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Manila Market Intelligence June 14, 2021

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PHL digital transactions rose during renewed lockdowns

NEWS

The Bangko Sentral ng Pilipinas (BSP) or entral bank reported that digital financial transactions done via PESONEt and Instapay rose 276% YOY in terms volume and 127% YOY in terms of value as of April 2021. BSP Governor Benjamin Diokno said that this indicates sustained adoption of digital payments in the Philippines. He added that consumer preference for safe financial transactions along with the readiness of BSFIs (BSP-Supervised Financial Institutions) to offer safe, convenient, and affordable digital payment choices will continue to support the widespread use of digital payments. Moreover, he reaffirmed that the targets from the central bank's Digital Payments Transformation Roadmap of digitizing atleast 50% of the total volume of retail transactions and 70% of financial accounts owned by Filipinos will be accomplished by the end of 2022.

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RESEARCH VIEW

Data from Viber Philippines show that businesses and advertisers have utilized messaging applications to touch base with their customers during the pandemic. In 2020, business messages increased by 244% compared to 2019. Meanwhile, brand-owned business channels also rose by 211% in 2020. The Department of Trade and Industry (DTI) also aims to increase the share of e-commerce to the country’s GDP to 4.3% in 2021 from 3.4% in 2020. DTI projects the number of e-commerce enterprises to reach 1 million by the end of 2022 from only 500,000 in 2020. To seize opportunities brought by the growing demand for e-commerce, Colliers recommends that retailers expand offline-to-online strategies and firm up partnerships with logistics firms that have modernized warehouses and efficient logistics systems to maximize their shift from brick-and-mortar to online selling. We also encourage mall operators to be flexible to tenants’ requests for concessions to secure higher levels of occupancy as brick-and-mortar retailers continue to struggle with declining sales and consumer traffic.

New Clark Airport Terminal opens in July with ‘Contactless Passenger Solutions’
   

NEWS

Luzon International Premier Airport Development (LIPAD) Corp. said that the new Clark International Airport terminal is scheduled to open in July with the implementation of contactless passenger solutions. Passengers will be more at ease with no face-to-face interaction. Self-service kiosks as well as self-service bag drops will also be available at the airport. Once completed, the airport is projected to accommodate 8 million passengers annually from 4.2 million previously. Meanwhile, LIPAD Chief Executive Officer Bi Yong Chungunco said that the old passenger terminal building may be converted into a vaccination hub.

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RESEARCH VIEW

In our opinion, the completion of the new Clark International Airport should be able to decongest the Ninoy Aquino International Airport (NAIA). Colliers has observed that several firms have been developing integrated communities which feature office towers, residential condominiums, industrial warehouses and healthcare facilities to capture the rising demand from the completion of infrastructure projects. These should result in the generation of more jobs and eventually spur economic activity within the Central Luzon region. In the next 12 to 36 months, we see the completion of other infrastructure projects such as the Northern-Central Luzon such as the NLEX-SLEX Connector, North-South Commuter Railway and the Central Luzon Link Expressway (CLLEX) which should further boost central Luzon region’s attractiveness for property development. We encourage national and Pampanga-based developers to implement strategic landbanking to take advantage of the new infrastructure projects due to be completed beyond the current administration’s term.


PH tourism’s share in GDP drops 48%

NEWS

According to the World Travel and Tourism Council (WTTC), the share to GDP of the country's tourism industry declined by 41.4% YOY or USD37 billion (PHP1.8 trillion) in 2020 amid the COVID-19 pandemic. The contribution to GDP dropped to about USD52.8 billion (PHP2.5 trillion) last year from USD90 billion (PHP4.3 trillion) in 2019. Meanwhile, WTTC also noted that the share of the Philippine travel sector to the global economy is expected to rise by 48.5% YOY in 2021 if mobility and international travel were to resume this month.


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RESEARCH VIEW

Data from the Philippine Statistics Authority (PSA) show that the share of tourism to the country’s GDP was at 12.7% at the end of 2019. About 14 out of 100 are employed in tourism related industries such as passenger transport and accommodation and food and beverage (F&B). Due to the implementation of global travel restrictions, the International Air Transport Association (IATA) said that global air travel is unlikely to return to pre-COVID-19 levels until 2024. Hence, the Department of Tourism (DOT) has been banking on leisure-based hotel stays and domestic market to prop up hotel occupancy. In H2 2020, average hotel occupancy in Metro Manila reached 20%, this is down from the 25% recorded in H1 2020. In our view, hotel operators should consider offering convenient and affordable on-site COVID-19 testing as part of their amenity packages. These include the RT-PCR, rapid antigen and saliva testing, which is a cheaper and less invasive procedure for COVID-19 testing. We encourage hotel operators to consider adopting this alternative procedure.

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Joey Bondoc

Associate Director

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Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

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Martin Aguila

Senior Analyst

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Martin Aguila graduated in February 2019 from the De La Salle University with a degree in AB Economics. He joined Colliers Philippines in the same month and works as an analyst under the Research department. He has presented in several property market briefings with developers and investors and has assisted in the preparation of reports related to property such as Market Intelligence, GDP Flash, Quarterly Market Updates and Radar Reports. He also helps the team maintain and develop databases.

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