BSP quashes property asset bubble fears

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BSP quashes property asset bubble fears

SDA fund release won’t fuel speculation, says exec

By Doris C. Dumlao
Philippine Daily Inquirer
| October 10, 2013 at 2:57 am

Condo buildings under construction across from the Ninoy Aquino International Airport Terminal 3 in Pasay City; photo taken on Feb. 9 2013. The Bangko Sentral ng Pilipinas said it sees “no definitive evidence” of an asset price bubble in the Philippine property market, citing strong economic fundamentals and improved monetary conditions supporting actual demand for real estate. PHOTO BY RICK ALBERTOThe Bangko Sentral ng Pilipinas sees “no definitive evidence” of an asset price bubble in the Philippine property market, citing strong economic fundamentals and improved monetary conditions supporting actual demand for real estate.


In a forum organized by The Asset Magazine and Banco de Oro Unibank, property experts, including developers and a global real estate advisory firm, echoed the central bank’s sentiments, citing healthy demand in the residential, retail and office segments alongside improving demand for industrial and tourism-oriented property.

According to BSP Deputy Governor Diwa Guinigundo, the property upswing in the country was “fundamentally supported,” citing the big backlog of housing demand from end-users, rising trade activities and the business process outsourcing industry which, in turn, helped boost demand for office and commercial space.

And now that the Philippines has secured an investment grade from all major international ratings agencies, demand for local office and commercial space will continue to grow in the next few years, Guinigundo told those who attended the forum.

Specifically, he said, growth in rental rate has been benign, especially in the office space market.

Also, across the region, there is still a potential for a “re-rating “of prices given that real property prices are still one of the cheapest in Asia.

In terms of real estate financing, he added, the levels are lower than that seen before 1997. And although loans have been growing by double-digit rates, loans to other sectors have been on the rise as well.

Guinigundo said government spending—which also helped boost the country’s economic growth rate to 7.5 percent in the first half—was likewise driving construction activities.

The monetary official is not worried about speculative activity in the property market and the release of over P1 trillion from the BSP’s special deposit accounts.

“The profile of lenders to the BSP, through SDA, is quite different from those going to the real estate market. In the first place, not everyone going to real estate is a speculator. Some of these are investments, some are from end-users buying their first home. Not every single demand going to real estate is speculative,” Guinigundo told reporters after his speech.

“While it is true that you’ll be releasing more than a trillion pesos in SDAs, and 30 percent of that actually went out at the end of July and the rest [will go out] by end-November, I think the numbers will indicate that most of them actually come back to the BSP, this time as bank (placements in) SDA. In other words, there’s a return to the SDA facility of the BSP, in which case, we’re able to mop up the excess liquidity.”

On the other hand, he said, those going to other instruments like peso time and savings deposits could be lent out to fund other economic activities.

“This is consistent with our objective: We want to push out funds that can help deepen and develop the capital markets,” he explained.



If you are interested to know more about Ayala Land Premier properties, contact me at 0917-5029252 or email


ALI + JV Partners

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Ayala Land scouts for more partners

PROPERTY DEVELOPER Ayala Land, Inc. is banking on partnerships to speed up its growth, the company said in a statement yesterday.


“Ayala Land… continues to look for partnership opportunities across the country to accelerate expansion amid the continuing robust growth of the Philippine economy that is fueling demand for real estate products,” the company said.

The economy expanded by 7.6% in the first semester from 6.4% a year ago.

Bernard Vincent O. Dy, the firm’s chief operating officer, said joint ventures will allow Ayala Land to “accelerate its expansion while preserving its capital resources and minimizing development risk.”

“If you look at our history, a lot of our expansion was mostly done through partnerships, starting with the Madrigals for the development of Ayala Alabang, then with the Yulo family for Nuvali [in Laguna], the Florendos for Abreeza in Davao, and with the Campos group and BCDA (Bases Conversion and Development Authority) for Bonifacio Global City,” Mr. Dy was quoted in the statement as saying.

Ayala Land also teamed up with the Cua family for Circuit Makati; the Lacson family for Ayala North Point in Negros Occidental, and the Pison Group for the Atria project in Iloilo City. The company said “more partnership agreements [are] currently under negotiation.”

“With partnerships, we are able to optimize use of capital and at the same time reduce risk, allowing us to expand in a quicker way while minimizing the strain on our balance sheet,” the statement quoted Jaime E. Ysmael, Ayala Land’s chief financial officer, as saying.

Ayala Land previously partnered with the Store Specialists, Inc. for its department store venture, and another deal with the Tantoco family to bring in Family Mart convenience stores from Japan.

In the second quarter, the company signed a deal with Puregold Price Club, Inc. for the establishment of supermarkets.

It also entered the health care business through a joint venture with the Mercado Group, which owns Mercado General Hospital, Inc.

“More partnerships will soon come out of the pipeline as Ayala Land expects demand for real estate products to continue growing on the back of the rapid growth of the Philippine economy,” the statement read.

Ayala Land ended the first half with a net income of P6.62 billion, up 23.28% from P5.37 billion earned in the same six months last year.

The same comparative periods saw revenues rising 35.67% to P36.63 billion from P27.0 billion and cost and expenses increasing by 39.00% to P27.51 billion from P19.79 billion.

Shares of Ayala Land shed 10 centavos or 0.33% to close P29.90 apiece on Monday from P30.00 each on Friday last week.

Philippine financial markets were closed yesterday in observance of the Eidul Adha Muslim holiday. — C. H. C. Venzon



TO know more about Ayala Land Premier lots and condos, call me at 0917-5029252.


Garden Towers – Tower 2

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Screen Shot 2013-10-14 at 5.38.26 PM


Garden Towers – TOWER 2.   Hi Everyone, For the past months, we were just offering 2 bedroom units  in Tower 1 of Garden Towers. Just recently, we have now started to offer Tower 2.  We have full inventory of units – from 1 bedroom, 2 bedroom, 3 bedroom, and Penthouse units.  The prices are more or less the same as Tower 1.

GT location map showing Tower 1 and Tower 2

GT location map showing Tower 1 and Tower 2

We are also celebrating Ayala Land Inc’s 25th year Anniversary, so we are offering very special payment terms for any reservations made until Oct 31.   Let me know if you are looking at getting a condo unit in Garden Towers.


M: +63.917.502.9252
T: (02)577.27.12

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