THE Philippine property market continues to be a bright spot amidst weakening global growth, according to local real estate consultancy KMC Mag Group.
In a media briefing on Wednesday, KMC Mag Group head of research Antton Nordberg said the Philippines is going strong in terms of GDP growth.
“The Philippines is still strong performing in terms of GDP growth. The third-quarter growth was at 6 percent and the projections are high for next year, at around 6 percent to 7 percent. The government is more bullish so they’re saying 7 percent to 8 percent,” said Nordberg.
Remittances from overseas Filipino workers (OFWs) and a thriving business process outsourcing (BPO) sector continue to drive this growth, he notes.
“The main drivers remain to be OFW remittances, which is fuelling private consumption, and the BPO industry which is the fastest growing private sector job provider,” Nordberg said.
According to Nordberg, external factors such as the US Federal Reserve interest rate hike may not have a significant impact on the country’s property sector because of its minimal exposure to debt.
“It [US rate hike] might have some impact, but given the clean state of Philippine property finance, no balance sheet, minimal exposure to debts, I expect that this impact will not be that significant,” said Nordberg.
He also emphasized that China’s decelerating growth is the key risk that may affect the country.
“China is really the key risk right now. It remains to be the question mark and it’s a risk to the Philippines because it’s one of the largest trade partners. It can potentially swing the trade balance back to decreasing,” said Nordberg.
He added, “But as long as the economy is driven by strong domestic demand, it makes the economy less vulnerable to these types of outside shocks.”
Furthermore, Nordberg sees a positive outlook for the country’s property sector if the economic growth is sustained.
“So as long as the macroeconomic picture continues to look good, I expect another strong year in 2016 and the property market will continue to be one of the top beneficiaries of this growth,” said Nordberg.