The Philippines, dubbed as "Pearl of The Orient" is now on the forefront of growth as the newest Tiger economy of Asia, with the country's relatively strong macroeconomy, the nations credit rating has improved and garnered invest grade rating from well renowned financial institutions such as Moody's, Fitch and Standard and Poor's.
The nation's robust economy has fueled by sustained remittances from the country's modern day heroes, the OFW's. Billion dollar industry of the Business Process Outsourcing and the increasing growth in the tourism sector.
With the country's favorable demographics of over 108M Filipinos with a median age of 23, the young, educated and English speaking population has made the Philippines a global leader. Increasing the country's GDP through its positive consumption.
So, what would be the socio-economic indicators that would attract foreign investors to the Philippines real estate aside from the friendly faces and fun outlook of the Filipinos? Here are five items that can be considered.
Economy grows 6.2% in Q3 for 2019 which was faster than the 6 % expansion in the third quarter of 2018. This was reported as the strongest growth rate since the fourth quarter of last year by the Philippine Statistics Authority. Private consumption strengthened amid decelerating inflation and lower borrowing costs, while the government fired up public spending on infrastructure projects in relation to the build-build-build program of the government.
Philippines is located at the center of the 10 ASEAN and is also strategically closer to world’s advance economies like China, South Korea, Australia, New Zealand, India and Japan.
Because of its strategic position in the region, it has become an important part of trade and travel in Asia. Culturally, the Philippines is the center of the East and West which many of our customs, industries, writings and words in the Philippine languages came from.
Thus, due to proximity with nearby countries, it makes the Philippines as their half way home specially during winter season in their own country.
ECONOMICAL RENTAL RATE
For a property investor to assess whether it would be a good investment or not, “rental yield” has to be taken into consideration.
To calculate, rental rate x 12 months and divided by the purchased price. Anything over 7% would generally be considered a reasonable investment. Within the three CBD areas in the Philippines- Makati, Ortigas and BGC, an average rental yield from 6-8% is normally seen. Of course long term rentals definitely can give an impact in the investment.
Retiring and retired nationals of foreign countries are seeking alternative retirement places and Philippines is one of the destinations since there are certain benefits for Special Resident Retiree’s VISA (SRRV). As per Philippine Retirement Authority, one of the options is a visa deposit which may be converted to active investment such as purchase of a ready for occupancy condominium unit or long term lease of house or house & lot with a fee. At the same time another is to invest and put up their own business.
Philippines attracts over 5,000 international students a year, with most coming from other countries in East Asia. Just for 2017 year alone as per Bureau of Immigrations, for special study permit there were 18,713 while for 9 (f) conversion and extension there were 14,848.
Top five for special study permit (2017)
- Korean 11,909
- Japanese 3,548
- Indian 1,449
- Indonesian 877
- Chinese 818
An ideal combination of affordable tuition fees and cost of living makes Philippines as a destination for learning. With 2,300 listed colleges and universities - most which are privately funded. At the same time, primary medium of instruction and official language of business is in English.
With the above socio-economic indicators, Philippines is a promising place to consider living in.