One of the main issues that businesses face in the country nowadays is the 60-40 ownership rule, which, according to Century Properties Chairman and Chief Executive Jose EB Antonio, can help the country “afloat” particularly in the real estate sector.
“In real estate, I [think we should]open up. Because even if we do, they [foreign investors]cannot take away the real estate [establishments]in the country. And that made Singapore, London, Paris, Hong Kong and New York as premier cities…They have been kept afloat not by local investors but by foreign investors,” Antonio said.
During the CEO Business Leadership Series held at the University of Santo Tomas Graduate School, Antonio said that the government should consider revisiting the constitution and let foreign investors own more than 40 percent of businesses and even lands in the country than what is indicated in the 60-40 ownership rule.
“[Foreigners are] so persistent in buying [lands and investing in the country]that the only way they go about it if they are marrying a Filipina, or putting up corporations and companies in the country,” Antonio said.
In the 1987 Constitution, the 60-40 rule limits foreign ownership by only 40 percent and requires the other 60 percent of the corporation, business or establishment to be owned by a Filipino. Since the country has been growing fast with demands rising and multiple credit ratings, the 60-40 rule has become a debate and hurdle for the local business landscape.
“We have to revisit our constitution because it was made number of years ago. In real estate, I would definitely open it up [in contrast to the 60-40], but except for certain areas like agriculture because we must protect our farmers. What I encourage for them is corporate farming because it leads to efficiency, ability to secure raw materials for great bigger scale farming,” he added.
As a real estate developer, Antonio said that there is a great demand in terms of homes and luxury units because of the growing middle class population in the country.
“This has propelled a lot of purchase of homes in the country. Demand comes from first own buyers—people who owns houses, and they demand about 350,000 units per year. The supply of all of us developers put together are only 250,000 a year. We have a shortage of 100,000; we are only catching up,” Antonio stated.
In the CEO Series facilitated by UST Graduate Professor Thomas Tiu, Antonio explained that a lot of people now in the country can afford a monthly amortization of P7,000 to P10,000, which drives them to develop more luxury units and homes.
The Century Properties chairman also said that from having a lot of poor people, the middle class is increasing because of the rise of “business processing management and other industries that came along with it” as well as the dollar remittances that our overseas Filipino workers bring in, both of which account to about 40 percent of the country’s economy.
He said that the BPM industry grants about P25,000 for the industry’s minimum wage, “which is double the minimum wage in the country so the graduates now are given a good chance of earning well.” He also cited that there is an increase in the middle class because of remittances accounting to $20,000, which is about 20 percent of the economy.
Antonio emphasized that the administration should push for housing programs for the middle class market.
“Government should be aware that there are growing middle class in the country. They must create an affordable housing program that is worth half a million pesos. With these homes, amortization is P2,000 a month and a lot of people can afford it. They will just o overtime and they can afford it,” he said.
“But who will produce 500k units? Very few [developers]would like to go [invest]there because it is unprofitable. You have the volume, but you don’t have the margin, and as a developer, you wouldn’t want to waste your time there. The government should be the one spearheading the plan,”
Century Properties has been tapping and partnering with worldwide-known brands like the Trump brand, Versache, and architecture expert Philippe Starck among others. KRISTYN NIKA M. LAZO