SPECIAL REPORT
X'mas spending evolving toward 'more important' purchases
By Daxim Lucas
Philippine Daily Inquirer
First Posted 17:14:00 12/24/2007
(Part 1 of 2)
A FEW years ago, the holiday season would have meant lots of free time from work for John Victor Antonio.
His business, after all, is the real estate industry. Sales in this business are not known to be pronounced during Christmas, where most of the spending is instead channeled toward food and consumer items.
Not anymore.
"Christmas has become quite a busy time for us," he said in an interview. "More and more, we see clients buying property in December so we have had to adjust."
Antonio is the chief operating officer of Century Properties Inc., a firm which has, of late, focused more and more of its selling effort toward the estimated eight million expatriate Filipino community.
The reason for this is the sharp increase in recent years of remittances sent home by overseas Filipinos, which has boosted the local economy, encouraging spending not only on consumer goods but also on so-called "consumer durables" as well as investments.
According to Antonio, the propensity of expatriate Filipinos to spend either for themselves or their local relatives becomes even more pronounced when they visit the Philippines during the holidays as "balikbayan" (returning overseas Filipinos).
"From February to November, our target is to build relationships with them," he said. "But from late November to January, our target is to actually sell because that's when they're all here."
Antonio points out that while Century Properties sells about 50 units a month from the February to November period, this number jumps to 70 units a month in December and January.
Overseas Filipino workers (OFWs) have become so influential in the market that as much as two-thirds of Century Properties' sales are made to expatriate Filipinos, he said.
"We're very focused on OFWs, but we can see this phenomenon even with other companies where up to 30 percent of sales are made to this segment," Antonio said.
The Bangko Sentral ng Pilipinas (the Philippine central bank), which closely tracks where dollar remittances are used, agrees that the spending patterns have been changing of late.
"We see more people setting aside money for investments," BSP Deputy Governor Diwa Guinigundo said in an interview. "People's attitudes are changing."
He pointed out that while the beneficiaries of OFW remittances tended to splurge on consumer items in the past, evidence is emerging that a steadily growing percentage of funds are being set aside for education, savings and investments, including investments in real estate.
More importantly, Guinigundo pointed out that spending on traditional big-ticket purchases have also declined.
"Spending on motor vehicles has come down, while spending for housing is always there," he said. "I guess people are beginning to understand that remittances will not be there forever." (To be concluded)
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