Yes, there’s market for those condos

One other thing BSP Governor Say Tetangco confirmed to me during his briefing of the EDSA Shangri-La Tuesday Club last week is the absence of a property bubble. Yes, the BSP is closely monitoring bank lending to the property sector but as of the moment, the bank regulator doesn’t see anything amiss.

I know that for some people even the reassurance of a most prudent BSP governor is not going to be enough. And I can understand the skepticism given the nasty persistence of people selling all those condo units in trying to bag buyers. We get so much spam on our phones and e-mails and brochures are shoved at us everywhere we go. These all seem to be signs of desperation.

I recall the assurances of Rockwell Land’s Tong Padilla that at least for the high end developments, the market is still very promising. For one thing, Tong loves to point out that there are at least 20,000 Pinoys with a million dollars to invest and that number is constantly growing.

For another, the prices of property being marketed now are still below the 1997 pre-Asian Crisis levels in dollar terms. And with interest rate at record low, stable inflation and strong investor confidence, there is a market for property developments from reputable institutions with track record.

Valerie Soliven, who had been working with Tong at Rockwell from the start, told Manila Bulletin the market boom and bust cycle of a few years has apparently been broken. This is why there is reason for more optimism than worry.

The senior vice president for sales and marketing of Rockwell explained: “We’ve been watching and watching that cycle, because normally it’s a six­ year run at most, and then it dips already and moves into a six-year down cycle. But this up cycle has been going on for 10 years, since 2002. We thought 2008 would be the start of the down cycle, but so far it’s still going up.”

On the other end of the spectrum is SMDC. The last time I talked to Henry Sy Jr., otherwise known as Big Boy, he promised to build even more of the affordable units the SM group is known for. It is his goal, he said, to give more of our people the opportunity to enjoy the trappings of luxury other developers reserve for the very rich.

Between Rockwell and SMDC are a variety of developers catering to various segments of the market. I suppose the only way buyers can make sure they get quality and on-time delivery of units is for them to check the track record of a developer. The financial muscle of the developer to deliver a project is very important.

One thing Gov. Say guarantees us is that the BSP is always alert and proactive in dealing with any potential bubble. The lessons of what happened in the United States are so stark and so painful for anyone to ignore.

To answer the question again: yes, there is a market for all those condos… yet.

Competitiveness

Being invited to Davos for the World Economic Forum (WEF) is indeed an honor for P-Noy… except that the Davos Forum is no longer what it used to be. It has now become notorious as a talkfest more than anything else.

Anyway, it is still a good venue for P-Noy to highlight progress going on in the country today. However, it is important for P-Noy and his staff not to get things too much into their heads. So much work is yet to be done.

And the key word is competitiveness or why we either still do not have it or investors don’t think we have it even if we want to believe we do. Last month Bill Luz of the National Council on Competitiveness came up with some of the lessons learned on competitiveness.

Here are some of those lessons according to Bill.

Transparency leads to competitiveness. From the beginning, we felt that governance matters so “transparency leads to competitiveness” was the theme of our earliest presentations to different audiences. Though some people doubted it, we pointed out that many competitiveness indices actually measure this. The WEF Global Competitiveness Index, for instance, measures budget and procurement reform and even favoritism and wastefulness in government spending as part of it coverage on governance.

Work-in-progress is not good enough. In the business of measuring competitiveness, “work-in-progress” doesn’t count for anything. Reforms count only when they are passed into law via Congress or executive action, put into effect and used by citizens, and measured in terms of usage. Anything less than  that doesn’t count.

Execution and delivery matter. The corollary to the lesson above is that execution, delivery, or implementation is what really matters in competitiveness scoring. Moreover, reforms or change must be implemented along timelines.

Teamwork is important. Because so many public reform challenges cut across several agencies, teamwork is required. We can no longer afford silos in government. For instance, to develop a system for incorporating a company online, this will involve the cooperation of at least five different agencies (e.g., DTI, SEC, BIR, SSS, Philhealth, and Pag-Ibig). No single agency can accomplish this task.

We need to work on multiple fronts. Competitiveness is measured along a number of parameters, typically 10 to 12 broad categories which can be broken down into over 100 sub-categories. Different categories may carry different weights. Focusing on only a few items will not move the country’s entire score or ranking.

The competition never sleeps. The nature of competition is that it is precisely a contest among many competitors. Even if your own performance improves, that is not a guarantee that your ranking will improve because the other competitors may be improving on their performance at an even better pace. Your relative standing might even drop. That is exactly what happened to us as a country. We must recognize that our competition never rests and is also trying to improve itself. More importantly, countries at the top of the tables are among those who work hardest at staying there. For instance, Singapore has ranked No. 1 in the Ease of Doing Business report for the last seven years.

The bar always rises. Standards change from year to year as countries move in terms of GDP per capita. As one moves up, the importance of the categories change and standards go up.

Speed-to-reform is important. Because “work-in-progress” no longer counts and deliverables are measured against deadlines, we should focus on speed-to-reform. We no longer have the luxury of time to move too slowly on some reforms. The world is moving fast and we need to keep pace.

Maintaining momentum is important. As we gain speed, we should realize that maintaining momentum is important. Holding the same speed is not good enough because the competition is constantly on the move and also trying to gain speed. Momentum also has its own value. It keeps people focused on constant improvement, in sync with each other, and keeps a machinery well-oiled. The worst thing that can happen after we have gained a certain speed is to ease back and get complacent. That’s when costly mistakes occur.

We need to institutionalize change. Now that things are going well for us, the question we hear most often now is one of concern: what happens to all the good things when the administration changes in 2016? Will all the reforms be swept away? If we play our cards right, that may not necessarily happen. In fact, we can (and should) prevent it from happening. Playing our cards right lies in our ability to institutionalize reforms and deeply embed them in systems so it will be difficult (if not impossible) to change. Reforms will need to be seen, felt, and experienced as a positive thing so people will clamor for them to remain and complain if they are lost. That may be our biggest challenge in the next three years ahead.

Got stiffed

Raffy Alunan posted this on Facebook.

An elderly man was having a calm walk when he happens to pass a brothel.

One of the prostitutes calls out: “Hey Grandpa! Why don’t you try ?

The old man replies: “No, my child, I cannot!”

The prostitute: “Cheer up !!! Let us try !!!”

The elderly man enters and performs like a 25-year old

The prostitute says:”Oh Gosh! And you still say you cannot”

The old man replies: - “Aaah, sex I can, what I cannot is pay!”

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco