The wheels of trade and commerce must go on turning

Like it or not, the volatile political situation is creating a dent in the business scene.  The highest inflation rate in quite a long time was registered in February this year, when the senate and congressional upheavals came to unfold.  Virtually everyone now is involved, glued to their TV sets, awaiting the developments, and even the heretofore apolitical citizens are not fence sitters anymore, taking a stand, wherever that may be.

Our business leaders are starting to worry, yes, but they are not about to take the “backslide” with a grain of salt. For instance, the Countryside Development Foundation (CEDF) members are looking at ways and means of correcting the negative effects brought about by the political maelstrom.

The CEDF is made up of the country’s top business organizations, among them the CREBA (Chamber of Real Estate and Builders Association, the Philippine Chamber of Commerce and Industry (PCCI), Chamber of Mines, Filipino Chinese Chamber of Commerce and Industry, Employers Confederation of the Philippines, Financial Executives Institute, Philippine Exporters Confederation, Federation of Philippine Industries, and the National Federation of Hog Farmers. This membership virtually covers all the strategic business sectors in the country, and to have its industry leaders sit together en banc to help solve the country’s economic woes augurs well for this troubled country.

CREBA founding chair Manuel Serrano, concerned about the plight of our compatriots in the countryside, seeks the participation of major business in helping to alleviate poverty here by creating more jobs and additional revenues for the local governments.  Incidentally, it is interesting to hear from Mr. Serrano that he disagrees with the thought of many that the country is experiencing a real estate boom.  He says that what they in the CREBA think is that the property sector boom is what we experienced before the Asian crisis in 1997. Though there is a palpable improvement in real estate and construction, we cannot consider this as a boom, not yet, because there are far less major players now in the development market.  To date, there are only about twenty or so major property developers, compared to the hundreds pre-Asian crisis. According to him, the money is abroad, where the market is.

Anyway, the CREBA’s proposal of OFW investment bonds seems interesting. This seeks to raise funds for housing loans, a private fund for OFWs that could raise P15 to 16 billion if properly handled. With this scheme, house and lot packages will be sold to OFWs at a hefty discount.  The figure floated here is 10 percent.

Under this scheme too, they guarantee that the OFWs will enjoy a preferential rate of increase, with the balance payable long term, as long as 25 to 30 years. Most importantly, the fund is owned by those who have enrolled in the project. In other words, those who buy the bonds will own the entire OFW housing fund.

The CREBA is now trying to re-activate dormant realtors, especially those who got “burned” during the financial crisis of ’97, and tap them to join in this nation-wide effort. All sorts of housing projects all over the country will be made available, from horizontal (townhouses, etc), to vertical (medium and high-rise).

What happens if the sub-prime fiasco in the United States happens here as well?

“That will never happen here,” Mr. Serrano assures us. Apparently, the key to the whole sub-prime mess, as explained by Mr. Serrano (and he should know!) is the documentation process. There, as in other major countries as well, the transfer is effected to the new buyer’s name immediately after receipt of the down payment, and the balance is covered by real estate mortgages. When arrearages happen, the developers start foreclosure proceedings, and proceeds to auction the delinquent properties after a prescribed period. I understand from sources that many Chinese business conglomerates have bought this secondary market at a good price, and are just sitting on these properties before cashing in on them. They can certainly afford to sit on these cash cows indefinitely. It’s no big secret that  China and its businessmen are awash with money right now and are turning into sub-prime properties, not only in the United States but also in Europe and other parts of Asia like Japan for instance, to plunk their excess money into. Just wait out the low property prices for a few years, and they can cash in the properties three, maybe four times the original price.

Sound practice dictates that, under the Contract-to-Sell, the title is transferred only upon full payment. Under CREBA’s standards, when arrearages happen, the account should be immediately cancelled and the property sold to other parties without need for lengthy and costly litigation, which is most likely if titles of ownership will be included in the consideration.

The member business organizations have been tapped to evaluate investment potentials to provide revenues for local governments as well as employment. They ask only that these local governments scrap the bureaucratic red tape, facilitate the issuances of licenses, etc., ensure industrial peace in the region, and freeze realty taxes for five years to make the project viable-a case of quid pro quo.

As yet, they are still trying to finish the linkages with the proper government agencies and finalize the credit facilities that may be extended to investors at preferential interest rates.

The PCCI, on the other hand, is working with the Countryside Economic Development Foundation to identify the best areas in the country for investment and, conversely, the worst areas that need private investments to get them off the ground, as revealed by PCCI president Sammie Lim. Like CREBA, they have identified housing as the most likely type of investments they would push for these areas, though they are not discounting other types of investments as well.

An opportunity to make money without even selling?

Out-and-out sales people would probably frown at the idea that anyone can make money even without learning and going into the intricacies of sales. But then, being go-getters, which makes them successful in their field, they would surely be curious and explore the possibility being offered by Philippine Realty Listings.

Asia Pacific Realty Holdings, which manages Philippine Realty Listings are in the thick of conducting seminars that center on the premise, “You don’t have to be a sales genius to earn big bucks.” 

Well, a windfall of earnings may just be a phone call away. You can check out these seminars by calling 631-88-22.

Mabuhay!!!  Be proud to be a Filipino.

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