Which currencies will drive Philippines property?

Many buyers of property in the Philippines are foreigners, including among them balikbayan. The recent collapse of asset prices will be impacting on families in several respects:
1. Employment - job losses will be undermining people's capacity to pay off home loans and credit card debts

2. Foreign exchange movements will be increasing/decreasing debt payments for everyone. Those in the worst position are Australians or NZ'ers. Those in the best position are likely to be Asians like the Chinese, Koreans and Japanese. The Americans look ok in the short term, but as the Fed makes cuts to rates, this might not be the case in the future. Arab investors will no doubt also be in a strong position to buy foreign assets as this market settles.

3. Inflation squeezes out defaulters. Inflation is actually no problem for real assets, but in the short term the higher interest rates will squeeze people who are not cash rich into foreclosure if they can't sustain their job or meet margin call obligations.









Given these circumstances one would be inclined to buy Philippines property when these circumstances are at their worst, but one might hold off actually paying off the debt until the optimum time - that is when the peso is weakest. We really need to look at the trend to determine this. At the moment the peso is weakening.
The currencies or countries in the best position to buy property in the Philippines right now are: Canada, the Chinese & Arab (OPEC) oil currencies, Vietnam, among others.

The Canadian dollar is generally very stable against the Philippines peso. The Chinese yuan is a very hard currency so we can expect a lot of public and private Chinese investment in Philippines property. There are several reasons for this, but I will explore that is a separate post.

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Andrew Sheldon www.sheldonthinks.com