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REIT Reform

10/24/2015

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by Madelaine B. Miraflor/
October 24, 2015 /
​
http://www.mb.com.ph/sec-open-to-dialogue-on-reit-law-amendment/#eVb1LSXs5jlGLfms.99
 
The Securities and Exchange Commission (SEC) is keen to have a dialogue with industry groups in order to set the ball rolling anew for the much anticipated amendment of Real Estate Investment Trust (REIT) law.

REIT is a closed-end investment company listed in the stock exchange and invests directly in real estate assets. What makes it ideal is that it has special tax considerations and high yields.

Six years after the enactment of the REIT act in the country, no one has yet participated in the scheme because of regulatory and tax issues.

SEC Commissioner Ephyro Luis Amatong said during the 4th Asia Pacific Real Estate Investment Summit that SEC intends to start a dialogue with institutions in order to make REIT a real option for companies who need to raise capital.

As of now, the local stakeholders are still hesitant to participate in REIT because of tax and public float issues, Philippine Stock Exchange chief operating officer Roel Refran said.

Under the law, the Bureau of Internal Revenue (BIR) imposed an additional cost of 12 percent for property owners who want to corporatize their income-generating assets into a REIT.

SEC, on the other hand, said the minimum public ownership of REITs should increase sharply from 33 percent to 67 percent in the third year after its listing.

“SEC hasn’t looked directly at REITs in particular but I would invite the industry to begin a discussion now with SEC. The reality is those two issues – public float and tax – and the risks are all interrelated. What the industry needs to understand is it is very difficult to balance that,” Amatong said.

“The product has not reached its full potential. We need dialogue in order to arrive into correct balance. Dialogue is the key term and balance is the key term. SEC is willing to sit down with the industry to get the thing going on. Everyone is waiting for this,” he further said.

Francisco Ed. Lim, senior partner at ACCRA Law, said that once the REIT law is already favorable to participants, the Philippines could be part of the growing Asian REITs, which now accounts for 16 percent of the global REIT market.

An Asia Pacific Real Estate Association (APREA) data showed that as of 2014, there are currently 110 Asian REITs, spread across eight countries, with a total market capitalization of around US$170 billion.

Asked if the amendment of Philippine REIT law could happen before the next administration takes over, Amatong only said “even if it’s not, it’s going to be very useful to start the conversation now”.
​
He also pointed out that the country is not necessarily behind within the region in terms of building its REIT market. “For instance, in China, it doesn’t have a REIT law, they are still experimenting first. So I’m saying there’s still a big room to get better. It’s good to have a dialogue first,” Amatong further said.



Comprehensive tax reform may cover REIT industry revival
By Krista A. M. Montealegre, Senior Reporter/October 25, 2015/ 
​
http://www.bworldonline.com/content.php?section=Economy&title=comprehensive-tax-reform-may-cover-reit-industry-revival&id=117524

REAL ESTATE investment trusts (REIT) may get a new lease on life as the government evaluates the adoption of a comprehensive tax reform program, an official of the Securities and Exchange Commission said.

“Tax reform is in the air. It’s usually in the context of income tax, but you know, tax rin ito (REIT is also tax and it could be part of the reform),” Commissioner Ephyro Luis B. Amatong told reporters last Oct. 22, referring to the changes in the REIT Law.

The Aquino government had imposed stringent REIT rules to limit revenue losses caused by laws that grant generous tax perks. The REIT Act lapsed into law in December 2009 with none of the major property developers coming forward with their prospective offerings.

Taxation on asset transfers and issues on ownership have prompted property giants such as Ayala Land, Inc., SM Prime Holdings, Inc. and Robinsons Land Corp. to shelve proposed REIT listings.

Asked if there is still time to introduce changes to the law before the election, Mr. Amatong said: “Even if it’s not, it might be useful to start the conversation now so that when the next administration or the new Congress comes into office, mayroon nang pinag-uuspaan (discussions may resume). We hit the ground running.”

While the Philippines’ REIT Law has been in place since 2009, Indonesia and Thailand have forged ahead and saw their first REIT listings in 2013 and 2014, respectively, according to data from the Philippine Stock Exchange (PSE).

REIT listings have increased to 145 with a total market capitalization of $134.5 billion, from 118 listings valued at $65.1 billion in 2009, according to data from the exchange, citing property consultancy firm CBRE.

“It’s a wake-up call for our regulators. We need to reconsider how we can make it work,” PSE Chief Operating Officer Roel A. Refran said in an interview.

