Manila Market Intelligence July 27, 2020

july-27-2020-hero-image

Foreign direct investments plunge in April 

NEWS

Data from the Bangko Sentral ng Pilipinas (BSP) or the central bank show that Foreign Direct Investments (FDI) to the Philippines dropped by 68% in April, an 11-month low. FDIs dropped to USD311 million (PHP15.3 billion) in April 2020 compared to the USD971 million (PHP47.9 billion) in the same period of last year. BSP said that the decline was due to investors stalling their investment plans due to the COVID-19 pandemic. As of 4M 2020, FDIs dropped by 32.1% to USD1.98 billion (PHP97.7 billion) from USD2.91 billion (PHP143.7 billion) in 4M 2019. Meanwhile, the central bank expects FDI for 2020 to reach USD4.1 billion (PHP202.5 billion) from its initial projection of USD8.8 billion (PHP434.5 billion).

CLICK HERE TO VIEW ARTICLE

RESEARCH VIEW

Latest figures from the central bank show that the manufacturing sector accounted for bulk of FDIs at USD431 million (PHP21.3 billion) or 22% of total investments for the first four months of 2020. Colliers believes that this will likely drive the demand for more industrial space and warehouses in the country’s key industrial hubs north and south of Metro Manila. In our opinion, the passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) that will likely reduce the Corporate Income Tax (CIT) to 25% from the current 30% in the first year of implementation should entice global manufacturers to consider the Philippines for their operations. This should also be complemented by the improving infrastructure network from the government’s ‘Build, Build, Build’ program. Among the projects lined up for completion are NLEX-SLEX Connector road and CALAX. 

E-commerce growth in PH accelerates

NEWS

During a recent webinar, Co-founder and Chief Executive Officer of Zalora Philippines Paolo Campos mentioned that e-commerce in the country will likely grow much faster than earlier projections. In 2019, the industry was projected to reach USD12 billion (PHP588 billion) by 2025. Given the shift in consumer behavior, this will likely be accelerated. Data from a Global Web Index survey showed that 48% of Filipinos plan on increasing their online shopping after the outbreak, higher than the 46% global average. Campos noted that retail and recreation mobility in the country as of July 5, 2020, was still down by 57%. He also added that the shift in consumer preference was already seen as buyers prioritized health and personal care. Because of this, Zalora expanded its offerings by launching an essential goods segment. Products under the category include food, beverage, personal care, and health supplements.

CLICK HERE TO VIEW ARTICLE

RESEARCH VIEW

Data from Philippine Payments Management Inc. (PPMI) showed that around 8.9 million InstaPay transfers were recorded in April 2020, up by 32.2% from 6.7 million in March. The growth in e-payment indicates the rising popularity of online shopping. Post-lockdown social distancing protocols should further increase the demand for e-commerce as consumers look for safer ways to purchase goods. We recommend that retailers tap the demand by exploring omnichannel distribution. Offering their goods on e-commerce platforms along with regular brick-and-mortar stores should help boost sales. Retailers should also strengthen their online presence through social media sites. This may help them get in touch with existing clients and expand their consumer base.

Megaworld to launch residential condo tower in Bacolod township 

NEWS

Megaworld is expecting to raise PHP1.6 billion (USD32 million) in sales from its new condominium tower in Bacolod City. The project, One Manhattan, is a 14-storey residential building composed of 260 studio to two bedroom units with sizes ranging from 33 sq metres (355 sq feet) up to 112 sq metres (1,200 sq feet) in its Upper East township. Amenities of the project include a wall climbing facility, mini track oval and a gym with outdoor jacuzzi. Once completed, the project is set to be the third residential property in the township by 2025. 

CLICK HERE TO VIEW ARTICLE

RESEARCH VIEW

As of the end of 2019, Colliers recorded a total of 1,194 condominium units in Bacolod. From 2020-2023, Colliers sees the completion of 1,864 units. Despite the latest residential development of Megaworld, we still see muted condominium development in the province. To attract end-users and investors, Colliers believes that developers continue to offer economic (PHP450,000 to PHP1.7 million) and affordable units (PHP1.7 to PHP3.2 million) projects as these are likely to attract Overseas Filipino Workers (OFWs) and local investors. In our opinion, the inclusion of upscale amenities and other recreational facilities will likely provide opportunities for developers to capture the growing demand from end-users and investors. Developers should also continue providing flexible payment terms to maximize low mortgage rates.

CLICK HERE TO VIEW PREVIOUS MARKET INTELLIGENCE REPORTS


Related Experts

Joey Bondoc

Senior Manager

Manila

Prior to joining Colliers in March 2016, Joey worked as a Research Manager for a research and consutancy firm where he handled business, political, and macroeconomic analysis. He took part in a number of consultancy projects with multilateral agencies and provided research support and policy recommendations to key government officials and top executives of MNCs in the Philippines.

View expert