Breaktime: Property bloom

While public transport remains its biggest weakness, that spanking central business district (CBD) in Taguig—the 240-hectare “Bonifacio Global City” owned jointly by the government, the Ayala group and Evergreen (Unilab group)—still seems to draw the “right” kind of locators in this long-running property boom in the metropolis.

Huge companies already set up offices there, such as Philamlife, the Aboitiz group, Colgate-Palmolive, HSBC, Sony Philippines, Sun Life, Pru Life Insurance, Chinatrust Bank, 3M Philippines, Hewlett-Packard, Intel, Coca-Cola, Avida and Globe Telecom.

Surely, many other companies can only be expected to follow suit, despite the absence of public transport in BGC, although the government has been threatening to build a monorail system there for the longest time.

Well, it seems that big business—the erstwhile near monopoly of nearby Makati—clearly finds Taguig City itself rather welcoming to investments, not to mention the LGU’s outstanding record in good governance.

Note that the battle cry in Taguig nowadays is “bawal ang corrupt,” which was an apparent take-off from the “bawal ang tamad” slogan in another similar government development project called Subic during the time of former Senator Richard Gordon as SBMA chair.

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Even a resurrected company called PhilRealty (Philippine Realty & Holdings, the developer of landmark sites such as Tektite Tower and Alexandra upscale condos) wants to go full blast into BGC projects, building hotels, condos, and office buildings there, which the company collectively called “Project Cube 5th Avenue.”

Having been a key player in the real estate sector at the height of the boom in the 1990s, the company has been under receivership in the past 17 or so years; it was one of the many victims of the 1997 East Asian financial crisis.

But starting this August, PhilRealty will have a new president and CEO in Andrew Alcid, who will inherent a much healthier firm from the retiring Amador Bacani, who in turn steered the firm during its most difficult times under rehabilitation, although for his part, Alcid has more than 25 years of experience in high finance, having worked abroad with Citibank, Merrill Lynch and Salomon Brothers.

Now the PhilRealty project at the BGC may turn out be another example of its new tact in property development, because it is moving—“strongly and aggressively,” according to CEO Alcid—toward the upscale market.

It wants to jumpstart what is known in urban planning as “gentrification” of areas in Quezon City, for instance, which enjoys as the largest area in the entire Metro Manila but it still only has a few upscale property developments. Thus PhilRealty is taking off in its new upscale direction with the 31-story “Sky Villas,” which is a five-tower 2-hectare P10-billion project in Quezon City, collectively known as “Andrea North.”

Alcid defines luxury in property development simply as having the fewest people possible in large spaces, which was the guiding principle behind the Sky Villas Tower, with only about a hundred units of at least 200 square meters each. Plus, unlike other condo developers, PhilRealty only started selling when the construction was already on the 20th floor. In short, you can already see what you are buying.

Really, how many condo buyers are still waiting for delivery of the units that they bought several lifetimes ago? There is no law penalizing delinquent property developers, right, and everybody has been saying that there ought to be one.

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Still, the whole point in urban development is for the people to reap the benefit of the LGUs’ rich revenues in property taxes, and such has been evident in the blooming Taguig, thanks to the boom in BGC, precisely as a result of its unprecedented march towards becoming one of the premier CBDs in the country, which the likes of Quezon City and Manila, or perhaps even Pasig (with its minor league Ortigas Center), cannot as yet claim.

Recently a series of short ads on TV boasted of the existence of comprehensive education and health programs in Taguig City, which were most probably designed for the political plans of the husband and wife power in Taguig, Sen. Alan Peter Cayetano and his wife, Mayor Maria Laarni.

The ads were nevertheless Taguig’s way to match the media campaign of its archrival for control of the fast developing BGC, which was none other than Makati, whose current political leadership headed by Mayor Jejomar Erwin Binay Jr. already started a media blitz, boasting about the 30 straight years of welfare state in Makati, or ever since the time his father, Vice President Jejomar Binay, who became Makati’s officer-in-charge in 1986.

But Taguig has something going for it that Makati does not: The World Bank imprimatur of good governance. You see, the World Bank ranked Taguig as the top city in the Philippines in its “Ease of Doing Business Index,” which has been conducted by its investment arm called International Finance Corp.

Look, Makati was a distant No. 9 in the index; and Quezon City, well, No. 13.

In Taguig, the LGU gross tax collections were consistently rising from P3 billion in 2010 to P4 billion in 2011, P4.5 billion in 2012, and P5.4 billion in 2013. A good chunk of the collections came in business taxes, which rose from P800 million in 2010 to P1 billion in 2011, P1.3 billion in 2012, and P1.6 billion in 2013. And take note: Taguig never increased any of its tax rates all those times.

From what I gathered, Taguig today has college scholarship fund of roughly P400 million every year, already benefiting close to 25,000 students residing in the city, which gains, at least to the guys down here in my barangay, should be the exact model for other urban developments in the country, instead of the LGUs’ merely putting the tax collections into projects for big business. You know—like subsidies.

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Recently, the World Economic Forum (WEF) chose Manila Water (part of the Ayala group) as “Global Growth Company,” the only Philippine company to receive the distinction, putting it in the same league as 20 other companies in the East Asian region.

In the WEF lingo, which by the way is also the organization that ranks countries in terms of their competitiveness, the GGCs are “fast-growing companies with the clear potential to become global economic leaders.”

According to WEF managing director David Aikman, the organization actually assessed the would-be GGCs on their business model, annual revenues and growth rates, plus executive leadership and market position.

To think, when Manila Water took over part of the water distribution system in Metro Manila back in the 1997, it had to deal with big problems such as widespread meter tampering and outright illegal connections, not to mention the problem that water was available only for around 16 hours a day.