The government wants to revive talks with the real estate industry to achieve a compromise that may allow the country’s REIT market to finally take off six years after the law was passed.

“It’s difficult putting your best foot forward. There’s really a process. There’s room to evolve,” Mr. Amatong said.

Financial regulators are taking a precaution in the aftermath of the Asian financial crisis that hit the real estate industry, the commissioner said.

“We don’t want that to happen again but at the same time we don’t want to unnecessarily pull back the growth of the real estate industry,” Mr. Amatong said.


PH losing out in REIT race amid strict rules
October 23, 2015/ By: Doris Dumlao-Abadilla/http://business.inquirer.net/201167/ph-losing-out-in-reit-race-amid-strict-rules#ixzz3pdKep0ZD 

Six years after an enabling law for real estate investment trust (REIT) was passed, the Philippines is still struggling to strike the right balance to get this new asset class off the ground by offering sweeteners to property developers without jeopardizing the government’s fiscal stability.

During the 4th Asia Pacific Real Estate Investment Summit Thursday, private sector proponents noted how the Philippines was losing out in the REIT race. They said it’s still the same two regulatory restrictions that killed the REIT industry at infancy: the required minimum public ownership of REIT at an initial 40 percent before being raised to 67 percent and the imposition of value added tax on the initial asset transfer.

“We might miss the boat in terms of REIT,” said Philippine Stock Exchange (PSE) chief operating officer Roel Refran.

REIT gives investors the option to invest directly in finished products that are already earning money—such as residential and office units, hotels or shopping malls or even infrastructure ventures like toll roads and power plants. The REIT Law of 2009 requires the distribution of 90 percent of income annually.

The farther the Philippines veers away from REIT norms across the globe, the more difficult it would be for this new asset class to attract investors, Refran said.

Francis Lim, former PSE president and now the managing partner of Accralaw, said Thailand had come up with a REIT legislation only in 2012 and yet was able to launch this new asset class ahead of the Philippines.  He said getting this product off the ground may require some form of “sacrifice” from the government.

Peter Verwer, chief executive of the Asia Pacific Real Estate Association (APREA), said governments would naturally be reluctant to let go of some of their tax takes. He noted, however, every single country that has launched the REIT was able to drive growth, create jobs and broaden its tax base.

Photo Credits:  
​​http://www.etftrends.com/2015/02/europe-reits-etf-as-a-yield-generating-alternative/
​http://www.moneycrashers.com/real-estate-investment-trust-investing-reits/

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Millennials dictate real estate trends

10/22/2015

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October 22, 2015 10:01 pm/by CATHERINE TALAVERA, REPORTER/ http://www.manilatimes.net/millennials-dictate-real-estate-trends/225127/

MILLENNIALS are now dictating the trend in real estate, industry experts noted during the 4th Asia Pacific Real Estate Investment Summit held in the Solaire Resort and Casino in Paranaque City Thursday. Real estate consultancy firm CBRE Philippines said the country is reaping the benefits of the so-called demographic dividend, or the entry of more able, young people into the local workforce.
CBRE Philippines Chairman Rick Santos said the Philippines has one of the youngest workforces in the world, with the average age of Filipino workers at 23.2 years old, turning the “labor force into the new people power.”

The United Nations Population Fund defines demographic dividend as “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).”

Santos noted that the country’s millennials have boosted profits of the Business Process Outsourcing (BPO) companies, which have been keeping the local real estate sector busy. He said the BPO market is taking the country by storm, as an estimated 6 million square meters of office space is added every year. “BPOs are major drivers in building smalls cities,” Santos added. Industry experts say companies worldwide have looked at the Philippines as a favorable investment site, especially for outsourcing some business processes, due to its educated and young workforce.

Ayala Land Hotels and Resorts Corporation’s Al Legaspi said millennials are creating a certain “less is more” trend in the hotel sector.
“Millenials are not after luxury, they’re after connectivity,” Legaspi said. “They are value-conscious. They want to make sure they put their money in things that count.” He foresees that pricing in hotels would be more competitive, since these millennials are looking for cheaper rates. Meanwhile, Regus Philippines Country Manager Lars Wittig said millennials also contribute to the mixed-use trend, as more young people demand more flexible office spaces. Wittig said millennials want accessibility and connectivity, something the mixed-use market is trying to address. He said property firms are now combining office and residential buildings into one development to give residents, mostly the young employees, an option to live near where they work. For the retail industry, Robinsons Land Vice President for Lease Lourdes Alano said the youth-dominated BPO industry “is now fuelling the retail sector.”

