Pushcart classes help break gang chain, cnn.com
Story Highlights
- Efren Peñaflorida was bullied by gangs in high school in the Philippines
- Now his Dynamic Teen Company offers an alternative to gangs through education
- Since 1997, some 10,000 members have taught more than 1,500 children in slums
Vote now for the CNN Hero of the Year
CAVITE CITY, Philippines (CNN) -- At 16, Rhandolf Fajardo reflects on his former life as a gang member.
"My gang mates were the most influential thing in my life," says Fajardo, who joined a gang when he was in sixth grade. "We were pressured to join."
He's not alone. In the Philippines, teenage membership in urban gangs has surged to an estimated 130,000 in the past 10 years, according to the Preda Foundation, a local human rights charity.
"I thought I'd get stuck in that situation and that my life would never improve," recalls Fajardo. "I would probably be in jail right now, most likely a drug addict -- if I hadn't met Efren."
Efren Peñaflorida, 28, also was bullied by gangs in high school. Today, he offers Filipino youth an alternative to gang membership through education. Vote now for the CNN Hero of the Year
"Gang members are groomed in the slums as early as 9 years old," says Peñaflorida. "They are all victims of poverty."
For the past 12 years, Peñaflorida and his team of teen volunteers have taught basic reading and writing to children living on the streets. Their main tool: A pushcart classroom.
Stocked with books, pens, tables and chairs, his Dynamic Teen Company recreates a school setting in unconventional locations such as the cemetery and municipal trash dump.
Peñaflorida knows firsthand the adversity faced by these children. Born into a poor family, he lived in a shanty near the city dump site. But he says he refused to allow his circumstances to define his future.
"Instead of being discouraged, I promised myself that I would pursue education," he recalls. "I will strive hard; I will do my best."
In high school, Peñaflorida faced a new set of challenges. Gang activity was rampant; they terrorized the student body, vandalized the school and inducted members by forcing them to rape young girls, he says.
"I felt the social discrimination. I was afraid to walk down the street."
Peñaflorida remembers standing up to a gang leader, refusing to join his gang. That confrontation proved fateful. At 16, he and his friends "got the idea to divert teenagers like us to be productive," he says.
He created the Dynamic Teen Company to offer his classmates an outlet to lift up themselves and their community. For Peñaflorida, that meant returning to the slums of his childhood to give kids the education he felt they deserved.
"They need education to be successful in life. It's just giving them what others gave to me," he says.
Today, children ranging from ages 2 to 14 flock to the pushcart every Saturday to learn reading, writing, arithmetic and English from Peñaflorida and his trained teen volunteers. Watch Peñaflorida and his group in action with their push cart classroom »
"Our volunteers serve as an inspiration to other children," he says.
The group also runs a hygiene clinic, where children can get a bath and learn how to brush their teeth.
Since 1997, an estimated 10,000 members have helped teach more than 1,500 children living in the slums. The organization supports its efforts by making and selling crafts and collecting items to recycle. Take a look at the slums where Peñaflorida and his group spend their Saturdays »
Through his group, Peñaflorida has successfully mentored former gang members, addicts and dropouts, seeing potential where others see problems.
"Before, I really didn't care for my life," says Michael Advincula, who started doing drugs when he was 7. "But then Efren patiently dug me from where I was buried. It was Efren who pushed me to get my life together." Watch Advincula describe how he met Peñaflorida in the slums »
Today, Advincula is a senior in high school and one of the group's volunteers.
Peñaflorida hopes to expand the pushcart to other areas, giving more children the chance to learn and stay out of gangs.
"I always tell my volunteers that you are the change that you dream and I am the change that I dream. And collectively we are the change that this world needs to be."
Want to get involved? Check out the Dynamic Teen Companyand see how to help.
Sunday, October 25, 2009
EU-RP partnership deal will take 2 years - MacDonald
The Partnership and Cooperation Agreement between the Philippines and the European Union might take two years before being realized, an official said Wednesday.
Ambassador Alistair MacDonald, head of delegation of the European Commission (EC) to the Philippines, said the bilateral deal will need more time before it could be ratified by the EU’s 27-member states.
“Agreements like this usually take time," MacDonald said in a forum in Makati. “But we’ve made significant moves last week."
The PCA will build on and update the existing 1980 EC-Association of Southeast Asian Nations (ASEAN) Cooperation Agreement.
It is aimed at establishing a relationship based upon a modern policy agenda with an appropriate institutional framework, and enabling a policy dialogue on a wider range of issues, ranging from economic, scientific and cultural issues to political and social issues such as human rights, counter-terrorism and migration.
Some industry insiders likened the pact to the Japan-Philippines Economic Partnership Agreement (JPEPA) except that the PCA does not include trade agreements.
Last week, the second round of talks between the RP and EU started and both parties agreed for a need to boost protection of legal migrants and counter undocumented migration. The first meeting was made last February 2009.
Another round of negotiations was set for December in Brussels, Belgium.
So far, the Philippines and the EU have only agreed on eight of the 40 articles included in the PCA.
“It’s a long way to go, but I don’t want to rush it," said MacDonald.
He added that both parties have yet to agree on the migration aspect of the deal. He refused to comment further on the issue.
According to an estimate of the Commission on Filipinos Overseas (CFO), there were more than 953,000 Filipinos are scattered all over Europe as of December 2007. Of the total, 284,987 are permanent residents or immigrants, 555,542 are temporary residents (contract workers), and more than 112,000 are undocumented or overstayers.
Last week, Philippine Ambassador to Brussels Cristina Ortega said the European Committee seems to be opening up their policies for more immigrants since some of the member states are already aging.
Ortega, who attended the press conference at the end of the PCA second round of talks, said Filipinos remain unrivaled in the quality of their service, particularly in the hospitality and health care industries.
“They will be needing the Filipino service very badly in the future," Ortega told GMANews.TV. - JOSEPH HOLANDES UBALDE, GMANews.TV, 10/14/2009 | 04:29 PM
Monday, October 19, 2009
Still looking up on real estate
By Cielito Habito
Philippine Daily Inquirer
Posted date: October 18, 2009
IF OUR ECONOMY AS A WHOLE has been spared from recession even as our erstwhile more dynamic neighbors have been badly hit, surely part of the reason is the resilience of the real property sector. The industry has managed to defy overall economic trends, particularly in the past year’s global economic downturn. Even as of the second quarter this year, real estate grew three times faster than the overall economy did. In contrast, it is this very same industry that had triggered the downfall of Thailand in 1997-1998, and of the United States in 2007-2008. It is therefore no small irony—and yet another manifestation of how different the Philippine economy can be from the usual mold—that real estate can contribute to the salvation of our economy when it has been the Achilles’ heel elsewhere. I’ve written twice in the last two years on why (NFL 5-7-07, 10-27-08).
