The Philippines is currently the best performing economy in Southeast Asia with third quarter GDP growth of 7.1 per cent and foreign exchange reserves that exceed the country’s foreign debt by 50 per cent.
This strong position is due to a decade of steadily improving macro-economic fundamentals; a story that is reflected in the real estate market.
Some 15 years ago my first home in the Philippines was a low-rise apartment on the edge of Makati, Manila’s central business district, where my neighbours occupied wooden shanties on the ill-lit pavement outside.
Power was sporadic, traffic and pollution a constant and the Mandarin Oriental still bore the scars of mortar fire from a recent coup.
Unlike General McArthur, after a brief visit my mother vowed she would not be returning.
Today that apartment is long gone, integrated into the Lopez Group’s Rockwell Centre, Manila’s first urban oasis, providing a world-class living and working environment.
Such large-scale, master-planned communities are now adding to the Los Angeles-like sprawl that is Metro Manila.
The largest of these is Bonifacio Global City, which provides a much needed extension to the CBD.
Here, some 10,000 condominium units have been built in the past five years and, with the impending relocation of the Philippine Stock Exchange, Bonifacio Global City is fast becoming an attractive location for multinational corporations and a local financial sector previously wedded to Makati.
The on-going construction boom is well-supported by strong demand in the residential sector due to improving affordability and the commercial sector due to an explosion of off-shoring and out-sourcing.
Price appreciation has been steady but not spectacular – inflation adjusted real estate values are still less than 50 per cent of highs seen in the 1990s – and property remains very cheap by regional standards.
Luxury apartments in prime locations, some branded by Italian fashion houses, sell off-plan at HK$3,000 per square foot with secondary market prices at a 25 per cent discount.
Manila’s foreign residents consider their quality of life a well-kept secret but that news is percolating out.
A diplomat recently told me the only reason he now receives his “hardship” allowance is due to the frequency of typhoons!
Now my mother visits every year – and loves it.