She noted that the retail sector is seeing a trend in the 24/7 convenience store chain that caters to the BPO workers, since most of their operations run for both day and night.

Other panelists who were a part of the discussion were: DMCI Homes Chief Financial Officer Joseph Ramil Lombos, KMC Mag Group Managing Director Michael McCullough, Trakomatic Chief Operating Officer Shaun Kwan . Lamudi Philippines Managing Director Jacqueline Van Den Ende was the event’s moderator.

Photo Credits:  www.retail-insider.com
​

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Tetangco rules out real estate bubble

10/21/2015

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October 21, 2015 at 11:50 pm by  Julito G. Rada/ http://thestandard.com.ph/business/190092/tetangco-rules-out-real-estate-bubble.html

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said there is no asset bubble happening in the real estate sector despite the increase in property prices.

“There is no asset bubble [in the real estate sector]. The increase in property prices are actually demand driven,” Tetangco said during a panel discussion at the Philippine International Convention Center in Pasay City. Tetangco said property builders and developers were wiser and now more aware of the risks associated with the property business. “Before, most developers build, let’s say four towers first, before selling it to potential buyers. But now, they see to it that almost 80 percent of the first tower is sold before building another tower,” Tetangco said.

Asset bubbles are characterized by an upshot in asset prices, such as those in the real estate sector, that they no longer reflect real market rates due to perceived demand. Such is seen as detrimental to the economy.

Global debt watcher Fitch Ratings earlier said in a report that there was a limited clarity over macro-prudential risks stemming from the country’s real estate market. Fitch said the lack of data on property prices and affordability indicators made it difficult for the rating agency to assess the effect of credit growth on the real estate market. Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said the macro-prudential measures employed by the banking regulator made the risks of asset price inflation manageable.

“The risks of asset price inflation appear manageable and have in fact been addressed by a number of macroprudential measures,” Guinigundo said in an earlier statement. Guinigundo said a significant runup in real estate prices in Makati and elsewhere could be true but at best anecdotal. He said there should be a residential real estate price index to make a general characterization of the real estate sector and the likely path of property prices.

“It is also useful to produce a decomposition into residential and commercial property prices which are driven by different dynamics. For housing, we continue to have a large backlog while the capacity of the clients has increased due to overseas remittances, higher employment and business process outsourcing,” Guinigundo said. He said for commercial establishments, the robust economic tempo had generated great interest among investors and their corresponding demand for commercial space was shooting up.

“But again, the various macro-prudential measures and careful monetary stance of the BSP have helped support the sustainability of this segment. We also believe that our key property builders and developers are now more risk-conscious and therefore have conducted themselves responsibly,” Guinigundo said.

Fitch cited a data published by Colliers International showing that average land values in the Makati central business district had risen by more than 50 percent since the end of 2012, although relatively low vacancy rates and strong growth in rents suggested some fundamental support for current price levels. Fitch said while private sector credit growth moderated from 19.9 percent year-on-year at end-2014 to 14.1 percent in June 2015, it was still growing at a brisk pace. Fitch said the proactive supervision and regulation of the Bangko Sentral, particularly on the introduction of real estate stress tests and caps on mortgage loan values relative to collateral, might help to contain risks.

Bangko Sentral plans to release a residential real estate price index later this year.
Guinigundo said banks engaged in real estate were advised to ensure their capital base was not unduly challenged by their exposure in real estate.

                     

​Photo Credits -- ​https://www.linkedin.com/pulse/great-indian-property-bubble-why-real-estate-isnt-best-deepak-mehta

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Ayala’s Amaia now has 30 percent of economic housing segment

10/20/2015

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by Bernie Magkilat/October 20, 2015 /http://www.mb.com.ph/ayalas-amaia-now-has-30-of-economic-housing-segment/

Amaia Land Corp., a unit of the Ayala Group that caters to the Broad C or economic housing segment, now accounts for a dominant 30 percent share in this biggest housing market category where 25 players are competing.

Company President Ricky Celis said at the launch of the two completed buildings at the Amaia Steps Alabang that it has 34 active Amaia developments around the country. Amaia Steps Alabang is the 10th among these projects.

“I can say we have the dominant position,” Celis said adding that dominant means 25 to 30 percent of this market segment where 25 housing developers have presence.

