheries in the Calabarzon region, particularly Quezon province,” Socioeconomic Planning Secretary Ernesto M. Pernia said. Losses from ‘Maring’ reached about P77 million, Neda noted. “We must continue to strengthen the resiliency of communities not only to support low-income farmers but also to stabilize prices of agricultural commodities,” said Pernia, who heads Neda. “This can be done through programs on increasing access to technology, improving access of agriculture products to trade partners, and upgrading credit programs to include crop insurance so farmers are able to recover from losses,” he said. Nonfood inflation, meanwhile, expanded to 3.1 percent, the fastest since February 2013, “due to faster year-on-year price adjustments in housing, water, electricity, gas and other fuels, transport, restaurants, and clothing and footwear,” Neda said.
(Source: Philippine Daily Inquirer, 06 October 2017)

Low inflation, coupled with steady flow of OFW remittances and high consumer confidence, sustains household spending in the country. The Philippine Statistics Authority (PSA) noted that household spending rose 5.9% in 2Q 2017, slower than the 7.5% growth recorded in the same period in 2016 primarily due to the absence of election-related spending and slight rise in inflation (3.1% in 2Q 2017 from 1.5% a year ago). Among the major contributors to household spending’s growth in 2Q 2017 were restaurants and hotels (+11.4%), education (+8.7%), and food and non-alcoholic beverage (+6%). Clothing and footwear recovered slightly (+1.1%) owing to a low base (-2.1%) in 2Q 2016. Overall indicators point to strong household spending for the rest of the year with central bank projecting OFW remittances to rise by at least 4% this year to an estimated USD31 billion and annual inflation rate still expected to hover within the central bank’s projection of 2-4%.

Century, Megawide ink contract for Cavite property development

Century Properties Group Inc. announced an agreement it has entered into with Megawide Corp. for a house-and-lot project in Cavite. The deal covers the development of the Tanza, Cavite, property under the brand PHirst Park Homes. PHirst Park Homes is a partnership by Century Properties with Mitsubishi Corp. The contract requires Megawide to supply precast concrete-panel building systems for 2,830 housing units in PHirst Park Homes. “We are extremely proud of our precast technology,” Megawide President Edgar Saavedra said. “This memorandum of agreement with PHirst Park Homes is our seal of assurance to buyers in terms of quality and timely delivery.” PHirst Park Homes Tanza is a 26-hectare horizontal community accessible via Governor’s Drive, Cavite with a total of 2,877 units. Launched in the second quarter of 2017, the property has commenced with land development for its first phase, which will have 950 units. Target completion for the land development of its first phase is by the third quarter of 2018. “The first 878 homes will be turned over in the third quarter of the same year. Construction of the remaining 72 units is set to start by the second quarter of 2018, to be turned over before the year-end,” Century Properties said. The company added that reservation sales for the first phase stood at approximately P1.2 billion, equivalent to 91 percent of the available supply, as of August 2017. “PHirst Park Homes attributes the fast sales take up to the demand of Filipino end-users for quality housing in the price range of P1 million to P3 million,” Century Properties said. “Buyers from the Calabarzon [Cavite, Laguna, Batangas, Rizal and Quezon] dominate the sales by close to 60 percent, followed by Filipinos working overseas.”
(Source: Business Mirror, 04 October 2017)

Over the past three quarters we have seen both national and local developers being more aggressive in addressing the rising demand for residential projects in major urban areas outside of Metro Manila. More residential projects are being developed in Cavite, for instance, due the implementation of major infrastructure projects which ease travel from business hubs in Metro Manila to cities and municipalities of Cavite. Moreover, parts of the Southern Luzon region remain as a support community to the country’s capital, thus sustaining the demand for affordable residential projects. We also believe that Cavite is an ideal location for residential projects as its population is growing by an average of 3.4% annually, double the national average. Per capita income in the Southern Luzon region, where Cavite belongs, has risen by 4.7% per annum over the past two years. Among the key drivers is the sustained flow of overseas Filipino workers (OFW) remittances, with Southern Luzon being one of the major sources of migrant workers.

Dream Hotel Group to make first foray in Philippines hotel market

Dream Hotel Group has signed its first hotel in the Philippines. When it opens, the 220-guestroom Dream Hotel will be on the beaches of Carabao Island near Boracay and the international airport. Dream Carabao Island will be part of an integrated gaming and adventure resort destination spanning more than 1 million square feet and will have 220 guestrooms and suites, including 100 villas. The property will be the seventh hotel to join Dream Hotel Group’s expanding Asian network. Recently rated third best island destination in the world by Condé Nast Traveler magazine, Boracay gets more than three million visitors annually, including local holiday makers and international visitors from Europe and North Asia.
(Source: Hotel Management, 03 October 2017)

The Philippines’ rosy tourism prospects are encouraging foreign developers to invest in the country. International arrivals continue to grow despite safety and security issues as well as the imposition of martial law in the Mindanao group of islands. Colliers sees the demand for hotel rooms in Metro Manila being driven by the Philippines’ traditional visitor-generating markets such as South Korea, United States, China, and Japan, which account for about 60% of the country’s total foreign arrivals. We are retaining our forecast of 10% growth this year to 6.6 million international tourists, slower than the Tourism department’s 17% or 7 million foreign visitors. Given the projected rise in both foreign and domestic tourists, Colliers expects hotel occupancy in Metro Manila to hover between 65% and 70% over the next 12 months. We project occupancy rates to decline to 60%-65% from 2019 to 2020 due to new completions.



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