Interview: Jose E B Antonio
What segments offer the best value proposition for real estate developers wishing to diversify their portfolios both at home and abroad?
JOSE E B ANTONIO: Looking at demand drivers, the opportunities not just for real estate, but for the whole country revolve around the expanding middle class. When you look at the economic history of developed countries, the reason for their continuous prosperity has been a large middle class, which is able to curb the volatility of economic activity through its basic consumption needs. Real estate developers in the Philippines are therefore looking to meet the needs of the middle class in terms of housing and retail, as well as diversify offerings in various areas of key cities to help decentralise growth. For instance, we have expanded a project in Pampanga because the central Luzon area has the third-largest concentration of overseas foreign workers. Affordable housing also holds exponential growth potential given that home ownership penetration in the Philippines is barely 60%, compared with more advanced countries like Singapore, where it is 96%.
Regionally, the market in South-east Asia alone is 600m strong. As part of ASEAN integration, developers in neighbouring countries are exploring options to cooperate as integration broadens the market and investment possibilities. Many developers are already positioned to expand their brands in the region through partnerships with their counterparts, capitalising on the strengths they can export and share. In this context, our main contribution as a developer would be to elevate real estate practice to international standards and launch competitive projects. High-net-worth clients in the region already make up a significant portion of sales, particularly in the luxury market.
How can developers capitalise on the growth in tourism, and what role can the government play to complement these opportunities?
ANTONIO: Tourism is an area the entire country should actively work to develop. On this front, the Philippines lags its neighbours, receiving only 4.3m foreign tourists a year, while Vietnam, with a population of 60m, receives just as many and Thailand, with a 62m population, receives 25m (its Phuket province alone receives 15m).
Low tourist arrivals are attributed to lack of transport access points. However, this is being addressed as various airports are being upgraded. Palawan, for instance – which is not typhoon-prone and has world-renowned beaches and attractions – is converting its Puerto Princesa airport into an international gateway to raise the number of flights per day from 25 to 40. This will attract foreign tourists willing to bypass Manila and travel directly there from anywhere in Asia. The Philippines also enjoys 44m domestic tourists, which added to foreign ones create a large market that developers can tap into by positioning their projects in out-of-town destinations and luxury developments.
Most importantly, tourism is an industry that touches the lowest levels of society, given how its multiplier effects cascade into local employment generation and revenues for related industries. Tourist interest in the Philippines already exists within Asia, and the country has the destinations and people to serve them. The key issue is access: this is an area where government can contribute as an enabler of business by building the infrastructure necessary to allow the private sector to be effective in accelerating the industry’s growth.
In what ways can developer participation in building health care centres catalyse medical tourism?
ANTONIO: Research shows that 70% of ailments can be treated in an outpatient setting, and not exclusively in hospitals. However, two issues need addressing for outpatient medical centres to serve the numbers received by Thai hospitals – namely, 1m patients a year, of which half are foreigners. The first is connectivity to source markets to attract more patients. The second is to create a new culture of protocol. Our medical practices have been largely dictated by the domestic market, which is less demanding when it comes to service.
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