Celis said the Broad C or the economy housing segment accounts for a third of total number of families. This market segment has a monthly household income of P20,000 to P60,000 comprising of the working population with regular jobs, OFWs, entrepreneurs, and those currently renting a space but with enough savings to make their first major investment. Housing projects catering to this segment have price tags of P800,000 to P1.7 million.

As of 2012, the unmet housing requirement in the country was placed at 3.9 million units and demand could balloon to 5.5 million by next year. Of this market, two-thirds belong to the Broad C category, which the Amaia is present.
Since competition in the Broad C market segment is tight and price sensitive, Celis likened this category to the “shrinking pandesal,” which means players have to reengineer the lot sizes or adopt more efficient methods of construction to save on cost without sacrificing quality.

Celis, however, said that the Amaia brand is not yet a big contributor to the entire housing revenues of the conglomerate, which four other brands cater to each particular market segment. Ayala Premier caters to the high-end category followed by Alveo and Avida brands for the upper middle category. The Villa Vita brand is its compliance to the government regulation for mass housing developers to cater to the socialized housing market.

The Amaia brand caters to the medium class or the economy segment offering three brands – Amaia Skies for high rise, Amaia Steps for mid-rise, and Scapes for house and lot.

The Amaia Steps Alabang is a 2.6 hectare development consisting of 9 buildings with a project cost of P3 billion. The entire development is expected to be completed in 6 years depending on the volume of buyers.  Amaia Steps Alabang is a 9-story residential building located along Zapote Road, which is just one kilometer away from the shopping malls of SM Southmall of Las Piñas and Alabang Town Center.

Already, 90 percent of the first building has been sold out on its opening day. It is being sold for P1.6 million for the bare studio unit of 24-square meter floor area. The one-bedroom 32-square meter De Luxe is being sold for P2.1 to P2.3 million while the 48 square- meter Premier is being sold for P2.9 million.
​
Celis said that each Amaia development is defined by four characteristics: accessibility, appeal, quality and consistency of workmanship, and living experience. Most of its buyers for Amaia Alabang Steps are end user
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Learn to curb your enthusiasm says Senator Villar of Vista Land

10/19/2015

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October 19, 2015/ By: Daxim L. Lucas/ http://business.inquirer.net/200917/curb-your-enthusiasm

FEW LOCAL tycoons epitomize the concept of “guarded optimism” the way Manuel Villar does today.
The head of the Vista Land and Lifescapes Inc. property empire says he has learned to curb his enthusiasm, even when the economy is roaring along.

The painful lessons of the 1997 East Asian financial crisis are still fresh in his mind.

The former senator gave the Inquirer an interview during last week’s 2015 Forbes Global CEO Conference and was unusually candid and introspective about his ups and downs over the past few decades—ups and downs that have seen him become one of the country’s richest businessmen in the 1990s, on the brink of bankruptcy in the following decade, and back up among the country’s wealthiest today.

Indeed, Villar’s Camella Homes dominated the real estate scene in the 1990s with its affordable housing communities sprouting all over the country.

But the sharp peso devaluation in the late 1990s revealed a hidden weakness: The property giant was built on short-term dollar loans.

The drop in the peso’s value doubled the company’s debt load overnight and the accompanying spike in interest rates made the company unable to service its debt.

The result was a virtual bankruptcy, with creditors foreclosing on its assets left and right.

Villar says he has since learned to be more conservative.

“The [financial] ratios are important,” he tells the Inquirer. “You have to watch your ratios.”


Youth enthusiasm
And he is the first to admit that he was almost done in by his youthful enthusiasm for rapid growth decades ago.
“You have to be careful,” he adds, “Sometimes, you enjoy yourself too much, like in land banking for example. It can be a trap. You get to buy a lot of cheap properties. You keep on land banking. Then before you know it, you’re already loaded with too much debt. When the downturn comes, you get hit.”

With his thumb supporting his chin and his forefinger rubbing his temple, Villar pauses and says: “Now, I’m more cautious.”

He is particularly cautious about taking on debt—the very thing that almost wiped out his business empire in the late 1990s and early 2000s.

When speaking about debt, his volume goes down a notch and his words become more measured. He chooses his words more deliberately.

“At all times, you have to be liquid,” Villar says. “At all times, your debts have to be long term. There are rules. Bonds should be long term.”

And he reminds us that short-term liabilities—though they are temptingly easy to take on —can be silent killers when your company is struggling on the ropes.

