GLOBAL property advisor Cushman and Wakefield has described Manila as “still in the fast lane,” on the back of low inflation and what it calls sustained policy accommodation.
“The Philippines is on track to record another year of enviable growth,” the property consultancy firm said in its Asia Pacific Outlook Report for 2016. “The government continues to make strides in improving business conditions and addressing corruption,”
Cushman and Wakefield expects the business process outsourcing (BPO) sector to continue propelling the Philippine economy to stay as one of Asia’s strongest performers.
The property advisor cited estimates by the IT and Business Process Association of the Philippines (IBPAP) that the BPO industry would have 1.3 million full-time employees in 2016.
At the same time, it said accelerated implementation of public-private partnership projects and spending related to the May 2016 presidential election would induce growth in the country’s economy.
As for the country’s property market, Cushman and Wakefield noted record low levels of office space vacancies, which remained at 3.4 percent as of yearend 2015.
But the company foresees a slower rental growth this year due to upcoming supply of new developments, especially in the emerging Bonifacio Global City, where the bulk of the new office space supply will be placed.
“We may see slower rental growth this year given the massive upcoming supply totaling 10.2 million square feet that is concentrated in Manila’s new prime district, Bonifacio Global City,” it said. “Nonetheless, we expect strong take-up levels to sustain high office occupancies and record rents, and continued increases in capital values this year.”
Cushman and Wakefield also noted that the Philippines, along with Vietnam, would likely have solid economic growth among emerging countries in Southeast Asia.
The firm likewise reported that growth in entire Asia would pick up this year, driven by the firmer growth of Japan, to be reinvigorated by policy developments.
The Cushman and Wakefield report said India’s domestic demand-driven economy is expected to outpace China’s Gross Domestic Product growth.
Meanwhile, Sigrid Zialcita, Cushman and Wakefield managing director for research in Asia Pacific, said prospects in the region remain the brightest globally in 2016, as several economic drivers will help it cope with China’s slowing growth.
“Low inflation as well as sustained policy accommodation will help support expansion,” Zialcita said. “In Japan, policy developments should help reinvigorate the economy, while emerging Southeast Asian growth will benefit from the several strategic trade initiatives undertaken over the last year.”
Cushman and Wakefield said the main issues to watch out for in the region this year are China’s continuing economic transition, Japan’s fragile domestic market conditions, and the efforts of emerging markets to reform their economies.
“As the region is a net oil importer, we expect continued low oil prices to significantly aid recovering growth in most countries across the region,” the firm said.