HOW will the Philippines’s property sector—which has been experiencing growth as of late—fare once Southeast Asian economies merge as one come 2015 when the region formally establishes an Asean Economic Community (AEC)?
This has been one of the many questions posed by local developers as they anticipate the opportunity to open their doors to an even wider, more diverse market.
Once the AEC comes to fore, there will be a more liberalized trading among the Asean countries—Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Such a development easily creates a vast economic market composed of 600 million people, which accounts for at least 8 percent of the global population, spread across 4.6 million sq m of prime real estate.
This will be a direct result of the removal of both tariff and non-tariff barriers on both goods and services among the member-nations, and is expected to facilitate the creation of deeper, better economic relationships with our partners in the region. Aside from this, local developers will also get a more favorable access to a bigger resource—the regional workforce—that is eyed to play a significant role in fueling a stronger exchange of best industry practices and ideas among the AEC participants.
Opportunities abound
AEC will result in stronger capital inflow and investments, particularly here in the Philippines, which has gained attention from the international business community due to the series of investment-grade ratings that we have received from different crediting firms this year. This now puts the Philippines at a very strategic position, showing a renewed capability to lure investors and sustain good business returns for foreign businesses wishing to make it big in the region.
More industry players also mean increased rate of construction activities where we will be seeing mixed-use residential districts, retail, commercial and office hubs, and key infrastructures—airports, sea ports and many others more—racing to dot the skyline all at the same time. There will be a greater demand for skilled laborers to help the local property sector sustain the increased level of property development.
Also, there will be a significantly higher rate of consumer spending given the huge inflow of goods and services. This will then drive the development of more lifestyle-centric developments, such as malls, retail complexes and properties anchored on tourism, across the archipelago.
Such an event only serves to hasten modernization, increase urban development standards, and drive unprecedented regional growth in Southeast Asia—factors that encourage and sustain direct investments in the region. We will also see more emerging economic hotspots in various parts of the country, particularly in Mindanao—a region deemed as the Philippines’s gateway to the rest of Southeast Asia—as more and more businesses try to get their name out and capitalize on their newfound economic opportunities.
A regional analysis study conducted by Jones Lang LaSalle also revealed “increased corporate real-estate activity is enhancing the pace of transparency improvements in Indonesia, the Philippines, Vietnam and Thailand.”
These countries have created a global reputation for being among the most consistent bearers of progress, owing to the creation of policies that ensure “greater availability of market data and incremental changes in the regulatory and transaction processes.”
All in all, the differentiator that the Philippines can utilize to its advantage will be determined by how it markets itself as a premier regional destination for global investments.
The role of marketing is to help drive greater appreciation toward developments, and eventually help developers avoid getting caught in a competition based on price. By doing the right thing and arming themselves with the right insights, local property developers will be able to bring greater value to Philippine real estate once AEC comes along. –Amor Maclang, Businessmirror
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