“You should stay away from one-year-to-pay debts. Stay liquid and maintain a healthy debt-to-equity ratio,” he says, then adds: “There are standards [to follow]. But you tend to neglect them when you are a young entrepreneur.”

Then another reflective pause: “When you’re new, you forget these things. Then you begin to blame other people.”
Today, Villar—whose net worth is valued by Forbes at $1.57 billion—is no longer new to the wise ways of business. Not by a long shot.

But the businessman, reinvigorated by the success of his business endeavors in recent years, says it feels like he’s “only just begun.”

His publicly listed flagship firm, Vista Land and Lifescapes Inc., has a market capitalization of P45 billion and is sitting on undeveloped real estate stock (its so-called land bank) of at least 2,500 hectares nationwide —land that he says will be developed not just into housing developments, but fully functioning communities with commercial developments like shopping malls, schools and hospitals.


Bright prospects
“We are way past just the housing business now,” he says, his tone instantly becoming livelier and more excited when talking about his current activities and prospects.

“We have condominiums, malls and retailing. My son is into the water industry. We have lots of other business like schools and we’re going into hospitals. I’m growing this business,” he says.

He declined to reveal further details about his push into healthcare, saying only that he’s putting up a hospital “somewhere along Daang Hari,” referring to the road connecting Muntinlupa City to Bacoor, Cavite—a route that bisects many of his most valuable landholdings.

“For me, my platforms there are the communities,” he says, explaining that his new business philosophy is no longer about just selling housing units, but making sure that these communities thrive by surrounding them with the facilities they need to build a strong and healthy environment.

Indeed, it is a far cry from the old business model where a real estate developer would sell you a home, then leave you to your own devices.

“It’s integration. And at the same time, you improve your service to your clients,” Villar explains.

So given his business empire’s near-death experience several years ago, is the businessman sensing any chinks in the armor of the rapidly growing Philippine economy?  Is he worried about any surprises around the corner? No.  “I’m very optimistic,” he says. “In fact, the real estate industry and real estate companies are a lot stronger now.”  No repeat
“I don’t see [a repeat of 1997] because we’re all very alert,” Villar adds. “In fact, even the central bank is a bit paranoid (by imposing many restrictions on real estate lending). Sometimes, we feel that they’re too paranoid, but at the end of the day, I guess that’s ok, too.”  “They compel the banks to be strict, and because the banks are strict, you are compelled to be conservative,” he says, describing how fear of a repeat of 1997 has gripped the real estate business today.

Villar’s business concerns today can be found in 92 cities and municipalities, including many of the smaller ones where larger real estate developers fear to enter—something that doesn’t bother him, thanks to strong ties with local government officials developed during his many years as a politician.

Overall, Villar says he is optimistic about the country’s prospects regardless of who ends up running it in 2016 and beyond.
​
Optimism and conservatism —a good combination.

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Property and consumer stocks less vulnerable

10/11/2015

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by Madelaine B. Miraflor/October 11, 2015 /http://www.mb.com.ph/property-and-consumer-stocks-less-vulnerable/#kQ2HrRuXz1LFvZfX.99

​The local stock market is approaching a week where it may finally take a pause from its winning momentum and succumb to a correction, with property and consumer companies as “best stocks” to monitor and invest in.

Alexander Tiu, senior equity analyst at AB Capital Securities, Inc., said in a phone interview that companies in the consumer and property sectors will still be the top performers in the medium-term.

“These are the companies whose revenues are mostly locally generated and they are more resilient to what’s happening outside or in other countries. For property, we prefer those that are connected to retail and BPO (business process outsourcing),” Tiu said.

A recent data from the Philippine Stock Exchange(PSE) showed that some of the property sectors that have been seeing consistent increase in their share prices are Ayala Land, Inc., SM Prime Holdings, Inc., Megaworld Corp., and Robinsons Land Corp.

Meanwhile, consumer stock Universal Robina Corp. is one of the most actively traded stocks on Friday that registered gains.
Moving forward, Tiu said the market may still continue its positive momentum but a correction looms as Philippine shares start becoming overbought again.

“There’s still a bit of upside in PSEi (Philipine Stock Exchange index) but there might be a chance of weakness since we’ve been going up for several days now and our RSI (relative strength index) is reaching overbought level,” he said.

This week, Tiu said market participants will watch out for the United States’ core retail sales. “This should give an idea if the US economy has truly recovered.” On the local front, Overseas Filipino Workers (OFW) remittances data is being anticipated.

