More ultra-rich people in Phl

Is this the case of more Filipinos becoming richer, or the rich becoming richer and the poor becoming poorer? Or is it because more wealthy foreigners have chosen to make the Philippines their first or second home?

According to a recent report from Dot Property which quoted information from real estate consultancy firm Santos Knight Frank, Metro Manila now ranks first in Asia Pacific for the luxury residential market, and fourth globally.

The sector grew by 6.2 percent during between the second quarter of 2018 and 2019, according to the Knight Frank Prime Global Cities Index for the second quarter of this year.

Santos Knight Frank noted that developers’ confidence in the prime condominium market could be seen in their willingness to launch more high-end projects.

Two of the most recent luxury condominium launches are being developed jointly by major developers. Aurelia Residences is a joint venture between Shang Properties and Robinsons Land being built in Bonifacio Global City, while The Estate Makati is being developed by both SMDC and Federal Land and recorded pre-sales of 40 percent before its launch.

The report noted that demand for luxury residential property in Metro Manila is being driven by two groups. First are overseas buyers who continue to eye the Philippines for investment opportunities as the weakening of the Philippine peso has provided them with a boost in spending power. Second is the increasing number of ultra-high net worth individuals (UHNWIs) in the country with a strong demand for property.

According to Knight Frank’s The Wealth Report 2019, the number of UHNWIs in the Philippines will increase by 38 percent between 2018 and 2023, the world’s second largest growth behind only India.

A search on the internet shows that UHNWIs are people with investable assets of at least $30 million. Knight Frank, meanwhile, defines UHNWIs as those with net worth of over $30 million excluding their primary residence.

These increasing number of UHNWIs investing big time in the Philippine luxury residential property market may be foreigners. After all, the Philippine Condominium Act allows foreigners to own condo units provided that the 60 percent of the building is owned by Filipinos. But foreigners still cannot own land directly in the country. They may purchase property through a corporation though, provided that the corporation is at least 60 percent Filipino owned. Foreigners can also own buildings and houses in the Philippines, provided they do not own the land on which these are built.

Meanwhile, it was also pointed out by Santos Knight Frank that prices for luxury condominiums across Metro Manila has been skyrocketing as demand continues to outstrip supply.  In the last two years, selling price for prime residential condominiums in Makati has increased by almost 25 percent, while prices in Bonifacio Global City rose by 12 percent, the same report said.

This price growth, Dot Property said, easily surpasses other sectors of the property market in Metro Manila. Data from the Bangko Sentral ng Pilipinas (BSP) found residential property prices in the National Capital Region increased by 5.2 percent between the second quarter of 2018 and 2019.

Doing a good job so far

The current leadership in the House of Representatives must be doing a really good job. From what we are seeing so far, government, especially the finance people, are happy that its economic and business proposals have been getting the much-needed push in the Lower House.

After only two months since he assumed office, House Speaker Allan Peter Cayetano already garnered a 62 percent trust rating and a 64 percent approval rating based on the latest Pulse Asia Ulat sa Bayan survey. His performance is even better than what Vice President Leni Robredo received. It is also higher than that of his predecessors, including former president Gloria Macapagal Arroyo and Davao del Norte Rep. Pantaleon Alvarez.  

Cayetano has proven to be a worthy and hard-working ally of the President. The 2020 General Appropriations Bill containing the government’s national budget program was approved by the House on third and final reading in record time. According to the Speaker, he made sure that it had  no pork, illegal insertions, nor parked funds. 

 The President’s priority reform measures mentioned in his recent state of the nation address had also progressed rapidly in the House under Cayetano’s leadership. The Corporate Income Tax and Incentive Rationalization Act (CITIRA), the Passive Income and Financial Intermediary Taxation Act (PIFITA),  the bill further increasing the excise taxes on alcohol products and e-cigarettes, and the amendments to the Foreign Investments Act, were also approved on third and final reading.

Earlier, Cayetano committed to transform the House into a relevant, responsible and reliable legislature. Majority Leader Martin Romualdez, and Deputy Speakers Michael Romero and LRay Villafuerte are unanimous in praising Cayetano for his achievements.

Unfortunately, he has to turn over his seat to Marinduque Rep. Lord Allan Velasco in accordance with an earlier agreed term sharing. A little over a year is too short a term for a good House Speaker, but definitely long for a bad one. 

There are those who are saying that the achievements of the House, so far, might be derailed if Cayetano is replaced in 15 months’ time.

This early, there are rumors that Malacañang now wants nothing to do with the term-sharing agreement. In fact, Presidential spokesperson and chief presidential legal counsel Salvador Panelo has said that the President merely suggested the term-sharing deal, and it is now up to the members of the House of Representatives to decide for themselves whether this agreement should still stand.  

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