INCREASED consumer spending this year triggered mainly by remittances from overseas Filipino workers (OFW) continues to fuel the growth in the country’s consumer market and real estate industries.
During the 2nd Annual Philippines Investment Conference last Thursday at the Shangri-La’s Mactan Island Resort and Spa, stakeholders in the consumer market and real estate industries foresee a strong potential growth in these sectors, owing to the indicators of economic growth that the Philippines is experiencing today.
“In the last three years, we have seen (an) increase in spending among the ABCD markets. This year, there is a double-digit growth for food consumption among the poorest or the E market,” said Ysmael Baysa, Jollibee Foods Corp. vice president and corporate finance and chief finance officer.
“One-fifth of the households in the Philippines are now visiting formal restaurants at least once in every four weeks. We see more people going out and eating out or buying some items compared to last year,” Baysa said.
Billions
Baysa reiterated that the growth in consumption is still attributed to the high remittances of OFWs in the last three years despite continued appreciation of the local currency to the dollar.
OFW remittances last year reached $12.8 billion coming from the eight million Filipinos working overseas. The figure is estimated to hit $14.7 billion this year.
Teresita Sy-Coson, SM Investments Corp. vice chairperson, echoed Baysa’s forecast saying the Filipinos’ high consumption spending this year is seen in the increase in purchase of big-ticket items like furniture, and houseware like refrigerators, air-conditioning units, among others, due to low interest rates provided for by companies.
Coson also noted an increase in foreign visitors to malls, which is linked to the public and private sectors’ strong initiatives in promoting Cebu and the Philippines as a viable investment and leisure hub in Asia.
In another panel discussion, Frederick Go, president and chief operating officer of Robinsons Land Corp., said high disposable income has led to more Filipinos investing in the real estate industry either as end consumers, semi-end users or as a means of investment.
Go said the country’s property sector is seeing huge developments for residential housing especially among the upper middle class earners; office buildings, driven also by growth in the business process outsourcing (BPO) industry; and increase in demand for condominiums.
With the aggressive tourism drive, Ambassador Jose E.B. Antonio, chairman of the Century Properties Group, foresees growth in tourism-related developments like hotels and resorts in the next three years.
Jumpstart
“Tourism helps jumpstart the economy and will always have a real estate dimension in it,” added Maria Cristina Valera-Turalba, vice chairman for Active Group Inc.
According to Ong Beng Kheong, the Philippines is the “cheapest place to live in” compared to Vietnam in terms of residential and office space.
Ian Riches, executive director for Lim Advisors, saw the popularity of mixed-use developments “as more people want convenience in defining what they do everyday.”
Go added that mixed-use developments, which include a hotel, mall, offices and condominiums, is “very suitable” for the Philippines especially in the area of accessibility.
“Traffic here is not cooperative. Majority of buyers now want to be a part of a larger integrated complex,” he said.
Baysa called the growth in both consumer and real estate markets a “symbiotic relationship” since increase in consumer spending depends on the number of food outlets available, and the latter is dependent upon the availability of more rental spaces.
Increase in call center establishments, for example, has paved the way for growth in the food service sector. (MMM)