Then and now
It turns out there’s more to it than what I’ve explained so far. I learned a thing or two last week from Vic Asuncion of CB Richard Ellis, a research and consultancy firm focused on real estate, when we both spoke before executives of a prominent player in property development. Underpinning his discussion was the dramatic contrast he portrayed between the overall Philippine economic landscape surrounding the 1997-98 Asian financial crisis and the current global one. He highlights five factors in this interesting contrast: lending activity, market demand, OFW remittances, personal consumption spending, and office space market supply.
On lending activity, financing was tight during the Asian crisis episode, as there was a general lack of liquidity in the system (translation: money was harder to come by, with less money in circulation and very little loan funds forthcoming from the banks). Interest rates were sky high, as the Bangko Sentral sent interest rates into the upper twenties in a vain attempt to forestall dramatic depreciation of the peso then. But today we see interest rates plumbing historical lows and the system awash with loanable funds, in the concern to stimulate economic activity within the global recessionary environment.
Broader, deeper
Another key difference between the two financial crises is the nature of the market demand then and now, with the current market being both broader and deeper. Foreign investors looking for office and commercial space dominated demand in the 1990s. Now it is a wider mix of foreign investors and local and foreign end-users looking for both residential and commercial space for various purposes. The current market spans the range of needs for office space for business process outsourcing (BPO) firms, commercial space in shopping malls, hotel and other tourism establishments, and residential housing units across various income categories.
Overseas Filipinos have also come to occupy a prominent if not dominant presence in the domestic property market, especially for residential condos, whereas demand from that source was negligible in the 1990s. Middle to upper range condo units continue to be snapped up by expatriate Filipinos who had wisely turned to real property investments here at home, rather than financial investment products whose values evaporated with the subprime collapse. I was amused to hear about complaints from residents in certain high-crust Makati condos on the invasion of their swimming pools by jeepney-loads of provinciano relatives of absentee OFW unit-owners during weekends. And an important factor here has been the way annual OFW remittances have shot up to $17 billion, whereas they amounted to less than one-third of that in 1997.
More dispersion
Asuncion also drew a contrast between personal consumption expenditures (PCE) in 1997-98, when GDP had slightly contracted and PCE grew at a “low 3.5 percent,” and the period just preceding the current global crisis. GDP registered a 7.2 percent growth in 2007, while PCE grew by 6 percent. Things have of course changed dramatically in the past year; PCE growth is now a measly 1.8 percent as of the first semester, amid a GDP growth of just about 1 percent in the same period. But the reason for the dramatic slowdown in PCE even with continuing growth in remittances—which the BSP attests to be due to increased saving—remains to be good news for real estate, the traditional favorite saving instrument of Filipinos’.
The final item in Asuncion’s list is the greater breadth of the market for office and commercial space, and the upbeat prospects therein. Whereas Makati and Ortigas were dominant in 1997, office space development is now also brisk in Fort Bonifacio, Quezon City, Alabang and Cebu, among other places. And while there is a better match between supply and demand in BPO office space (with a slight surplus now projected), there is greater growth in the demand for shopping malls, hotels and other tourism-related facilities. The good news here is that the growth is even more geographically spread. Five new malls are coming up in General Santos City in the next year alone, and that is only one example of how more widely dispersed this type of property demand has become.
So while things may be slower overall, real estate appears to continue looking up.
Comments welcome at chabito@ateneo.edu
Philippine Daily Inquirer
Posted date: October 18, 2009
IF OUR ECONOMY AS A WHOLE has been spared from recession even as our erstwhile more dynamic neighbors have been badly hit, surely part of the reason is the resilience of the real property sector. The industry has managed to defy overall economic trends, particularly in the past year’s global economic downturn. Even as of the second quarter this year, real estate grew three times faster than the overall economy did. In contrast, it is this very same industry that had triggered the downfall of Thailand in 1997-1998, and of the United States in 2007-2008. It is therefore no small irony—and yet another manifestation of how different the Philippine economy can be from the usual mold—that real estate can contribute to the salvation of our economy when it has been the Achilles’ heel elsewhere. I’ve written twice in the last two years on why (NFL 5-7-07, 10-27-08).
Then and now
It turns out there’s more to it than what I’ve explained so far. I learned a thing or two last week from Vic Asuncion of CB Richard Ellis, a research and consultancy firm focused on real estate, when we both spoke before executives of a prominent player in property development. Underpinning his discussion was the dramatic contrast he portrayed between the overall Philippine economic landscape surrounding the 1997-98 Asian financial crisis and the current global one. He highlights five factors in this interesting contrast: lending activity, market demand, OFW remittances, personal consumption spending, and office space market supply.
On lending activity, financing was tight during the Asian crisis episode, as there was a general lack of liquidity in the system (translation: money was harder to come by, with less money in circulation and very little loan funds forthcoming from the banks). Interest rates were sky high, as the Bangko Sentral sent interest rates into the upper twenties in a vain attempt to forestall dramatic depreciation of the peso then. But today we see interest rates plumbing historical lows and the system awash with loanable funds, in the concern to stimulate economic activity within the global recessionary environment.
Broader, deeper
Another key difference between the two financial crises is the nature of the market demand then and now, with the current market being both broader and deeper. Foreign investors looking for office and commercial space dominated demand in the 1990s. Now it is a wider mix of foreign investors and local and foreign end-users looking for both residential and commercial space for various purposes. The current market spans the range of needs for office space for business process outsourcing (BPO) firms, commercial space in shopping malls, hotel and other tourism establishments, and residential housing units across various income categories.
Overseas Filipinos have also come to occupy a prominent if not dominant presence in the domestic property market, especially for residential condos, whereas demand from that source was negligible in the 1990s. Middle to upper range condo units continue to be snapped up by expatriate Filipinos who had wisely turned to real property investments here at home, rather than financial investment products whose values evaporated with the subprime collapse. I was amused to hear about complaints from residents in certain high-crust Makati condos on the invasion of their swimming pools by jeepney-loads of provinciano relatives of absentee OFW unit-owners during weekends. And an important factor here has been the way annual OFW remittances have shot up to $17 billion, whereas they amounted to less than one-third of that in 1997.
More dispersion
Asuncion also drew a contrast between personal consumption expenditures (PCE) in 1997-98, when GDP had slightly contracted and PCE grew at a “low 3.5 percent,” and the period just preceding the current global crisis. GDP registered a 7.2 percent growth in 2007, while PCE grew by 6 percent. Things have of course changed dramatically in the past year; PCE growth is now a measly 1.8 percent as of the first semester, amid a GDP growth of just about 1 percent in the same period. But the reason for the dramatic slowdown in PCE even with continuing growth in remittances—which the BSP attests to be due to increased saving—remains to be good news for real estate, the traditional favorite saving instrument of Filipinos’.
The final item in Asuncion’s list is the greater breadth of the market for office and commercial space, and the upbeat prospects therein. Whereas Makati and Ortigas were dominant in 1997, office space development is now also brisk in Fort Bonifacio, Quezon City, Alabang and Cebu, among other places. And while there is a better match between supply and demand in BPO office space (with a slight surplus now projected), there is greater growth in the demand for shopping malls, hotels and other tourism-related facilities. The good news here is that the growth is even more geographically spread. Five new malls are coming up in General Santos City in the next year alone, and that is only one example of how more widely dispersed this type of property demand has become.