“A technical breather won’t come as a surprise, given the previous week’s rally.  Data drivers for sentiment might be inclined towards China’s trade data and US inflation,” F. Yap Securities analyst Jason Escartin said.

On Friday, the local market beat a one-day correction by rebounding.
PSEi ended the week with an increase of 32.12 points, or 0.45 percent to close at 7,138.91, while the wider all shares gained 16.35 points, or 0.40 percent to 4,079.75.
​
“Headlines of possible delay in the Federal Reserve rate supported a surge in equities, lifting the PSEi 288 points up at 7,138 or 4.21 percent week-on-week,” Escartin said
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BPO & Real Estate

10/5/2015

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By Anonymous October 05, 2015/ http://www.malaya.com.ph/business-news/business/bpo-end-year-12m-workers

The information technology-business process outsourcing (IT-BPO) industry is expected to end the year with 1.2 million workers, just 100,000 shy of next year’s goal of hitting 1.3 million.

The industry is adding another 170,000 workers this year supported by the expansion of existing and establishment of new BPO companies.

Revenues in 2014 hit $18.9 billion and are expected to swell by another 15 to 18 percent before hitting $25 billion in 2016.

“We are on track to achieve these targets,” said Jose Mari Mercado, president of the Information Technology and Business Process Association of the Philippines (IBPAP).

Mercado said IBPAP has shortlisted companies which would craft a new roadmap for 2016 to 2022.

“In the two previous road maps, we looked at the global opportunities and looked at our capabilities as a country and identified how we can leverage on that opportunity and identify how we can move forward,” he said.

Mercado said the new roadmap will look at specific trends such as multi-language capabilities, opportunities to be offered by the Asean integration, among others.

Mercado also sees finance and accounting, IT and healthcare information as the growth areas in BPO.

The roadmap is targeted to be released before the middle of next year.

Voice services account for 69 percent of the total IT-BPO industry and employs two-thirds, about 700,000, of the entire industry.

IBPAP is hosting the 7th International IT-BPM Summit themed Harnessing Information, Powering Nations, Connecting the World, today and tomorrow at the Marriott Grand Ballroom, Marriott Hotel.


​BPO industry to benefit from AEC
By Anonymous October 06, 2015/ http://www.malaya.com.ph/business-news/business/%E2%80%8Bbpo-industry-benefit-aec

​The integration of Asean economies is yet another opportunity for the Philippines to offer information technology-business process outsourcing services to global companies expanding in the region, said Dan Reyes, chairman of the Information Technology and Business Process Association of the Philippines (IBPAP).

Reyes, in a press conference on the sidelines of the International IT-BPM Summit at the Marriott Hotel yesterday, said the free flow of talent within the region will also enable companies setting up global in-house centers or captives in the Philippines to develop multi-lingual skills and tap a rich pool of resources.

Jose Mari Mercado, IBPAP president, said companies which maintain global centers, say in Singapore or in Japan, may eliminate the need to maintain multiple centers in Asia and consolidate them in Manila since bulk of their operations are in Manila anyway.

But the challenge, Mercado said, is the Philippines lacks language capabilities.

“The opportunity is there from an attractiveness perspective, in terms of location. But the challenge is we don’t have the language capabilities,” he noted.

Mercado said the industry is working with the Commission on Higher Education in identifying what language the Philippines can focus on.

“If you look at the Asean languages, one of the potential advantages of Asean integration is if a company decides to put up its regional shared service facility in the Philippines and I need two Vietnamese agents and cannot find them here, the Asean integration should make it easier to put in two guys from Vietnam and work here. That’s one of the potential advantages of Asean integration,” Mercado explained.

Domestically, IBPAP is poised to release at the end of the month a new list of next wave cities to cultivate more sites on top of the tier 23 cities where BPOs are now located.The industry is seen to end the year with 1.2 million workers​.
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Filipinos Trust Word-of-Mouth Recommendations The Most 

10/4/2015

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Metro Manila (CNN Philippines) — When it comes to making a purchase, word-of-mouth recommendations from people they know is the most trusted source of advertising for Filipino consumers, a recent Nielsen survey revealed.

Results of the 2015 Nielsen’s Global Trust in Advertising Survey, which was released to media on Monday (September 28), showed that 91 percent of consumers in the Philippines “placed trust in word-of-mouth recommendations from people they know” — the highest trust level for this ad format among Southeast Asian consumers.

Also influential among Filipinos are editorial content, such as newspaper articles, with 80 percent; and consumer opinions posted online with 75 percent.

