By Inquirer.net
The economy and property market aren’t out of the woods yet. There are many problems right now ravaging the world—global inflation, global hike in interest rates, wars, global constraints in logistics, a global energy crisis, global warming and its impact on food production and food prices.
These are just some of the few big external issues affecting the Philippines, and as a country, we need to make decisions carefully.
Growth drivers
Despite all these, we are optimistic about 2023 and beyond.
Thankfully, we have the business process outsourcing (BPO) industry creating more jobs in the Philippines, as global companies cut costs and improve productivity amid crisis events such as what the world is going through now.
We have the overseas remittances continuously providing funding for the basic needs of majority of the population. This is also a source of significant funding for the housing market.
Infrastructure programs carried over from the previous administration and those about to start during this administration will keep the construction industry busy, and will open new land for development and investment. The tourism industry is also ramping up as borders open, thus helping fuel countryside development.
Sound fiscal policy
Meanwhile, the drastic interest rate hikes are expected to make investors hesitate and may slow down the velocity of the market. Fortunately, the recent news about the slower pace of inflation in the United States will hopefully be sustained. This will slow down the climb of interest rates.
In the Philippines, political stability and sound fiscal policy have protected the country’s investment or credit ratings, slowing interest rate hikes and making us more “investible.” The low debt levels in the private sector and households, plus the high savings rate, have further made the property market resilient.
All these virtuous factors will insulate us from a lot of damage in this upcoming global recession.
Recovery in the offing
Overall, I think the property market will do well—as long as we allow the Philippine offshore gaming operators (Pogos) to continue operating here, we will continue with the path to recovery.
The recovery will happen in the residential and office sector, while tourism will become the largest industry of the Philippines on or before 2032.