So while things may be slower overall, real estate appears to continue looking up.
Comments welcome at chabito@ateneo.edu
Hong Kong: Asian migrant workers fight for their rights
Ninety nine percent of Indonesian migrants in Hong Kong work more than eight hours a day
Vincent Kolo, chinaworker.info
Sunday, 18 October 2009.
“We are workers, not slaves!” Victoria Park in Hong Kong was in the grip of ‘girl power’ of the trade union kind on Sunday 18 October. Indonesian migrant domestic workers were celebrating ten years of trade union organisation in Hong Kong with a large and colourful mobilisation to press their demands for inclusion in an impending minimum wage law and for an end to the notorious discrimination they suffer. An open air festival with speeches, music, and then a march to the Indonesian Consulate drew more than 2,000 women workers.
“We are going to the Consulate to protest that many Indonesian workers don’t even get the minimum monthly wage [for migrants] of HK$3,580,” said Iin from Indonesia who has worked in Hong Kong for six years. She and her friends held a banner calling for a blacklist over employers and recruitment agencies that violate migrants’ rights. This was a central demand of the demonstration. Violations are very common and take a variety of forms, from illegal confiscation of migrants’ passports, to underpayment of the paltry migrant minimum wage. The Indonesian Migrant Workers’ Union (IMWU), one of the organisers of the festival and march, have listed 40 agents of migrant workers’ assignments that they say should be blacklisted because they have committed such violations.
The ‘no welfare’ trap
The overwhelmingly female migrant workforce in Hong Kong constitutes the most exploited section of the city’s labour force. But they are also becoming one of the best organised – loud, clear, and radicalised. They deserve the full support of all other groups of workers. There are over 250,000 migrant domestic workers in Hong Kong, with most coming from the Philippines, closely followed by Indonesia. Other migrants come from Thailand, Nepal and Sri Lanka.
These women fill the void that exists in childcare, elderly care and other services, due to frailty of Hong Kong’s public service sector under a government with a notoriously anti-welfare “small government, big market” doctrine. Rather than pooling resources under a strong, democratically supervised, and state-funded (via a progressive taxation policy) system of childcare for example, each family must find their own ‘private solution’. This means that the migrant workforce are often severely exploited, whereas under a state-organised welfare system they would all work for one employer – the government – and be organised in powerful workplace trade unions. The Hong Kong government, which represents the interests of the tycoon class of capitalists, opposes any idea of a “welfare state”, which would strengthen the working class as a whole, not just migrant workers, and facilitate collective organisation.
The following facts illustrate the super-exploitation of migrant workers:
• One quarter of Hong Kong domestic workers receive less than the statutory minimum wage of HK$3,580 (US$462) per month.*
• Half work more than 15 hours per day**. Among Indonesian migrants, only 1% enjoy an 8 hour working day.
• 64% of Indonesian domestic workers are not given statutory holiday by their employer.
• 54% of Indonesian domestic workers are not given the legally mandated 1 day of rest per week.
[Sources: KOTKIHO, IMWU and AMC research in 2006. * and ** South China Morning Post, 5 October 2009]
‘I am a worker’
Mirabel comes from Iloilo in the Philippines and has lived in Hong Kong for seven years. She gets to go home to the Philippines to visit her family once every two years. She joined the trade union FDWU (Filipino Domestic Workers’ Union) four months ago because she wants “the government to give me my rights”. Previously Mirabel had only been organised through her church. “We encourage all migrant workers to join the union, but many are afraid their employers will sack them,” she told chinaworker.info.
“We don’t call ourselves ‘domestic helpers’, we say ‘domestic workers’ – I am a worker, not a helper,” she says defiantly. “I work for 16 hours a day taking care of a grandmother. We want to work only 8 hours, anything over that should be overtime and I should be paid accordingly,” she said. Mirabel is adamant that the Hong Kong government’s new minimum wage law must apply to migrant workers. “If they don’t include us in the minimum wage law, then they are exploiting me too much. My hourly rate nowadays is just HK$19, she explained.”
Blacklist over bad practise
Muthi Hidayati, the Secretary-General of KOTKIHO (Coalition of Indonesian Migrant Workers’ Groups in Hong Kong) told chinaworker.info, “Today we are trying to push the Indonesian government and the Hong Kong government to blacklist agencies and employers who violate our rights.”
There are many types of violation, she explained. Many employers pay below the minimum wage for migrants, with some paying as little as around HK$2,000 a month. Some employers and agencies keep workers’ ID cards, passports, personal documents or contract letters, which is illegal. Employers also refuse to give workers their statutory holiday entitlement, with some allowing only one day off per month, Muthi said. Cases of sexual harassment or mistreatment and physical attacks also occur, with migrants in an extremely vulnerable position economically and legally. The government’s infamous ‘2-year rule’ means that migrant workers whose contract is terminated have just 14 days to find alternative work before they must leave Hong Kong. “It’s not enough time,” argued Muthi. “The law is discriminatory.”
She explained that many Indonesian women come to Hong Kong with university degrees or, like herself, a secondary high school education, but are unable to find jobs in their own country that are compatible with their level of qualifications. Often they are cleaning and cooking for people with fewer educational qualifications, but economically, the life of a low-paid migrant in Hong Kong is the only way out. “Our government is very bad,” she said. “Indonesia’s people are getting poorer and poorer now.”
New minimum wage law
“We want the Hong Kong government to include us in the minimum wage legislation. They want to exempt us, this is discrimination,” explained Muthi.
Donald Tsang’s government will soon announce its long promised proposals for a statutory minimum wage for Hong Kong workers. But the government is already maneuvering to exclude migrants, the lowest paid section, using such arguments as that migrants’ working hours are too hard to calculate(!), and that food and accommodation is included in many job contracts. In fact, the government’s attempt to exempt migrants is in breach of its international commitments. Hong Kong has signed the ILO Convention No. 97 Migration for Employment Convention (Revised), 1949 which states that “Each Member for which this Convention is in force undertakes to apply, without discrimination in respect of nationality, race, religion or sex, to immigrants lawfully within its territory, treatment no less favourable than that which it applies to its own nationals ....”
This issue of migrant worker inclusion is a central one to the wider struggle for a minimum wage, set at a level that workers can live upon. Nearly one quarter of Hong Kong’s indigenous workforce earn less than HK$5,000 per month, and many young workers especially at the ubiquitous fast-food chains and convenience stores get paid less than HK$20 (US644$2.58) an hour.
Without a big campaign of pressure and a mass recruitment drive by trade unions and left organisations among low paid workers, the risk is very real that the new minimum wage will be set at a derisory level. The right-wing pro-Beijing Liberal Party for example, a party close to the Tsang administration, calls for the new minimum to be set “not higher” than HK$24 an hour, which based on an eight-hour day means a monthly wage of just HK$4,992 (US$644). As one newspaper joked, that’s not a minimum wage, it’s a minimal wage! The fighting example of migrant women can inspire other workers and youth in Hong Kong to get organised and fight for their rights.
