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September 29, 2017

ARCA South property developments on track to open in 2019

The developments in ARCA South, a 74-hectare mixed-use development project in Taguig City, are on track to be completed in 2019, Ayala Land Premiere (ALP) said on Tuesday. The Ayala Malls Lifestyle Complex in ARCA South is set to open in the next two years, ALP managing director Mike Jugo said in a briefing in Makati City. "There will be total retail gross leasable space of 72,000 square meters. This will be open by 2019," he said. Jugo said the area will also host office spaces catering largely to the business process outsourcing (BPO) sector. "There are six BPO towers scheduled to be completed by 2019," with around 17,000 square meters in gross leasable area, he said.
(Source: GMA News Online, 12 September 2017)

Colliers Philippines’ radar report on townships (Shifting Orbits: The Rise of Satellite Communities) identifies ARCA South as among the emerging business hubs in Metro Manila. We see the former site of government-owned Food Terminal Inc. (FTI) directly benefitting from the construction of infrastructure projects that link the capital to the thriving provinces of Cavite and Laguna including the South Integrated Transport System (SITS). The master-planned community features BPO buildings, residential towers, a mall, Seda hotel, and a 250-bed QualiMed hospital. The upcoming SITS will be built right beside the Arca South. About 4,000 buses and 160,000 passengers are expected to pass through the terminal daily and this should directly benefit Arca South’s retail components. Furthermore, ARCA South’s proximity to key locations such as Makati CBD, Ninoy Aquino International Airport (NAIA), and Fort Bonifacio should help facilitate the community’s development into a full-blown CBD.

Sweden eyes investments in Iloilo

Iloilo City — The government of Sweden is looking into potential investment opportunities in the city and provi2nce of Iloilo. “I see many business opportunities that I will forward to the Swedish business community,” said Sweden Ambassador to the Philippines Harold Fries.While attending a Department of Agriculture (DA) expo last week, Fries took time to meet Iloilo City Vice Mayor Jose Espinosa III and Iloilo Governor Arthur Defensor Sr. to discuss strengthening economic ties. Fries noted that there could be investors to boost Iloilo’s infrastructure, which has been continually expanding since 2010. “I’ve seen enormous and impressive change. It’s a very positive impression,” said Fries, who last visited Iloilo 25 years ago. The top Swedish envoy also noted the strong business processing outsourcing (BPO) sector. Fries particularly mentioned Transcom, a Swedish company that has opened a branch in Iloilo City. He also mentioned several Swedish companies that are engaged in producing high-tech machineries that can boost local farm production.
(Source: Manila Bulletin, 12 September 2017)

Iloilo is one of the largest property markets outside Metro Manila. Demand for office space in Iloilo has been driven by the business process outsourcing (BPO) industry. While demand in Metro Manila has slowed, Iloilo remains an expansion hub for BPO players. The Iloilo residential market is still primarily horizontal (house and lot) market-driven. Although some vertical (condominium) projects were recently completed in the Iloilo Business Park, the condominium market is still in its early stages. The residential market is banking on a pool of buyers from new Ilonggo families and Overseas Filipino Workers (OFW) mainly composed of nurses and seafarers. Meanwhile, restaurants and other food retail outlets, comprised of home-grown and foreign brands, occupy at least 25% of Iloilo's retail space. This is attributed to Ilonggos' fondness for food. Over the next two to three years, we see about 96,000 sq m (1.03 million sq ft) being added to Iloilo's retail stock. The projects lined up by major developers are indicative of the Iloilo population’s improving purchasing power.

Moody’s sees sustained robust growth for PH

Sound macro fundamentals will keep the Philippine economy strong in the medium term even as global debt watcher Moody’s Investors Services was seeing “rising” political risks in the country. “We expect robust economic growth to be sustained over the next few years, aided by the government’s focus on infrastructure development, buoyant private sector investment, and the recovery in external demand,” Moody’s said in a statement Friday. For this year, Moody’s projected gross domestic product (GDP) growth to remain “broadly stable” in the coming months to settle at 6.5 percent or at the lower end of the government’s 6.5-7.5 percent target range. “We have also retained our projection for 2018 at 6.8 percent, below the government’s target of 7-8 percent, given continued uncertainties regarding the proposed comprehensive tax reform program (CTRP), which is currently being considered by the upper house of Congress,” Moody’s added. The first CTRP package pending at the Senate will cut the personal income tax rates while jacking up taxes on consumption. Moody’s deemed that “in the absence of a significant boost to government revenues from the passage of the CTRP, the government will likely pare back its plan to aggressively increase its spending on infrastructure,” referring to the ambitious “Build, Build, Build” program aimed at ushering in a “golden age of infrastructure.” Under “Build, Build, Build,” the government will rollout 75 flagship, “game-changing” infrastructure projects to be started and finished in the next six years, in line with the plan to spend up to P9 trillion on hard and modern infrastructure until 2022.
(Source: Philippine Daily Inquirer, 15 September 2017)

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 slower growth YoY can partly be attributed to the lack of election-related spending which traditionally bolsters household and government expenditures. Despite this, the Philippines remains as one of the fastest-growing economies in Asia, trumping Southeast Asian neighbors and only behind China. 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. Multilateral institutions and foreign banks are projecting a GDP growth of between 6.4% to 6.9% this year which should support the growth of the property sector.



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