PH urged to prepare for boom in global retirement market
THE PHILIPPINE property industry—buoyed in recent years by the business process outsourcing (BPO) sector boom and growth in overseas Filipino remittances—can find a new catalyst in the retirement sector as the global aging phenomenon explodes in the next five to 10 years, property consulting firm Jones Lang Lasalle (JLL) said.
The country, however, should start preparing now the infrastructure that will enable it to get its fair share of the global retirement market, David Leechiu, JLL regional director and Philippine country head, said in a briefing Thursday.
“Global aging population is going to exponentially jump very soon. That’s five years from now and if we’re in the Philippines, how do we take advantage of this market?” Leechiu said.
Between 2006 and 2030, the number of older people in less developed countries is projected to increase by 140 percent and in developed countries, by 51 percent.
“At some point, you will have economies getting crushed by aging population, which today everyone is taking for granted,” Leechiu said, noting that in five years, there would be more than 400 million people hitting retirement age globally.
The Philippines, where quality healthcare is more affordable and with its vast pool of nurses and medical workers, is well-positioned to capture this market, he said.
In a briefing Thursday, JLL regional director Lindsay Orr said there were about 303 million people above age 65 in Asia based on July 2013 data, 119.9 million of whom were in mainland China.
The Philippines’ advantage over other Asian countries, Orr said, was that it was among the three countries in the region with the lowest cost of living. In this market, he said the currency exchange rate was favorable while housing and labor expenses were low.
The special resident retiree visa (SRRV) visa offered by the Philippines allows retirees to settle in the country for as long as they want. Most enrolees for the SRRV visa at present are from mainland China (30 percent).
Other factors going well for the Philippines are the inherent Filipino hospitality, the country’s natural attractions like beaches, tropical climate and its English-speaking people.
Top retirement destinations in the country are Baguio, Cebu, Dumaguete, Clark, Davao, Tagaytay and Subic. In Metro Manila, Makati is noted as the top choice of foreign retirees.
But Leechiu also noted that the Philippines would have to prepare the infrastructure of this country. To invest in the massive infrastructure requirements of the local economy, he said the need to attract foreign capital could not be underestimated.
JLL is supporting the liberalization of foreign equity ownership in various industries. If allowing 100 percent foreign ownership of corporations is unrealistic, JLL believes that at the minimum, foreigners should be allowed to own 51 percent of corporations.
At present, only a maximum of 40 percent foreign equity ownership is allowed in the following segments: development and utilization of natural resources; ownership of private lands; public utilities; educational institutions; culture, production, milling and trading of rice and corn; development of condominium units; operation of deep sea commercial fishing; adjustment companies, contracts for supply of materials, goods, and commodities to government corporations.
Up to 30 percent foreign equity is allowed in advertising; up to 25 percent allowed in private recruitment agencies and contracts for construction and repair of locally-funded public works; and up to 20 percent in private communications network.
Meanwhile, no foreign equity is allowed in the following: mass media, small-scale mining, private security agencies, ownership/management of cockpits, practice of profession (pharmacy, radiology and x-ray tech, criminology, forestry and law), cooperatives, retail enterprises with capital of less then $2.5 million and utilization of marine resources, among others.
Leechiu said it’s unfortunate that the liberalization of economic restrictions in the Philippine Constitution had been put in the back burner, saying this should be a top priority.
JLL is also batting for an increase in the length of lease terms to 80 to 90 years as well as “credible” and “sensible” master-planning.