Vincent Kolo, chinaworker.info
Sunday, 18 October 2009.
“We are workers, not slaves!” Victoria Park in Hong Kong was in the grip of ‘girl power’ of the trade union kind on Sunday 18 October. Indonesian migrant domestic workers were celebrating ten years of trade union organisation in Hong Kong with a large and colourful mobilisation to press their demands for inclusion in an impending minimum wage law and for an end to the notorious discrimination they suffer. An open air festival with speeches, music, and then a march to the Indonesian Consulate drew more than 2,000 women workers.
“We are going to the Consulate to protest that many Indonesian workers don’t even get the minimum monthly wage [for migrants] of HK$3,580,” said Iin from Indonesia who has worked in Hong Kong for six years. She and her friends held a banner calling for a blacklist over employers and recruitment agencies that violate migrants’ rights. This was a central demand of the demonstration. Violations are very common and take a variety of forms, from illegal confiscation of migrants’ passports, to underpayment of the paltry migrant minimum wage. The Indonesian Migrant Workers’ Union (IMWU), one of the organisers of the festival and march, have listed 40 agents of migrant workers’ assignments that they say should be blacklisted because they have committed such violations.
The ‘no welfare’ trap
The overwhelmingly female migrant workforce in Hong Kong constitutes the most exploited section of the city’s labour force. But they are also becoming one of the best organised – loud, clear, and radicalised. They deserve the full support of all other groups of workers. There are over 250,000 migrant domestic workers in Hong Kong, with most coming from the Philippines, closely followed by Indonesia. Other migrants come from Thailand, Nepal and Sri Lanka.
These women fill the void that exists in childcare, elderly care and other services, due to frailty of Hong Kong’s public service sector under a government with a notoriously anti-welfare “small government, big market” doctrine. Rather than pooling resources under a strong, democratically supervised, and state-funded (via a progressive taxation policy) system of childcare for example, each family must find their own ‘private solution’. This means that the migrant workforce are often severely exploited, whereas under a state-organised welfare system they would all work for one employer – the government – and be organised in powerful workplace trade unions. The Hong Kong government, which represents the interests of the tycoon class of capitalists, opposes any idea of a “welfare state”, which would strengthen the working class as a whole, not just migrant workers, and facilitate collective organisation.
The following facts illustrate the super-exploitation of migrant workers:
• One quarter of Hong Kong domestic workers receive less than the statutory minimum wage of HK$3,580 (US$462) per month.*
• Half work more than 15 hours per day**. Among Indonesian migrants, only 1% enjoy an 8 hour working day.
• 64% of Indonesian domestic workers are not given statutory holiday by their employer.
• 54% of Indonesian domestic workers are not given the legally mandated 1 day of rest per week.
[Sources: KOTKIHO, IMWU and AMC research in 2006. * and ** South China Morning Post, 5 October 2009]
‘I am a worker’
Mirabel comes from Iloilo in the Philippines and has lived in Hong Kong for seven years. She gets to go home to the Philippines to visit her family once every two years. She joined the trade union FDWU (Filipino Domestic Workers’ Union) four months ago because she wants “the government to give me my rights”. Previously Mirabel had only been organised through her church. “We encourage all migrant workers to join the union, but many are afraid their employers will sack them,” she told chinaworker.info.
“We don’t call ourselves ‘domestic helpers’, we say ‘domestic workers’ – I am a worker, not a helper,” she says defiantly. “I work for 16 hours a day taking care of a grandmother. We want to work only 8 hours, anything over that should be overtime and I should be paid accordingly,” she said. Mirabel is adamant that the Hong Kong government’s new minimum wage law must apply to migrant workers. “If they don’t include us in the minimum wage law, then they are exploiting me too much. My hourly rate nowadays is just HK$19, she explained.”
Blacklist over bad practise
Muthi Hidayati, the Secretary-General of KOTKIHO (Coalition of Indonesian Migrant Workers’ Groups in Hong Kong) told chinaworker.info, “Today we are trying to push the Indonesian government and the Hong Kong government to blacklist agencies and employers who violate our rights.”
There are many types of violation, she explained. Many employers pay below the minimum wage for migrants, with some paying as little as around HK$2,000 a month. Some employers and agencies keep workers’ ID cards, passports, personal documents or contract letters, which is illegal. Employers also refuse to give workers their statutory holiday entitlement, with some allowing only one day off per month, Muthi said. Cases of sexual harassment or mistreatment and physical attacks also occur, with migrants in an extremely vulnerable position economically and legally. The government’s infamous ‘2-year rule’ means that migrant workers whose contract is terminated have just 14 days to find alternative work before they must leave Hong Kong. “It’s not enough time,” argued Muthi. “The law is discriminatory.”
She explained that many Indonesian women come to Hong Kong with university degrees or, like herself, a secondary high school education, but are unable to find jobs in their own country that are compatible with their level of qualifications. Often they are cleaning and cooking for people with fewer educational qualifications, but economically, the life of a low-paid migrant in Hong Kong is the only way out. “Our government is very bad,” she said. “Indonesia’s people are getting poorer and poorer now.”
New minimum wage law
“We want the Hong Kong government to include us in the minimum wage legislation. They want to exempt us, this is discrimination,” explained Muthi.
Donald Tsang’s government will soon announce its long promised proposals for a statutory minimum wage for Hong Kong workers. But the government is already maneuvering to exclude migrants, the lowest paid section, using such arguments as that migrants’ working hours are too hard to calculate(!), and that food and accommodation is included in many job contracts. In fact, the government’s attempt to exempt migrants is in breach of its international commitments. Hong Kong has signed the ILO Convention No. 97 Migration for Employment Convention (Revised), 1949 which states that “Each Member for which this Convention is in force undertakes to apply, without discrimination in respect of nationality, race, religion or sex, to immigrants lawfully within its territory, treatment no less favourable than that which it applies to its own nationals ....”
This issue of migrant worker inclusion is a central one to the wider struggle for a minimum wage, set at a level that workers can live upon. Nearly one quarter of Hong Kong’s indigenous workforce earn less than HK$5,000 per month, and many young workers especially at the ubiquitous fast-food chains and convenience stores get paid less than HK$20 (US644$2.58) an hour.
Without a big campaign of pressure and a mass recruitment drive by trade unions and left organisations among low paid workers, the risk is very real that the new minimum wage will be set at a derisory level. The right-wing pro-Beijing Liberal Party for example, a party close to the Tsang administration, calls for the new minimum to be set “not higher” than HK$24 an hour, which based on an eight-hour day means a monthly wage of just HK$4,992 (US$644). As one newspaper joked, that’s not a minimum wage, it’s a minimal wage! The fighting example of migrant women can inspire other workers and youth in Hong Kong to get organised and fight for their rights.
