Some of the pertinent facts which might interest readers is the opportunity for people to buy rural banks in the Philippines. For those of you with a reasonable about of money, a micro-finance business might appeal to you; particularly as you could play a part in the improving standards of micro-finance or banking in the Philippines. These banks have higher rates of non-performing (foreclosures) loans than the main banks. Some rural banking reforms are currently under consideration including foreign investment (up to 40%) and the ability to offer insurance products.
Another big development in the Philippines is the growth of tourism. The Bicol area has recorded a 163% increase in domestic tourism in the first nine months to Sept 2009, including an increase of over 20% in foreign tourists. The Dept of Tourism has been spending a lot of money on tourism. I have noted the difference on my last tour around the Bicol region and Mountain Province. The Bohol area is another popular place, both for local and international tourists. This is of course important for resort developers. Resort developers are looking further afield than places like Boracay and Cebu, which appeal mostly to the Koreans and Chinese.
Property yields in the Philippines are still pretty reasonable at 9%. I would expect these to rise again from the middle of the year as a result of inflation; though I suggest they will rise in lock-step with higher property prices. Buyers are still interested in the residential market, with the commercial market taking the brunt of the recessional doldrums. The fact remains that remittances to the Philippines are strong, Business Process Outsourcing (BPO) is strong, tourism is up 16% and commodity prices are strong as well. By all measures, the Philippines is ready for business and investment.
We considered in the report the appeal of other markets. Thailand is one country which ranks highly, and others might consider property in Indonesia, which offers higher yields. However Indonesia has very tight visa conditions, and does not demonstrate the same level of fiscal reform. I have for the last 2 years been impressed by the progress of reform in the Philippines. More progress is needed in areas like productivity, reform of the ports, the efficiency and fairness of tax collection, reduction in corruption. Aside from corruption I can see some progress in these areas, but a lot more needs to be done. Thailand's yields are not as attractive at this point.
The improvement of infrastructure will mean a great deal for the country. A few years ago we bought some land in Lipa for P750, and already we are fielding interest at P2,000 per m2.
NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide