There are more signs a Philippine economic recovery is already starting to happen, and property experts expect this to carry over to the country’s real estate market. While there is no definite timeline for the turnaround, the hope is the situation improves in the coming months before ramping up next year.
One of the most important factors for the Philippine economic recovery is remittances sent by overseas Filipino workers (OFWs). These declined sharply early in the year due to COVID-19 but have started to rise. The Bangko Sentral ng Pilipinas found that OFWs sent more money into the country during June after a three-month slide.
“This may increase Filipino consumer confidence and help resuscitate a retail sector reeling from the pandemic and strict social distancing measures. A recovery of global economies in 2021 should also result in a rebound of OFW remittances and we forecast a positive impact on residential demand across the Philippines,” Joey Roi Bondoc Senior Research Manager at Colliers International Philippines wrote for the Inquirer.
The Philippine economic recovery is also being driven by a decreasing jobless rate that fell to 10 percent in July, down from record high totals earlier in the year. Foreign direct investments rose sharply as well with Bondoc noting this is another sign the situation is improving.
Government and central bank look to support property
Both the government and central bank are looking at ways to support the property market with the understanding this can support the Philippine economic recovery. In August, the Bangko Sentral ng Pilipinas increased the real estate loan limit for the country’s major banks. This was done with the expectation that economic activities would resume before year’s end.
Additionally, the recently approved Bayanihan to Recover as One Act will provide support to the real estate sector. A few other bills have been put forth to the government and these would also support the property market if they gain approval.
“Legislative measures likely to provide relief to the economy and property sector include the Corporate Recovery and Tax Incentives for Enterprises Act,” Bondoc stated. “Important bills include the Senate version of the Bayanihan To Recover As One Act or Bayanihan 2, which sets aside PHP10 billion for the ailing hospitality sector, and the PHP1.3 trillion Accelerated Recovery and Investments Stimulus for the Economy Act which should benefit traditional office tenants.”
