Philippines on verge of economic boom
MINORU SATAKE, Nikkei staff writer
SOURCE LINK:
http://asia.nikkei.com/Business/AC/Philippines-on-verge-of-economic-boom

MANILA — Philippine developer Ayala Land plans to go on a housing and shopping mall spree this year.

The builder plans to invest 100 billion pesos ($2.27 billion) in 2015, 40% more than it did last year. Chief Financial Officer Jaime Ysmael said. Of that amount, 43% will go into building condominiums in the Manila metropolitan area as well as detached homes on the capital’s outskirts, Chief Financial Officer Jaime Ysmael said.

The number of homebuyers is increasing in this country of 100 million as the middle class continues to expand in pace with economic growth. On the outskirts of Manila, other developers are also building homes.

Ayala Land will spend 25% of its 2015 investment budget constructing shopping malls, hotels and office buildings. The company currently operates 16 shopping malls across the Philippines. The number is expected to rise by eight by the end of 2016, according to local news reports. In the southern part of Luzon Island, where the capital is located, Ayala Land has teamed up with local retailers on a 1.6 billion-peso shopping mall. The facility is to open its doors by the end of the year.

The company is also working toward opening a new Mandarin Oriental hotel in 2020 under a management deal with the Mandarin Oriental Hotel Group. Ayala Land closed Mandarin Oriental Manila, in the city of Makati, last year. The hotel had been open for nearly 40 years and was showing its age.

The company is now building City Gate, a large-scale commercial complex that will house shops, offices and a hotel in Makati. The project is expected to cost 7 billion pesos.

Booming economy

Consumer spending accounts for 70% of the Philippine’s gross domestic product. And much of this spending has been driven by the more than $20 billion expat Filipino workers send home every year. Now other sectors of the economy are pitching in. Call centers and other business service industries are booming. And a growing number of Filipinos are holding down good-paying jobs, such as crewmen on merchant ships.

The International Monetary Fund expects the Philippine’s per-capita gross domestic product to exceed $3,000 this year. Once a country tops this mark, it is typical for purchases of automobiles, home appliances and other durable goods to sharply increase.

Ayala Group, a 180-year old business, is not alone in preparing for a coming flood of consumerism. Other Philippine conglomerates, like the SM Group and Gokongwei Group, have also been putting up shopping malls.

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For Ayala Land Premier property inquiries:
COCO MIDEL
M: +63.917.502.9252
T: (02)577.27.12
E: coco.ayala@gmail.com