The Duterte Administration’s focus on infrastructure development, which contributed to economic growth in 2016, will boost township development in underutilized areas due to improved connectivity, property consultancy firm Colliers International said.
In a statement on Monday, Colliers said the Philippine economy’s growth last year was “well within the 6.5 to 7 percent growth it earlier projected last November.”
Data from the Philippine Statistics Authority (PSA) released last week showed that the Philippine economy grew by 6.8 percent last year, the fastest rate since 2013.
“The country’s stellar economic growth reflects the continued dynamism of key economic sectors such as outsourcing, construction, and manufacturing,” Colliers said.
The property services firm cited data from the PSA showing the government’s robust spending, mainly driven by infrastructure spending, was a main driver of the economy’s growth. Government spending grew by 8.3 percent in 2016, an acceleration from the 7.8 percent growth rate in the previous year.
“The increase was partly due to increased spending on public infrastructure projects such as highways, farm-to-market roads, bridges, and access roads to tourist destination,” the property services firm said.
Colliers said it expects the growth of the country’s economy to remain robust this year.
“For 2017, Colliers retains its earlier GDP growth projection of 6 percent to 6.5 percent,” Colliers said.
“The country’s macroeconomic fundamentals remain strong but a slight slowdown is expected due to the absence of the multiplier effects of election-induced spending,” Colliers added.
Colliers said that the government’s focus on infrastructure development would positively impact the country’s property market, particularly in the creation of townships.
“The government’s thrust to intensify infrastructure development bodes well for the long-term growth of the economy and this should trickle down to various sectors including real estate,” Colliers said.
“The expansion of Metro Manila’s railway system should unlock underutilized areas for township developments while the construction and expansion of roads within Metro Manila will help connect the business centers of Makati, Pasay, Ortigas, and Taguig,” it added.
Also, the development of rail projects in Northern, Central, and Southern Luzon should support the expansion of manufacturing activities in these regions, Colliers said.
In addition to infrastructure development, Colliers noted that investments from countries such as China, Japan and Taiwan are also creating optimism for the Philippine economy’s continued growth.
“The Philippines will also benefit from the construction of infrastructure projects under the public-private partnership (PPP) scheme and the sustained surge in manufacturing investments from Japan, China, and Taiwan as foreign manufacturers take advantage of the country’s trade deals with ASEAN and the European Union (EU) and improving viability as an investment hub in the region,” Colliers said.
Furthermore, apart from infrastructure development, the growth of the Philippine economy this year will continue to be driven by OFW remittances and BPO revenues, Colliers added.