“While word-of-mouth endorsements continue to earn the biggest trust of consumers, extending the conversation in the digital format can result to quicker and viral results,” Stuart Jamieson, managing director of Nielsen Philippines, said.
Online vs. Traditional AdsDespite the proliferation of online advertising formats, traditional ads continue to be a major influencer in purchasing decisions.

TV leads as the most trusted traditional format with 75 percent — surpassing the global average of 63 percent. Newspaper and magazine advertisements closely follow behind with 74 percent  and 70 percent, respectively.

Jamieson explained that “[w]hile digital ads offer considerable advantages — such as precision-focused campaigns, in-flight adjustments and more creative options — TV still delivers unequalled ability to reach the masses.”

Although earning low trust ratings, the survey revealed that online and mobile formats are highly effective in driving consumers to the point of purchase.

Self-reported action for both text ads on mobile phones — 33 percent trust; 52 percent take action — and ads on mobile devices — 47 percent trust; 58 percent take action — surpassed their trust ratings by more than double digits. 

Jamieson credited this to one attribute: easy access to products or services.

“Online and mobile formats make it easier for consumers take quick action on the advertisement,” Jamieson said. ”With just a click, consumers are directed to a place where they can receive more information or purchase the item.”

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Speaking to the Hearts and Minds of ConsumersThe survey also revealed that advertisements featuring real-life situations is the most like to resonate among Filipinos. This is followed by advertisements that are family-oriented at 62 percent, health-themed at 57 percent, value-oriented at 50 percent, and humorous at 42 percent.

“The advertising medium is only part of the formula for reaching consumers. It’s important for consumers to identify and connect with both the brand and message,” Jamieson advised.

“Advertisements that feature relatable situations and comedic relief, and which focus on family, values and health greatly appeal to consumers and elicit the most positive response.”

The poll asked 30,000 online respondents in 60 countries to gauge consumer sentiment in 19 forms of paid, earned, and owned advertising mediums. It was conducted from February 23 to March 13 this year.


By 
Mikas Matsuzawa, CNN Philippines /http://cnnphilippines.com

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PH Needs to Build New City Outside Metro Manila

10/4/2015

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BATAAN -- Bases Conversion and Development Authority (BCDA) head Arnel Casanova said the Philippines needs to build a new city outside Metro Manila.

Casanova stressed this during his speech at the teambuilding activity of members of the Anvil Business Club, an association young Filipino-Chinese entrepreneurs, at the Anvaya Cove Beach and Nature Club in Morong, Bataan Friday night.

The BCDA president and chief executive officer introduced the Clark Green City (CGC) to the business group as an alternative to decongest Metro Manila and spur economic development in the entire Luzon island.

"We really need a new city and this is an opportunity for us to really build it properly," Casanova told the Anvil members.

The Clark Green City is a 9,450-hectare master planned property within the Clark Special Economic Zone, approximately half the size of Metro Manila, eyed to be the country's first smart, green, and disaster-resilient metropolis, according to Casanova. 

He said the CGC is expected to break ground in 2016 and is another flagship project of BCDA.

"Clark Green City will certainly be one of the top in the list of alternative urban centers that will lead to an enhanced equitable distribution of development across the country," Casanova said.

At full development, the green city will have some 1.12 million residents, 800,000 workers and contribute a gross output of approximately P1.57 trillion per year to the national economy or roughly four percent share in the county’s Gross Domestic Product (GDP).

The DPWH (Department of Public Works and Highways) will implement the construction of two access roads leading to the CGC, with an initial funding of P200-million, and is expected to be completed within the year.

The road projects will include an initial two-way lane and will provide better accessibility that will subsequently increase the property’s value, economic potential and attractiveness to investors.

One of the city's access roads will stretch 2.5 kilometers from MacArthur highway in Tarlac.

The other project will extend 15 kilometers to link the Clark Freeport Zone and the Clark International Airport to the CGC. It will also connect to the existing Tarlac-Zambales road that leads to the Capas-Botolan road.

Lone bidder Filinvest Land, Incorporated submitted a valid bid with P160-million on September 8 and bagged the right as the joint venture for the development of an initial 288-hectare property inside the Green City.

The National Economic and Development Authority said the P200-billion estimated cost of building CGC will be developed over a 50-year period through the Public-Private Partnership (PPP) scheme. 

National leaders, as well as local businessmen based in Pampanga, have sought the conduct of a serious and comprehensive study on the proposal to decongest Metro Manila not only to ensure growth in other regions but also as a disaster mitigating strategy.

