This week, Colliers Research provides insights on the extension of the work-from-home setup afforded to IT-BPM firms in economic zones; the Bangko Sentral ng Pilipinas projecting an 80% drop in tourism receipts for 2021; and a newly launched condominium project of DMCI Homes situated close to the Tandang Sora Station of MRT-7.
IT-BPM firms in ecozones allowed WFH arrangement
The Fiscal Incentives Review Board (FIRB) grants information technology–business process management (IT-BPM) firms in economic zones with a 90% work-from-home schedule until March of 2022 as the president has extended the country’s state of calamity status until September 12, 2022. The policy was implemented to address work constraints brought by the COVID-19 pandemic. This is in accordance with the provision in the implementing rules and regulations of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which permits an investment promotion agency to implement temporary measures long as they are approved by the FIRB to assist registered business enterprises in recovering from the pandemic, national emergencies, or major disasters.
In Q2 2021, Colliers recorded about 26,500 square meters (285,100 square feet) of deals from outsourcing firms, up from 2,700 square meters (29,100 square feet) in Q2 2020. Colliers believes that outsourcing firms are likely to lead office space take-up in the next 6–12 months. Meanwhile, in a survey conducted by the IT and Business Process Association of the Philippines (IBPAP), 87% of IT-BPM firms are projecting a 5–15% growth in 2021, while only 13% are expecting a flat growth. We recommend that occupiers adjust density of employees by implementing hybrid working models as these will result in improved wellness, staff morale and productivity.
Tourism receipts seen plunging 80% this year
Zeno Abenoja, managing director of the Department of Economic Research of the Bangko Sentral ng Pilipinas (BSP) or the central bank said that tourist receipts are likely to drop by 80% instead of growing by 15% in 2021. Latest data from the Department of Tourism (DOT) show that travel receipts dropped by 82% in H1 2021. For 2022, Abenoja said that the BSP projects tourist receipts rebounding by about 25% as international organizations see the accelerated rollout of the COVID-19 vaccines allowing more countries to open up their borders. Based on the survey conducted by the United Nations World Tourism Organization (UNWTO), about 60% of the respondents expect a recovery by 2022.
Data from the DOT show that tourist arrivals as of 5M 2021 reached 46,322, down 97% from the 1.4 million arrivals recorded in 5M 2020.Colliers projects occupancies to remain below 30% by the end of 2021 as we do not see an uptick in foreign arrivals. Colliers recommends that hotel operators provide flexibility on their guests’ bookings such as free cancellations, room upgrades, and booking modifications 24 hours before arrival.
DMCI Homes said that they are planning to launch a new residential project in Tandang Sora, Quezon City, by the end of 2021. The Erin Heights will be located along Commonwealth Avenue, near the Tandang Sora station of the MRT-7 project. DMCI Homes president Alfredo Austria added that the integration of in-house design, engineering, and construction has allowed them to launch and deliver projects despite the pandemic.
Based on Colliers Philippines data, launches and take-up in the pre-selling market in H1 2021 declined to 8,600 and 9,800, respectively, from 10,000 launched and 20,400 units sold in H1 2020. In our view, recovery in the residential market will likely be anchored on the successful COVID-19 inoculation. We encourage developers to continue exploring the viability of transit-oriented developments and implementing strategic land-banking especially those near infrastructure projects that are likely to be completed in the next 12 to 36 months.