Philippines tops regional sentiment

By: Daxim L. Lucas - 11 years ago

The Makati central business district. Optimism on the prospects of the Philippine economy is at its highest level in recent history, thus giving the country arguably the best investment climate in Asia, according to a study made recently by London-based Economist Corporate Network. INQUIRER FILE PHOTO

MANILA, Philippines—Optimism on the prospects of the Philippine economy is at its highest level in recent history, thus giving the country arguably the best investment climate in Asia, according to a study made recently by London-based Economist Corporate Network.

In a briefing on Thursday, Christopher Fossick, managing director of international property consulting firm JLL, which commissioned the report, said 49 percent of multinational corporations surveyed in the region ranked the Philippines at the top of the 14 major Asian nations in the pile.

“When it comes to the investment climate, as far as these multinationals are concerned, the Philippines is effectively number one in the region,” he said. “And this climate is definitely improving.”

The study actually ranked Myanmar ahead of the Philippines, with 77 percent of polled multinational firms saying things were improving, but Fossick pointed out that the country represents a special case.

“Myanmar’s doors are just opening [to foreign investors] so the Philippines is effectively number one in the rankings,” he said.

The study made by a unit of The Economist noted that 44 percent of all survey respondents believed that the Philippines’ investment climate is “staying the same,” while only 6 percent said that it was “worsening.”

“And those that had a negative view on the Philippines were probably industry-specific,” he said.

The respondents covered 334 large multinational corporations operating in Asia from a wide array of sectors like pharmaceuticals, banks and retail. Seventy percent of respondents had global revenues of at least $1 billion, and 80 percent of them were headed by non-Asian multinationals.

The country was ranked by these executives ahead of China, Indonesia, Vietnam, Malaysia, Japan, Singapore, India, Thailand, Hong Kong, South Korea, Australia and Taiwan. They were most bearish on India where 32 percent of respondents said the investment climate was deteriorating, followed by 22 percent in China who believed prospects were turning south.

As such, the JLL official predicted that the local real estate market—especially the office, commercial and residential sectors—would be a direct beneficiary of the bullish sentiment.

“We expect the capital value of the Philippine [property] market to reach $300 billion by 2031,” Fossick said, saying that this represented an increase of over 50 percent from the projected $134 billion value by 2021.

More significantly, this would represent a sharp rise over the aggregate capital value of the local real estate market of only $48 billion recorded in 2011.

For this year, JLL expects capital values of office real estate in Metro Manila to rise by between 10 and 20 percent, while rental values would increase by between 5 and 10 percent, due mainly to the continuing strong demand from the business process outsourcing sector.