Wednesday, October 14, 2009
Ways to make developers survive crisis
By Tessa Salazar
Philippine Daily Inquirer
Posted date: March 18, 2009
LAST WEEK, Inquirer property started a series that reported on Global Property Guide ringing the alarm bells that “Asia is no longer insulated” from the financial crisis originating from the West.
Proof that troubled times has landed on our shores as early as late 2008 is evident in Global Property Guide’s survey of publicly-available house-price time-series for 2008, which showed prices declining steadily. And seen from a global perspective, the downturn is still accelerating.
Timely suggestions
So what can developers do to stay afloat and competitive during these times? Prince Christian Cruz, GPG senior economist, provides these timely suggestions:
• Developers can provide cheaper housing units by cutting back on certain luxuries such as gyms, function halls and swimming pools. Middle and working-class households are more concerned with basic necessities such as access to public markets, schools, churches and public transport.
• While the provision of ample parking space is welcome, developers must focus on accessibility by ensuring that households can reach their homes quickly and safely even if they use public transport. Most property firms develop cheap and affordable housing units located in nearby provinces such as Rizal, Bulacan, Cavite and Laguna where commuting time takes 2 to 3 hours to major commercial hubs in Metro Manila.
• Developers must know the buying capacity of working and middle-class families. The international standard for affordable housing is 3 to 5 times the annual income. This implies that for someone who earns P10,000 a month, an affordable house for him/her should cost between P360,000 and P600,000.
• Developers can explore the potentials offering rent-to-own schemes for prospective homebuyers. Instead of relying on lump sum payments (most overseas Filipinos pay in cash or installment divided over 1 to 2 years), developers get a continuous income stream for 10 to 20 years through a rent-to-own scheme.
Cruz was also worried at how “confined” the Philippine housing boom has been, with developers focusing mainly on overseas Filipinos while largely ignoring an enormous local demand from the locally employed middle-class and working-class sector. Now that the demand from overseas Filipinos was waning, an oversupply of unsold units could be “redirected” to local buyers.
Blessing in disguise?
Alejandro S. Mañalac, president of the National Real Estate Association, said that for his part, he has not heard of any condominium price drops (Inquirer Property reported last week that, according to the GPG report, prime 3-bedroom condo prices in Makati fell 2 percent in 2008 after an 11-percent rise during 2007).
“These data may have been based on resale units from owners (not developers) who had to make sacrifice sales,” Mañalac said.
He added: “The US crisis which started in 2008 was a blessing in disguise which caused the construction of more new high-rise projects to slow down lest we experience a glut, which is actually happening already in some areas where you have thousands of residential units due for turnover starting this year up to 2012.”
According to Mañalac, the Ifric 15 issue also made developers reconsider their plans to build high-rise buildings (which takes 3 to 5 years to complete) in favor of end-user projects which they could turn over within a year, and thus recognize their income in their books. “It’s a good thing that the implementation of this new accounting reporting standard was deferred until 2012,” he said.
“Another reason (the financial crisis) came at an almost perfect timing is that banks were already getting to be very aggressive in financing buyers up to 90 percent of the purchase price for some projects. The good thing, though, is that they were still very strict with the screening and compliance with their requirements.”
Pricing schemes
Mañalac agreed that developers should reevaluate their pricing schemes, especially of condos, in order to sell. “But this does not mean that they have to lower their prices since they really still have to cover themselves for future increases in construction costs. However, the developers should be more prudent in their price increases since the market is made up of end-users who are really looking for more value for their money, unlike before when end-users, investors and even speculators took up the units.”
Mañalac added that developers should also be more wary of offering easy-payment schemes which are somehow similar to “subprime” accounts—one of the key sources of the US housing crisis. Based on actual data, most of those who canceled their payments or purchases were buyers who paid minimal amounts (usually the reservation fee rates) and a few monthly installments under the “no down payment” terms. On the other hand, buyers who had already made substantial down payments (20 to 30 percent of the commercial value of the property) were less likely to discontinue their investment.
Will there be more condo projects put up, but with less people buying them?
Mañalac sees the building half-full.
“Unlike most of our neighbors in Asia, preselling is very much an accepted practice here compared to their policies wherein the developers will have to build first before they can sell. Going a step further, some of the big developers only start their construction once they have hit over 60 percent in sales. This means most if not all the buildings under construction that you see now are already substantially sold if not totally sold out already. Now, having tenants for those units which were purchased primarily to generate rental income is another story.”
Philippine Daily Inquirer
Posted date: March 18, 2009
LAST WEEK, Inquirer property started a series that reported on Global Property Guide ringing the alarm bells that “Asia is no longer insulated” from the financial crisis originating from the West.
Proof that troubled times has landed on our shores as early as late 2008 is evident in Global Property Guide’s survey of publicly-available house-price time-series for 2008, which showed prices declining steadily. And seen from a global perspective, the downturn is still accelerating.
Timely suggestions
So what can developers do to stay afloat and competitive during these times? Prince Christian Cruz, GPG senior economist, provides these timely suggestions:
• Developers can provide cheaper housing units by cutting back on certain luxuries such as gyms, function halls and swimming pools. Middle and working-class households are more concerned with basic necessities such as access to public markets, schools, churches and public transport.
• While the provision of ample parking space is welcome, developers must focus on accessibility by ensuring that households can reach their homes quickly and safely even if they use public transport. Most property firms develop cheap and affordable housing units located in nearby provinces such as Rizal, Bulacan, Cavite and Laguna where commuting time takes 2 to 3 hours to major commercial hubs in Metro Manila.
• Developers must know the buying capacity of working and middle-class families. The international standard for affordable housing is 3 to 5 times the annual income. This implies that for someone who earns P10,000 a month, an affordable house for him/her should cost between P360,000 and P600,000.
• Developers can explore the potentials offering rent-to-own schemes for prospective homebuyers. Instead of relying on lump sum payments (most overseas Filipinos pay in cash or installment divided over 1 to 2 years), developers get a continuous income stream for 10 to 20 years through a rent-to-own scheme.
Cruz was also worried at how “confined” the Philippine housing boom has been, with developers focusing mainly on overseas Filipinos while largely ignoring an enormous local demand from the locally employed middle-class and working-class sector. Now that the demand from overseas Filipinos was waning, an oversupply of unsold units could be “redirected” to local buyers.
Blessing in disguise?
Alejandro S. Mañalac, president of the National Real Estate Association, said that for his part, he has not heard of any condominium price drops (Inquirer Property reported last week that, according to the GPG report, prime 3-bedroom condo prices in Makati fell 2 percent in 2008 after an 11-percent rise during 2007).
“These data may have been based on resale units from owners (not developers) who had to make sacrifice sales,” Mañalac said.
He added: “The US crisis which started in 2008 was a blessing in disguise which caused the construction of more new high-rise projects to slow down lest we experience a glut, which is actually happening already in some areas where you have thousands of residential units due for turnover starting this year up to 2012.”
According to Mañalac, the Ifric 15 issue also made developers reconsider their plans to build high-rise buildings (which takes 3 to 5 years to complete) in favor of end-user projects which they could turn over within a year, and thus recognize their income in their books. “It’s a good thing that the implementation of this new accounting reporting standard was deferred until 2012,” he said.
