The first year of the presidency of Ferdinand Marcos Jr. will face tremendous social and economic challenges and his administration’s success over the next six years will be critical to our country’s economic recovery.
Some of the immediate concerns will be the continuing threat of the COVID-19 pandemic on our public health and economic recovery, the limiting impact of the debt that we incurred during the pandemic, and the inflationary impact of the Russia-Ukraine conflict.
On the brighter side, our swift recovery from the Omicron surge point to a possible achievement of herd immunity through our government’s vaccination efforts, while the 8.3 percent GDP growth in the first quarter hint our country’s economic resiliency.
Wishlist
As apt with new beginnings, we wish the Marcos administration success. Also, as the May 2022 election can be considered as a “status quo” vote, we expect the next administration to continue with Build, Build, Build and maximize the impact of Republic Act No. 11659 or the Public Services Act to address our country’s dismal infrastructure situation; spur employment by reopening the economy, implementing back-to-office arrangements, supporting tourism and attracting foreign investments through RA No. 11595 or the Retail Liberalization Act and RA No. 11647 or Foreign Investment Act; and continue with the low interest regime to support the economy.
Although these measures will primarily help in economic recovery, their impact on the real estate industry will be significantly felt as well, e.g., more business resulting in more employment means more real estate requirements.
A recovering industry
There are indications that the real estate industry is already recovering from the pandemic-induced recession which resulted in high vacancy rates, weak demand and softening of rental rates and prices.
The back-to-office order for the business process outsourcing (BPO) industry by the Department of Finance and the continuing Alert Level 1 status in many areas in the country have helped in the real estate industry’s recovery, which can be observed in the growing office, retail, residential and industrial space enquiries, active negotiations and successful deal closures.
The BPO industry is expected to require additional 450,000 sqm of office space in the second half of 2022 to accommodate the employees hired during the pandemic and the projected growth in 2022, which will bring down vacancy rates to around 12 percent from 16 percent.
The BSP Residential Real Estate Price Index has also shown a price recovery in the fourth quarter last year, after registering the lowest prices for all housing segments in the second quarter of 2021. The low interest rate regime has also helped in maintaining decent construction levels and growth in real estate loans, which meanwhile helped spur movements in the industry during the past two years—particularly observed in the condominium market.
Retail companies are also now looking for industrial spaces for their warehousing requirements, mostly in the National Capital Region and Calabarzon areas.
Economic momentum
These are small gains, but the momentum for recovery for the real estate industry—and the economy in general—is notable. Hence, it is to every Filipino’s interest to guard this economic momentum by maintaining the current low level of COVID-19 infection rate through vaccination, availment of booster shots and continued observance of minimum health protocols.
As for the incoming Marcos administration, we look forward to a government that is sensitive to the needs of the people, sensibly run by the most capable individuals, and serious in delivering its “Babangon Muli” promise.
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The article was originally published in Inquirer.NET and written by Sheila Lobien.
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