This year may not be as good as last year for the property sector.
According to the latest report from real estate services firm Colliers International, while sustained economic growth will probably continue to spill over to the real estate sector, outpacing the record-high supply and absorption posted by the office and residential sectors in 2018 appears daunting.
Several factors could constrain the growth of the property sector moving forward, the report said. These include lack of skilled construction workers which may compromise the implementation of government infrastructure projects nationwide as well as potential delays in the implementation of public projects.
Colliers said developers should capitalize on the country’s stable macroeconomic environment, especially with multinational banks, aid agencies, and credit rating firms forecasting real GDP growth of between six and 6.5 percent this year. It recommended that developers align their projects with government’s infrastructure push which will be driving economic growth in the country over the next two to three years and that they strategically acquire lands in key areas outside of Manila where economic activities are likely to be fueled by major infrastructure projects.
Meanwhile, for the office sector, the report noted that the outsourcing sector as well as offshore gaming will be able to sustain demand for office space this year.
In 2018, the Manila office sector posted record-high supply and demand numbers, with outsourcing firms driving overall office space absorption last year, dominating other sectors like offshore gaming and traditional/non-BPO occupants.
Over the next 12 months, Colliers said it projects new supply to reach 1.10 million sqm. with net takeup of about one million. In 2018, net take up was 1.18 million. It explained that the demand from the outsourcing sector is likely to be sustained while office space take-up from offshore gaming firms should re-emerge as they occupy new buildings in the Bay Area.
In its report, Colliers added that it expects greater expansion outside Metro Manila as outsourcing companies look for Philippine Economic Zone Authority (PEZA) proclaimed office space, and a number of local governments taking a more concrete stance on offshore gaming operations, which should offer some clarification as to the expansion plans of these firms moving forward.
For the residential sector meanwhile, Colliers forecasts more difficult times for the residential sector which it said would find outpacing 2018 sales a challenge.
In 2018, around 54,000 residential condominium units were sold in the Metro Manila pre-sales market, compared to the 53,000 sold in 2017.
Colliers said that for 2019, take-up in the pre-selling market will moderate due to a projected drop in condominium launches, which is attributed to the lack of developable land in Metro Manila’s major business hubs and rapidly rising land prices. Given this trend, the report revealed that it expects developers to be more aggressive in launching new projects in the fringes of central business districts where land is cheaper and sustained end-user demand for horizontal house and lot projects especially in key areas outside Metro Manila.
Senior citizen fights back
Early last year, a resolution was filed in Congress calling for an investigation into Mercury Drug Corp.’s alleged “open and wanton” defiance of the benefits provided to senior citizens under Republic Act 9994 or the Expanded Senior Citizens Act.
RA 9994 gives senior citizens a 20 percent discount and exemption from the value-added tax on the sale of certain goods and services from all establishments, for the exclusive use and enjoyment or availment of the senior citizen.
According to the resolution filed by Rep. Francisco Datol Jr., Mercury Drug branches have been making it difficult for senior citizens to avail of their discount and VAT exemption, making it a store policy to ask senior citizen clients several documents before they can avail of their privilege.
Retired judge Philbert Iturralde’s woes against Mercury Drug are even far worse, since the company has chosen to sue Iturralde for estafa and violation of RA 9994 when he complained against the company’s non-compliance of the same laws which he is now being accused of having violated.
A criminal case has been filed against MDC president Vivian Que and other MDC personnel for violation of RA 9994 with the Metropolitan Trial Court in Quezon City following a complaint filed by Iturralde that MDC failed and refused to honor his senior citizen card and refused to give him a 20 percent discount and exemption from VAT on the ground that he has used and availed of his Mercury Suki card which is a loyalty card that grants MDC customers points every time they purchase items.
Apparently irked by Iturralde’s action, MDC fought back and sued him for estafa and violation of RA 9994 last November in separate complaints filed in Quezon City and Manila. According to the complaints, Iturralde’s purchases of hypertension medicine Micardis exceeded the maximum allowed by law. It was also claimed that respondent used different senior citizen IDs, purchased from different MDC branches, and made his purchases on subsequent dates to deceive MDC and to fraudulently avoid the limit imposed by law.
Iturralde, in his counter-affidavit, pointed out that the limitation as to volume merely covers the DOH, its agencies, LGUs, and health care providers, and that even if the transactions were indeed true, it is Mercury Drug which is at fault for dispensing medicine in excess of the limits.
The Office of the City Prosecutor of Manila, in a resolution released January 2019, recommended that the complaint be dismissed. It said there was no deceit (an element of estafa) since respondent did not use a fictitious name or falsely represent himself as a senior citizen. Another element of estafa, which is damage, is also absent since it is improper to consider the 20 percent discount as a loss or damage sustained by MDC.
In dismissing the complaint, it also noted that as the transactions were made with the participation of MDC personnel who sold the tablets to Iturralde, MDC cannot feign ignorance of the commission of the alleged violation. And since the purchases were made in 2014, it said that the penal provisions of RA 9994 alleged to have been violated has already prescribed and the four-year prescription period has already lapsed.
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