In my previous columns, I emphasized how Southern Luzon has always been a major growth driver of the Philippine economy.
Being the Philippines’ primary industrial hub, the region is one of the key contributors to the country’s annual economic output, accounting for about 14.5 percent of the gross domestic product (GDP).
Region IV-A (Calabarzon), however, attracts not only high-value manufacturers, but also property developers, who have been aggressive in acquiring parcels of land here to capture demand from both investors and end-users. Colliers Philippines believes that residential demand in Calabarzon will continue to thrive and the following macroeconomic indicators only bolster the region’s growth prospects.
For one, the region has seen its economy expanding by an average of 6.5 percent annually from 2017 to 2019. Aside from industrial and commercial activities, the corridor is also a major recipient of remittances from overseas Filipino workers (OFWs). These continue to keep the region’s economy afloat, fueling the demand for property segments such as office, residential, leisure and industrial.
Infrastructure projects further enhance the competitiveness of Calabarzon as an industrial hub. These public projects likewise entice property developers to build up their landbank here and put up integrated communities as well as standalone residential projects that can cater to rising demand for such spaces in the region.
Industrial drives demand for residential
Data from Philippine Economic Zone Authority (Peza) revealed that among the firms planning to expand existing operations in Laguna industrial parks are manufacturers of safety switches, semiconductors and packaging materials. Several Japanese firms have also committed to build warehouses. A number of industrial locators have secured first-mover advantage in Laguna and this contributes to greater residential demand in the province.
Improving connectivity
Several infrastructure projects are in the pipeline and we see these further unlocking industrial and residential values in Laguna. These include the Cavite-Laguna Expressway (Calax).
According to the Department of Public Works and Highways (DPWH), the road project is likely to ease congestion in Cavite and Laguna and provide efficient transport facilities to industrial areas in the two provinces. Among the areas likely to benefit from the project are Governor’s Drive, Aguinaldo Highway, Tagaytay and Sta. Rosa. The project also aims to reduce travel time from Cavite Expressway (Cavitex) to South Luzon Expressway (SLEx) by about 45 minutes.
Another major road project in Metro Manila we see benefitting Laguna and nearby areas in Southern Luzon is the NLEx-SLEx Connector Road. The project aims to reduce travel time from North Luzon Expressway (NLEx) to South Luzon Expressway (SLEx) to just 20 minutes. Due to be completed this year, this road is also seen to reduce travel time between two major industrial hubs—the CALABA region in Southern Luzon and Clark, Pampanga, in Northern Luzon. Once completed, we see the project stoking demand for industrial space and residential projects in both CALABA and Pampanga.
The construction of the Southern Luzon line (PNR Batangas City Station) of the North-South railway project and the planned revival of a rail cargo line from Manila to Laguna should play a vital role in funneling major manufacturing investments to the CALABA region.
Solid growth prospects
Colliers believes that the Laguna residential market will also benefit from the expansion of manufacturing companies outside of China. In the near to medium term, we are optimistic that the region will continue cornering bulk of foreign investment pledges and this should result in a robust regional economy even beyond the pandemic.
In our view, these developments, along with the government’s infrastructure and decentralization push, should ensure the long-term growth of Laguna and further solidify the area’s viability for property investments.