"Doing Business in the Philippines," hosted by the global business council of the Silicon Valley Association of REALTORS® in November, attracted more than 40 association members and guests. The Philippines is Asia's second fastest growing economy today and the business of real estate there is booming, according to Philippine-based real estate agents.
The program, moderated by National Association of REALTORS® President's Liaison to the Philippines Jennifer Tasto, had as panelists International REALTOR® Members from the Philippines from the Chamber of Real Estate and Builders' Associations Inc. (CREBA). CREBA is the Silicon Valley Association of REALTORS®' cooperating real estate association. It is the largest real estate umbrella organization in that country. The delegation included Bernard Umali, Evangeline Yia, Arlene Posadas and Connie Castellano. Their presentations focused on buying and selling property, estate settlement, project selling, ownership of land and registering property in the Philippines.
The Filipino REALTORS® said Philippine real estate is one of the best businesses today. They said the country has an estimated population of 101 million people. Top buyers of Philippine property are early nesters due to the country's young population, business process outsourcing workers, overseas Filipino workers and investors.
Why buy real estate in the Philippines? They said the Philippine economy rebounded with a growth of 5.6 percent in the second quarter of 2015, defying a regional slowdown which has affected countries like China and Japan.
"Filipinos are among the most globally connected in the world," said Tasto.
Tasto said over 10 percent of Filipinos (an estimated 10 million people) live outside the Philippines and work in over 150 countries. Overseas Filipino worker remittances are at a record high, posting $26.93 billion in 2014. Of this money, 60 percent is devoted to real estate investment.
The cost of real estate in the Philippines is much more affordable than in other Asian countries, along with the rate of return on investments, added Tasto. The panelists also indicated growth in business process outsourcing and tourism has spurred real estate sales.
The Filipino REALTORS® noted bank real estate loans hit $24.47 billion in 2014, fueled by sustained demand for new homes and office space. The migration rate in Manila also has made the country's capital a favored location for residential condominiums.
Renting property has become a thriving business. According to Global Property Guide, a website for residential property investors who want to buy houses or apartments in other countries, the Philippines has the highest rental yield in Asia, with a gross rental yield of 7.53 percent because of the country's housing backlog.
"Close to 5.5 million housing units are needed to serve the Philippines' rapidly growing population, with 80 percent of these needed by the very crucial low to mid-end segment of the market," said Tasto.
Many in attendance were immigrants from the Philippines, former natural born Filipinos interested to learn if they can still purchase property there, as the country has restrictions on foreign ownership. A foreign national and/or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years, and renewable for another 25 years. A foreigner married to a Filipino citizen can hold title in the Filipino spouse's name. The foreign spouse's name cannot be on the title, but can be on the contract to buy the property. Discussion became quite technical when a question on divorce and ownership was raised, as there is no divorce in the Philippines.
"Real estate is a truly global business and especially interesting as each culture is different. In most countries, the practice of real estate is not regulated, so it is very beneficial for REALTORS® to learn about other countries, especially when they have foreign clients not acquainted with rules and practices here, and vice versa," said Mark Wong, chair of SILVAR's global business council.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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