“Another reason (the financial crisis) came at an almost perfect timing is that banks were already getting to be very aggressive in financing buyers up to 90 percent of the purchase price for some projects. The good thing, though, is that they were still very strict with the screening and compliance with their requirements.”
Pricing schemes
Mañalac agreed that developers should reevaluate their pricing schemes, especially of condos, in order to sell. “But this does not mean that they have to lower their prices since they really still have to cover themselves for future increases in construction costs. However, the developers should be more prudent in their price increases since the market is made up of end-users who are really looking for more value for their money, unlike before when end-users, investors and even speculators took up the units.”
Mañalac added that developers should also be more wary of offering easy-payment schemes which are somehow similar to “subprime” accounts—one of the key sources of the US housing crisis. Based on actual data, most of those who canceled their payments or purchases were buyers who paid minimal amounts (usually the reservation fee rates) and a few monthly installments under the “no down payment” terms. On the other hand, buyers who had already made substantial down payments (20 to 30 percent of the commercial value of the property) were less likely to discontinue their investment.
Will there be more condo projects put up, but with less people buying them?
Mañalac sees the building half-full.
“Unlike most of our neighbors in Asia, preselling is very much an accepted practice here compared to their policies wherein the developers will have to build first before they can sell. Going a step further, some of the big developers only start their construction once they have hit over 60 percent in sales. This means most if not all the buildings under construction that you see now are already substantially sold if not totally sold out already. Now, having tenants for those units which were purchased primarily to generate rental income is another story.”
Monday, October 12, 2009
Affordable units in urban centers getting the most inquiries
By Doris Dumlao
Philippine Daily Inquirer
Posted date: October 11, 2009
DEMAND FOR AFFORDABLE, residential condominium units in the metropolis is expected to increase in the aftermath of the devastating flood caused by Tropical Storm “Ondoy,” property experts said.
"All of a sudden, there has been an increase in inquiries from buyers looking for [condominium units],” said Danilo Ignacio, president of Eton Properties, the Lucio Tan group’s property development arm.
“There might be potentially a trend towards condos because of the safety of high-rise buildings. A lot of people are now saying, maybe we should have lived in condos,” Ignacio said.
Ayala Land Inc. senior vice president Bernard Dy, who handles the residential property segment, said condominium living in the Philippines had been gaining acceptance over the years and agreed that “Ondoy” could add to the impetus.
“In the 1990s, condo living was not yet [popular]. This (rising popularity) is due to a multitude of factors, such as people wanting to have a high quality of life and wanting to live right within the city. Also, OFWs (overseas Filipino workers) are used to living in high-rise buildings, so when they come back here there is no aversion,” Dy said in a separate interview.
“So you see a trend in that direction and now you add another factor—people worried about flooding,” Dy said.
But as to the potential magnitude of demand from those directly hit by Ondoy, Dy said it’s hard to project at this time.
“Because of the displacement. The question is: where do they allocate funds? Do they buy a new property or repair their homes?” Dy said.
For new homebuyers who have turned cautious after Ondoy, Ignacio said the demand would be for high-rise condominium units in urban hubs that will be affordable to the middle-income market.
“The niche market is affordable but high-rise quality residence. It doesn’t have to be big, but it must have high elevation,” he said.
As to building designs, Ignacio said basements would likely become less popular.
“There will be higher preference for above-ground parking,” he said.
This is amid reports that some high-rise buildings, even in elevated areas like Makati, had suffered from flooding in the basement because of Ondoy.
For buyers of single-detached residential properties, Ignacio said there would likely be a shift in trend toward multistory houses and away from bungalows.
Philippine Daily Inquirer
Posted date: October 11, 2009
DEMAND FOR AFFORDABLE, residential condominium units in the metropolis is expected to increase in the aftermath of the devastating flood caused by Tropical Storm “Ondoy,” property experts said.
"All of a sudden, there has been an increase in inquiries from buyers looking for [condominium units],” said Danilo Ignacio, president of Eton Properties, the Lucio Tan group’s property development arm.
“There might be potentially a trend towards condos because of the safety of high-rise buildings. A lot of people are now saying, maybe we should have lived in condos,” Ignacio said.
Ayala Land Inc. senior vice president Bernard Dy, who handles the residential property segment, said condominium living in the Philippines had been gaining acceptance over the years and agreed that “Ondoy” could add to the impetus.
“In the 1990s, condo living was not yet [popular]. This (rising popularity) is due to a multitude of factors, such as people wanting to have a high quality of life and wanting to live right within the city. Also, OFWs (overseas Filipino workers) are used to living in high-rise buildings, so when they come back here there is no aversion,” Dy said in a separate interview.
“So you see a trend in that direction and now you add another factor—people worried about flooding,” Dy said.
But as to the potential magnitude of demand from those directly hit by Ondoy, Dy said it’s hard to project at this time.
“Because of the displacement. The question is: where do they allocate funds? Do they buy a new property or repair their homes?” Dy said.
For new homebuyers who have turned cautious after Ondoy, Ignacio said the demand would be for high-rise condominium units in urban hubs that will be affordable to the middle-income market.
“The niche market is affordable but high-rise quality residence. It doesn’t have to be big, but it must have high elevation,” he said.
As to building designs, Ignacio said basements would likely become less popular.
“There will be higher preference for above-ground parking,” he said.
This is amid reports that some high-rise buildings, even in elevated areas like Makati, had suffered from flooding in the basement because of Ondoy.
For buyers of single-detached residential properties, Ignacio said there would likely be a shift in trend toward multistory houses and away from bungalows.
Belle to spend P14B on Manila Bay casino project
HIGH-END PROPERTY developer Belle Corp. will mark its entry into the lucrative gaming industry with the construction of a multibillion-peso casino complex in Parañaque next year.
Should the casino project prove to be more profitable than its property business, Belle Corp. vice-chairman Willy N. Ocier said in an interview that the company might swap undeveloped properties in its Tagaytay Highlands flagship project with shares in sister Highlands Prime, Inc. and let the latter handle the development of the entire place.
"It is the general overhaul of the casino [industry] in the country [that we are preparing for]. You have to remember that the casino has been run by the government for almost [three decades] and now they woke up ... [they] will just give licenses so that the casino will be owned and operated by [private firms] which will allow more [advanced] games," Mr. Ocier said.
The group plans to start the construction of its P14-billion casino complex on its 6.2-hectare Parañaque lot next year, while its operations will start in 2011. The P14 billion is part of the total P46-billion investment commitment given by Belle and the SM group to state-led Philippine Amusement Gaming Corp. (Pagcor), which is pushing for the development of a huge entertainment and leisure project at the Manila Bay reclamation area.
Pagcor gave licenses to Aruze of Japan, a consortium led by Megaworld Corp. of Andrew L. Tan, and Premium Leisure and Amusement, Inc.