The future development of CGC, which will have five districts -- the government district; central business district; academic district, agri-forestry research and development district; and the wellness and eco-tourism district -- may well be the focal point in plans to decongest the metropolis leading to an enhanced equitable distribution of development across the country.

The promotion of CGC is both timely and imperative if seriously included as a new metropolis that will also serve as a crucial disaster mitigating strategy, said Casanova. 

A decongested Metro Manila will decisively prevent a catastrophic aftermath of a major calamity that may incur tens of thousands of casualties and trillions of pesos in economic losses.
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"If plans to decongest the metropolis will push through, the Clark Green City will certainly be one of the top in the list of alternative urban centers that will lead to an enhanced equitable distribution of development across the country," the official added.



By Reynaldo G. Navales/http://www.sunstar.com.ph
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YEAREND FORECAST Vertical and horizontal developments to end 2015 in contrasting styles

10/3/2015

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October 3, 2015/ By: Tessa R. Salazar/  http://business.inquirer.net/200161/vertical-horizontal-developments-to-end-2015-in-contrasting-styles#ixzz3nXye555z

The last three months of the year is crucial in real estate transactions. Inquirer Property has asked property analysts what buyers and investors should watch out for in fourth quarter transactions.


Julius Guevara, Colliers International Philippines’ director for research and advisory services, said: “What investors should watch out for during the last three months of 2015 would be an increase in interest rates. The US Federal Reserve was indicating that they would finally increase rates this year as the US economy improves, but has again deferred that decision to December because of the devaluation of the yuan and continued economic malaise in Europe. Homebuyers should make the decision now in order to lock in on historically low rates.”

Guevara told Inquirer Property that “condo sales in Metro Manila have continued to slide, falling another 23 percent during the first 6 months of the year compared to the same period last year.”
Enrique Soriano, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business, said that “performance of the (property) sector will depend on the different asset classes.”
“Overall, the residential segment will continue to grow, notably in the horizontal market. However, we are seeing signs of property pressure on the mid-priced condo market as investors are wary of the growing concern related to the perceived oversupply in the Makati and BGC (Bonifacio Global City) areas,” said Soriano.

Guevara said: “While total condo sales almost reached 40,000 units in 2014, we expect that sales would be in the low 30,000 level by the end of this year. On the other hand, sales of horizontal projects in the fringe provinces around Metro Manila have done better, with unsold inventory levels improving during the first part of the year. If the condominiums slated to be completed within the next five years in the major CBDs (central business districts) are completed on time, we will see a jump in condo stock of around 58 percent. For this year, the increase would be around 13 percent.”

He added: “This will definitely affect rental rate growth and cause an increase in vacancy rates. However, the worsening traffic congestion issues have convinced some to rent condos in the CBDs during the weekdays and just go to their actual home in the suburbs in the weekends, so this demand may taper the effect of the increase in supply.”

Claro dG Cordero, Jones Lang LaSalle Philippines Inc. associate director and head of research, consulting and valuation, said: “We do not foresee any major shocks to the property sector, hence, rental rates and capital values will register positive growth on back of healthy demand from the various drivers of growth—BPO/O&O expansion and new entrants, remittances from overseas Filipinos and arrival of tourists.”

“With an expected seasonal increase in level of remittances coming from overseas Filipinos in the last quarter of the year, we may expect to see some growth in residential sales, as well as increased retail sales/revenue for retailers and shopping malls,” said Cordero.


Demand in Q3, sale in Q4

Monique Pronove, chief executive officer of Pronove Tai International Property Consultants, said: “Seasonally, the fourth quarter is always a very active time in terms of sales and leasing transactions. For the office market, it is our experience for the past 13 years that demand picks up by the third quarter where inspections are conducted and business cases are submitted. Usually at the start of the fourth quarter, decisions are made to buy or lease, then negotiations take place and come November and December, contracts are signed.”

“It is no different this year, although the number of transactions has not been as robust as it was in 2013,” observed Pronove.

“The office and leisure asset classes and the premium or high-end residential segment will continue to experience steady growth in the tail end of 2015,” said Soriano.
​
Guevara said: “For the office sector, demand from the BPO industry continues to be strong, taking up most of the newly constructed space. Vacancies will continue to be tight in Makati CBD and Ortigas Center due to the lack of new supply, but an increase in office stock in Fort Bonifacio by around 214,000 square meters of new space by the end of the year may result in an increase in vacancy in that area.”
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