A long ride

If we are to go by the estimates made by a leading international research company, then the Philippine property sector is in for a long and prosperous ride.

A recent study from Colliers International revealed that around $3 billion annually are flowing into real estate sales. This means that around 20 percent of the roughly $14 billion in OFW remittances last year was spent buying property in the Philippines. This $3 billion will definitely be higher this year, considering that OFW remittances went up by 26 percent during the first four months of the year (from $3.7 billion to $4.7 billion) and that local property developers have doubled if not tripled their efforts at wining and dining Filipinos overseas to invest in real estate here.

Ask any major property developer and they will tell you that overseas Filipinos now account for a very large part of their sales.

The 24 percent increase in OFW remittances during the first quarter happened despite the 12 percent drop in the number of workers deployed, due to an increase in the deployment of highly skilled and better paid Filipinos. Majority of the remittances came from the US, Canada, the UK, Italy, Saudi Arabia, United Arab Emirates, Japan, and Hongkong.

Colliers, in its study, has just reflated land values after six years of continuous decline, saying land value appreciation is justified by increased pricing power of developers in both the office and residential segments, impressive take-up in residential pre-sales market, and pre-lease take-up in the office market considering that Manila has not historically been a strong pre-lease market.

At the close of June, developable land in the Makati central business district is estimated at an average of P235,000 per square meter, compared to the previous quarter’s valuation of P222,500 per sq.m. In the course of the year, it is estimated that land values will further increase by nearly five percent to an average of P245,000 per sq.m.

In the Ortigas CBD, estimates point to an average land value of P114,750 per sq.m., up seven percent quarter on quarter. This comes from the previous quarter’s valuation of P107,500 per sq.m.

Meanwhile, Makati CBD residential prices appreciated by nearly seven percent in the first semester of 2007 at an average of P88,000 per square meter. By the end of the year, valuation is estimated at P90,750 per sq.m.

While mid-income housing registration was down by 17 percent for January to March 2007, licenses to sell approved by the HLURB for the high-rise residential segment went up 13 percent in the same period compared to last year. Colliers estimates point to an average pre-sales rate of 75 for all projects currently in the market.

Almost everybody in the property sector is optimistic that this boom will continue for a very long time. It will no longer be your typical boom and bust cycle as both developers and buyers have learned their lessons well from the ’90s disaster that hit and scarred the local property sector.

Empty celebration

As the National Telecommunications Commission (NTC) celebrates its anniversary, one can’t help but wonder whether or not its employees are one in the celebration.

Concerned employees complain that the recent rigodon among key posts in the NTC has made the celebration empty.

There are claims that the rigodon was designed not only to accomodate certain people close to NTC commissioner Abraham Abesamis but also to hide certain transactions concerning allegedly anomalous sale of frequencies.

Among those affected by the reshuffle are Alvin Blanco and Precy Demition who head the broadcast and frequency departments, respectively. Under the new organization, Lito Leynes formerly of radio regulations will now handle both the National Capital Region and frequency while a certain Ariel Padilla will now head broadcast. Sources say that with Blanco and Demition heading these departments, there was no way that this anomalous sale would have pushed through with NTC sanction.

One of these allegedly anomalous transactions involves the sale by Raymund Moreno, owner of Liberty Broadcasting, of certain frequencies which were not declared as assets of the debt-ridden company. Liberty’s creditors are now scrambling about, questioning the sale of supposedly company assets by Moreno which he claims to be personally his property.

In the meantime, Liberty Telecom Holdings, Liberty Broadcasting, and Skyfone Logistics have filed a petition for corporate rehabilitation with suspension of payments with the Makati Regional Trial Court branch 149.

Sources from inside the NTC say that a certain personality associated with Jaime Dechavez is seen frequenting Abesamis’ office. This personality is said to be responsible for facilitating the sale by Moreno of one of the frequencies to another telecommunications company and for speeding up the NTC approval process.

If it is true that the disputed frequency is the one being used by this telco for its recently launched new service, then this telco will be in very big trouble. This early, other telcos are planning on questioning why this particular frequency was awarded to it without going through the usual process.

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