Belle recently bought Premium Leisure and Amusement from the Henry Sy-led SM group, with the mall and banking conglomerate getting more shares in listed Belle in return. The Sy family now holds a 50% stake in Belle.
Mr. Ocier said the remaining P32 billion, which will be used for the non-gaming developments like hotels, would be shouldered by the SM group.
The location of the proposed casino, will allow it to serve as the "gateway" to Pagcor’s ambitious Bagong Nayong Pilipino Manila Bay Entertainment City project.
The Belle project will have retail and hotel components. To jump-start it, Belle will start with 15 suites to accommodate the "high rollers," Mr. Ocier said.
Belle will likewise create a special purpose vehicle to accommodate the entry of foreign investors who will bring in funds and the expertise to manage the casino. This will give Belle the flexibility to open more casinos in the future, he said.
Mr. Ocier did not disclose the identities of the foreign operators but said Belle was talking to three publicly listed foreign firms.
"The casino business is all about tourism and entertainment. The gaming market in Asia is very big that is why you see multi-billion projects being done in Macau and Singapore and we are basically just catching a small part of the market," he added.
Mr. Ocier said Belle was looking at attracting players from the Asian markets especially those who do not want a "highly regulated environment."
The Philippines should be able to attract many "hardcore" players, he added.
"Eventually, the Pagcor casinos will be phased out or will lose their business to us ... when we start making money and [building] new casinos, it will create that market to pull in more demand from other [countries]," he said.
Share swap?
The gaming business is said to be one of the most profitable in the country, proving to be resilient during economic downturns.
Revenues generated by listed Pacific Online Systems Corp., for instance, grew by almost a third to P495.5 million from January to June, while that of Philweb Corp. surged by 88% to P363 million. Profits of listed Prime Gaming Philippines, Inc. and Leisure & Resorts World Corp. also rose during the period.
When asked whether the company was willing to give up its property business to Highlands Prime, Mr. Ocier said Belle was open to the idea and studying it carefully.
But Belle has yet to make a final decision since the casino project is not yet operational.
"That is how we want to rationalize the two companies. In two years or three years’ time, we would want to sit down and look at our priorities and our direction because we would like to think that a big part of our revenues will come from the casino business," Mr. Ocier said. "It [would] not make sense for the two companies to be doing the same thing and selling to the same market. [Selling our undeveloped lands to Highlands Prime] is something that we are considering."
Belle owns 36% of listed Highlands Prime, which also develops parts of Tagaytay Highlands.
Mr. Ocier said Belle will likely undergo a share swap with Highlands Prime for its undeveloped 800 hectares should it decide to leave the property business. Belle estimated the value of the land to be at P800 million.
Belle has long been making attempts to tap the gaming and leisure industry. More than a decade ago, it made plans to develop a casino-hotel project on the same Parañaque lot but this was shelved because of the Asian financial crisis. It also failed in an attempt to revive the jai-alai betting business.
Shares in the firm climbed by 1.42% to P1.42 on Friday.
--------------------
BY KRISTINE JANE R. LIU, Reporter
Story Location: http://www.bworldonline.com/BW101209/content.php?id=044
Should the casino project prove to be more profitable than its property business, Belle Corp. vice-chairman Willy N. Ocier said in an interview that the company might swap undeveloped properties in its Tagaytay Highlands flagship project with shares in sister Highlands Prime, Inc. and let the latter handle the development of the entire place.
"It is the general overhaul of the casino [industry] in the country [that we are preparing for]. You have to remember that the casino has been run by the government for almost [three decades] and now they woke up ... [they] will just give licenses so that the casino will be owned and operated by [private firms] which will allow more [advanced] games," Mr. Ocier said.
The group plans to start the construction of its P14-billion casino complex on its 6.2-hectare Parañaque lot next year, while its operations will start in 2011. The P14 billion is part of the total P46-billion investment commitment given by Belle and the SM group to state-led Philippine Amusement Gaming Corp. (Pagcor), which is pushing for the development of a huge entertainment and leisure project at the Manila Bay reclamation area.
Pagcor gave licenses to Aruze of Japan, a consortium led by Megaworld Corp. of Andrew L. Tan, and Premium Leisure and Amusement, Inc.
Belle recently bought Premium Leisure and Amusement from the Henry Sy-led SM group, with the mall and banking conglomerate getting more shares in listed Belle in return. The Sy family now holds a 50% stake in Belle.
Mr. Ocier said the remaining P32 billion, which will be used for the non-gaming developments like hotels, would be shouldered by the SM group.
The location of the proposed casino, will allow it to serve as the "gateway" to Pagcor’s ambitious Bagong Nayong Pilipino Manila Bay Entertainment City project.
The Belle project will have retail and hotel components. To jump-start it, Belle will start with 15 suites to accommodate the "high rollers," Mr. Ocier said.
Belle will likewise create a special purpose vehicle to accommodate the entry of foreign investors who will bring in funds and the expertise to manage the casino. This will give Belle the flexibility to open more casinos in the future, he said.
Mr. Ocier did not disclose the identities of the foreign operators but said Belle was talking to three publicly listed foreign firms.
"The casino business is all about tourism and entertainment. The gaming market in Asia is very big that is why you see multi-billion projects being done in Macau and Singapore and we are basically just catching a small part of the market," he added.
Mr. Ocier said Belle was looking at attracting players from the Asian markets especially those who do not want a "highly regulated environment."
The Philippines should be able to attract many "hardcore" players, he added.
"Eventually, the Pagcor casinos will be phased out or will lose their business to us ... when we start making money and [building] new casinos, it will create that market to pull in more demand from other [countries]," he said.
Share swap?
The gaming business is said to be one of the most profitable in the country, proving to be resilient during economic downturns.
Revenues generated by listed Pacific Online Systems Corp., for instance, grew by almost a third to P495.5 million from January to June, while that of Philweb Corp. surged by 88% to P363 million. Profits of listed Prime Gaming Philippines, Inc. and Leisure & Resorts World Corp. also rose during the period.
When asked whether the company was willing to give up its property business to Highlands Prime, Mr. Ocier said Belle was open to the idea and studying it carefully.
But Belle has yet to make a final decision since the casino project is not yet operational.
"That is how we want to rationalize the two companies. In two years or three years’ time, we would want to sit down and look at our priorities and our direction because we would like to think that a big part of our revenues will come from the casino business," Mr. Ocier said. "It [would] not make sense for the two companies to be doing the same thing and selling to the same market. [Selling our undeveloped lands to Highlands Prime] is something that we are considering."
Belle owns 36% of listed Highlands Prime, which also develops parts of Tagaytay Highlands.
Mr. Ocier said Belle will likely undergo a share swap with Highlands Prime for its undeveloped 800 hectares should it decide to leave the property business. Belle estimated the value of the land to be at P800 million.
Belle has long been making attempts to tap the gaming and leisure industry. More than a decade ago, it made plans to develop a casino-hotel project on the same Parañaque lot but this was shelved because of the Asian financial crisis. It also failed in an attempt to revive the jai-alai betting business.
