Vista Land unfazed by looming increase in loan rates

MANILA, Philippines - Vista Land & Lifescapes Inc., the country’s largest homebuilder, said it has positioned itself to take a negligible impact from the impending increase in borrowing rates.

The real estate holding unit of the Villar family is poised to continue enjoying robust takeup while maintaining its aggressive expansion program this year, company executives said yesterday.

“In general, a minimal increase in interest rates in response to the higher inflation will not affect the private sector,” said Vista Land chairman Manny B. Villar.

“(Vista Land) will not be affected by an increase in interest rates because we cater to the end-user market. It is the speculative market that is sensitive to interest rates,” he added.

The Monetary Board of the Bangko Sental ng Pilipinas has maintained rates steady since the start of the year but reserve requirement ratios of banks have been hiked by a total of two percentage points to mop up excess liquidity growth. Investors expect monetary authorities to increase lending and borrowing rates late this year to counter increasing inflation.

Villar said most of Vista Land’s buyers are people who want their own homes, not those buying real estate for lease or re-sale. Around 60 percent of Vista Land”s buyers are overseas Filipinos for whom buying a house is among their top priorities.

An increase in interest rates will reduce the yields on speculative investments, especially when demand for leased units slackens, Villar said.

Villar said the company’s first quarter reservation sales that grew 10 percent to P13 billion “confirms our reading that demand for housing all around the country continues to be very strong.”

Vista Land remains one of the most profitable real estate companies in the Philippines. In the first quarter, its net income rose 11 percent to P1.5 billion while consolidated revenues jumped 12 percent to P5.4 billion.

For his part, Vista Land president and CEO Manuel Paolo A. Villar said the company launched 13 subdivision developments with a total value of P8 billion during the first quarter, of which 12 were low-cost housing projects.

These subdivisions will rise in Agusan del Norte, Bacolod City, Bataan, Batangas, Bulacan, Cebu, Gen. Santos City, Palawan and Tarlac.

Vista Land is also exploring opportunities in developing new income streams from recurring sources such as commercial centers being built in selected Vista Land communities.

“We are pleased to have been able to sustain the double-digit growth achieved over the past years and should have no problem achieving our full-year targets,” the elder Villar said.