Wednesday, October 01, 2008 Growth in RP real property sector possible despite US financial woes
DESPITE the threat brought about by the US sub-prime mortgage crisis that has sent America’s financial system reeling and the rising prices of construction materials, the local real estate industry continues to enjoy an “upward trajectory” this year.
Subdivision and Housing Developers Association Inc. (SHDA) national president Eduardo Alunan said the sector remains optimistic about growth in the industry, which has the strong support of the government through the Housing and Urban Development Coordinating Council (HUDCC) chaired by Vice President Noli de Castro.
Growth in the residential property development sector is also guaranteed as the Home Development Mutual Fund (Pag-Ibig) has made housing loans more accessible and affordable through lowered interest rate. Pag-Ibig has also increased its loan allocation for housing this year to P32 billion, or 23 percent more than last year’s P26 billion.
Alunan said the real estate industry is also blessed with the increasing remittances of overseas Filipino workers (OFWs) who have a “strong appetite to own homes.”
In the recently concluded National Developers Convention held at Marco Polo Plaza Hotel, Alunan said the residential property development sector recorded more than 170,000 housing licenses sold in the first half of this year compared to last year’s more than 92,000 licenses.
Protection
Alunan urged SHDA, HUDCC, Pag-Ibig and other financial institutions to work together and strengthen the country’s mortgage system to protect the industry from the impact of the US sub-prime mortgage crisis.
The financial crisis in the United States can be traced to loan defaults in the subprime mortgage sector. The defaults hurt many financial institutions, including big-time lenders.
Dr. Emilio Antonio, president of the Center for Research and Communication Foundation Inc., said the real estate in the country will continue to grow, especially as most OFWs are employed in “recession-proof” jobs in the education and health care services.
Antonio, in making a forecast on the housing sector in the light of the global financial crisis, told participants of the two-day SHDA convention that the Philippine economy is in a better position to cope with the current situation due to the country’s strong cash position, which is the result of proper spending and the increase in national savings.
He said that it is possible that the country’s inflation rate—12.5 percent in August—has already peaked but will continue to be in double-digits until March next year.
“But with the prices of oil being corrected and rice prices declining, it could be that there will be a single-digit inflation toward the second quarter of 2009,” he said.
He warned, though, that if the public and private sectors continue to “insist and maintain a low peso-dollar exchange rate,” growth in the export—which is a major driver of the economy—will be jeopardized. He pointed out that India, China, and Vietnam are now catching up.
He said that competitiveness and positioning are among the keys that can help uplift the export sector. (NRC)
