Philippine economy still the tiger in Asia

FITCH RATINGS has upgraded to “positive” its rating outlook for the Philippine banking system — citing the generally healthy profile of local lenders, sound operating environment and the Philippines’ strong economic fundamentals — even as it sees a tough year ahead for financial systems in Asia and the Pacific (APAC) amid China’s slowing economy and expected higher borrowing costs in the United States.

Philippines among the bright spots

The Philippines can be expected to remain among Southeast Asia’s “bright spots”

Analysts of the Hongkong and Shanghai Banking Corp. Ltd. (HSBC) and the Bank of America (BofA)-Merrill Lynch said the country’s growth remains consistent with their forecasts for 2015 and 2016.
“From a growth angle there is little to worry about for the Philippines,” HSBC economist Joseph F. Incalcaterra said in a Dec. 14 “flashnote” in the wake of the third quarter’s 6% gross domestic product (GDP) growth that fueled a 5.6% year-to-date pace.

“This tells us that growth is more or less tracking our 5.5% forecast for 2015. While this may not appear stellar when compared with the government’s 7-8% growth target, it is nonetheless a solid performance in the context of decelerating growth elsewhere in the region.”

“Despite some of the challenges for the Philippines over the coming months (an unknown election outcome, Fed lift-off, more volatile remittance inflows, etc.), indicators nonetheless suggest the economy is holding up well,” Mr. Incalcaterra said, adding that the central bank can keep monetary policy steady through early next year amid macroeconomic stability.
Megaworld’s subsidiary GERI records record profits

Meanwhile, Megaworld’s subsidiary Global-Estate Resorts, Inc. (GERI), the country’s biggest developer of integrated leisure and tourism townships, posted a 67% growth in its 9-month net income from P320-million last year to P534-million this year.

“Real estate sales will continue to be the growth driver as we complete our existing projects and prepare the launch of new ones. We also expect rental revenues to grow over time as we open Twin Lakes Shopping Village and Southwoods Mall as well as the office towers in Southwoods City soon,” says Monica Salomon, president, GERI.

Now is a great time to consider that investment in Philippine property, strong ROI of greater that 7% is typical across both condominium and condotel projects, not forgetting the 6% annual capital appreciation. “We are seeing strong interest in Philippine condotels and condominiums as investors become aware of the strength of the Philippine economy,” says Dave Nurse, CEO of Mangga Properties.

With the tax changes affecting UK landlords there couldn’t be a better time!