KOREAN FIRM ADDS P15B INVESTMENTS IN TOURISM-RELATED PROJECT IN CLARK
Korean firm Widus International Leisure Inc. (WIDI) has signed a consolidated lease agreement with Clark Development Corporation (CDC) to develop about 11 hectares (27.2 acres) of property through their leisure and resort complex project in the Clark Freeport Zone (CFZ). The firm is likely to invest an additional P15 billion by 2022 which would support the construction of their 380-room Widus Tower 4 as well as the expansion of their casino and the establishment of a retail area.
These new developments in the Clark Freeport Zone (CFZ) are crucial in converting the freeport into an information technology (IT), tourism and logistics hub in the country. Moving forward, Colliers sees more tourism and outsourcing-related investments from other foreign markets in the area once the Clark International Airport expansion project has been completed. The improved connectivity should spur more investments and eventually drive demand for support facilities such as offices, hotels, industrial spaces and warehouses.
TRAIN'S HIKE IN DISPOSABLE INCOME FELT BT RETAIL SECTOR, RESTAURANT - DoF
The Department of Finance reported that taxpayers have saved about P111.7 billion in 2018 after the Tax Reform for Acceleration and Inclusion (TRAIN) was signed into law by President Duterte. The TRAIN law enables more individuals to have greater disposable income due to lower tax rates. According to Finance Asst. Secretary Lambino the sales of several retailers and real estate developers have increased due to consumers’ higher purchasing power following the enactment of TRAIN law.
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Filipinos’ spending on food and non-alcoholic beverages was sustained despite inflation peaking in 2018. The segment grew by 4.9% in 2018 notwithstanding inflation reaching its highest level in nearly a decade. In Q1 2019, the segment increased by 5.8% as inflation has started to decelerate and fall within the central bank’s forecast. As the impact of TRAIN law continues, we expect greater absorption of new retail space from retailers as they are encouraged by consumers’ rising disposable incomes. This should entice developers to expand their retail footprint across the country. Overall, Colliers sees retail spending being driven by a positive economic outlook from 2019-2021.
FOREIGN TOURIST ARRIVALS UP BY OVER 7% IN Q1 2019
The Department of Tourism (DOT) recorded 2.2 million foreign tourist arrivals during the first quarter of 2019. This figure is 7.6% higher from the 2.04 million arrivals in the same period in 2018. South Korea remains to be the largest market while China is slowly catching up with 463,804 visitors, up by 24.87% yoy. According to DOT, this growth was mainly due to the reopening of the Boracay Island as well as the country’s friendlier ties with China. The government is targeting 8.2 million tourists by the end of 2019.
Colliers sees hotel occupancy in Metro Manila hovering between 68-70% annually from 2019-2021 as the country expects record-high arrivals and a slowdown in the completion of new hotel rooms. Colliers recommends that hotel developers explore the possibility of building more three and four-star hotels near airport development projects. We also encourage operators to look at accommodation preferences of major tourist markets including Japan, China, South Korea and the United States.