Shares in the firm climbed by 1.42% to P1.42 on Friday.
--------------------
BY KRISTINE JANE R. LIU, Reporter
Story Location: http://www.bworldonline.com/BW101209/content.php?id=044
Saturday, October 10, 2009
How to buy a house that won’t get flooded
By Tessa Salazar
Philippine Daily Inquirer
Posted date: October 09, 2009
MANILA, Philippines – See the glass half full, not half empty.
That’s how property experts view the recent spate of heavy rains on Metro Manila and the rest of Luzon. As what had been said in this section many times now, the onset of the rainy season should be the perfect time to look for property whether you’re planning to buy a vacant lot, a beach home, commercial property or a residential home. The inclement weather will reveal many things that would have otherwise stayed hidden during the dry season.
Here are timely, and sometimes lifesaving, advice from experts.
1 Ask for a disclosure statement from developers. Andy Mañalac, president of National Real Estate Association, told Philippine Daily Inquirer Property last week that it is about time that sellers, including developers, should be provided with a disclosure statement, which should be read to the buyers by the sellers.
It usually contains all the important details about the property –orientation, type of soil, description of land, geological and development history (e.g. was it a dry riverbed or a swamp? was it reclaimed? etc.).
“This [disclosure statement] is common practice in the United States, why can’t we adapt it here? It should be a standard document in a real estate transaction,” he said.
2 Practicing green architect Amado de Jesus said the rainy season would be the best time to check for soil erosion and poor sewerage and drainage system in the area. “If the next lot is higher, especially at the back, where does water flow? Does it flow into your lot?” A downpour would also be the perfect time to see if your prospective subdivisions have poor drainage systems.
3 Buyers should research and demand information, and developers should give proper information and respect their commitments. Take your time, listen to different people and do your homework. Alexis A. Acacio, an associate professor of civil engineering at the University of the Philippines, told Inquirer Property two years ago that visiting the site during the rains would show the area’s traffic behavior as well. It would also show if the roads have a siltation problem (prone to developing mud). Mud on the road is a telltale indication of the “looseness” of the soil where the road is situated.
4 Acacio said that rains would also betray poor “ingress and egress” (entry and exit) of the location, or the accessibility of the location as access roads are as important as the site itself.
Acacio stressed that rains would also reveal the area’s vulnerability to landslides.
5 Aside from the ocular inspection, Acacio added that potential buyers should ask residents if the area floods when it rains. Two tell-tale signs of chronic flooding are the presence of sandbags and unusually elevated homes in the area.
6 The rainy season can also reveal poorly maintained, thus dangerous, electrical systems. However, electrical inspections should be conducted with the assistance of professionals, Acacio stressed.
7 Another indicator is a wet ceiling, which would hint of a leaky roof. Acacio added that when it is not raining, watch out for watermarks in the ceiling as these are signs of a defective roof system. Also look out for porous walls, firewalls and walls that are continuously exposed to rainfall. These walls manifest leaks and moisture if they are not properly made and maintained.
8 If a property is adjacent or near a river or lake, check the site during heavy rainfall and watch out for overflows.
Also take note of warped cabinets. If the wall behind the cabinet has a water leak, then the wooden cabinet would naturally warp.
9 Cesar Santos, a real estate appraiser and educator, suggests that owners of any real estate property in any affected villages in Marikina, Cainta, and Pasig who assign sentimental values on their property and would refuse to sell, can convert their homes from a one-story into a two-story building with a roof deck, if budget allows. Design the house to counter future floods. Get the help of an engineer or an architect to do this.
10 “A community action can reduce the effects of a flood,” Santos said. “We cannot prevent Marikina River from overflowing, however, we can reduce that through local governance and right attitude. Reforestation is a must and must be part of students curriculum,” he added.
Protecting the environment must be part of the curriculum from elementary to college. Educate the people on proper waste disposal, and prioritize the relocation of informal settlers, Santos urged.
Philippine Daily Inquirer
Posted date: October 09, 2009
MANILA, Philippines – See the glass half full, not half empty.
That’s how property experts view the recent spate of heavy rains on Metro Manila and the rest of Luzon. As what had been said in this section many times now, the onset of the rainy season should be the perfect time to look for property whether you’re planning to buy a vacant lot, a beach home, commercial property or a residential home. The inclement weather will reveal many things that would have otherwise stayed hidden during the dry season.
Here are timely, and sometimes lifesaving, advice from experts.
1 Ask for a disclosure statement from developers. Andy Mañalac, president of National Real Estate Association, told Philippine Daily Inquirer Property last week that it is about time that sellers, including developers, should be provided with a disclosure statement, which should be read to the buyers by the sellers.
It usually contains all the important details about the property –orientation, type of soil, description of land, geological and development history (e.g. was it a dry riverbed or a swamp? was it reclaimed? etc.).
“This [disclosure statement] is common practice in the United States, why can’t we adapt it here? It should be a standard document in a real estate transaction,” he said.
2 Practicing green architect Amado de Jesus said the rainy season would be the best time to check for soil erosion and poor sewerage and drainage system in the area. “If the next lot is higher, especially at the back, where does water flow? Does it flow into your lot?” A downpour would also be the perfect time to see if your prospective subdivisions have poor drainage systems.
3 Buyers should research and demand information, and developers should give proper information and respect their commitments. Take your time, listen to different people and do your homework. Alexis A. Acacio, an associate professor of civil engineering at the University of the Philippines, told Inquirer Property two years ago that visiting the site during the rains would show the area’s traffic behavior as well. It would also show if the roads have a siltation problem (prone to developing mud). Mud on the road is a telltale indication of the “looseness” of the soil where the road is situated.
4 Acacio said that rains would also betray poor “ingress and egress” (entry and exit) of the location, or the accessibility of the location as access roads are as important as the site itself.
Acacio stressed that rains would also reveal the area’s vulnerability to landslides.
5 Aside from the ocular inspection, Acacio added that potential buyers should ask residents if the area floods when it rains. Two tell-tale signs of chronic flooding are the presence of sandbags and unusually elevated homes in the area.
6 The rainy season can also reveal poorly maintained, thus dangerous, electrical systems. However, electrical inspections should be conducted with the assistance of professionals, Acacio stressed.
7 Another indicator is a wet ceiling, which would hint of a leaky roof. Acacio added that when it is not raining, watch out for watermarks in the ceiling as these are signs of a defective roof system. Also look out for porous walls, firewalls and walls that are continuously exposed to rainfall. These walls manifest leaks and moisture if they are not properly made and maintained.
8 If a property is adjacent or near a river or lake, check the site during heavy rainfall and watch out for overflows.
Also take note of warped cabinets. If the wall behind the cabinet has a water leak, then the wooden cabinet would naturally warp.
9 Cesar Santos, a real estate appraiser and educator, suggests that owners of any real estate property in any affected villages in Marikina, Cainta, and Pasig who assign sentimental values on their property and would refuse to sell, can convert their homes from a one-story into a two-story building with a roof deck, if budget allows. Design the house to counter future floods. Get the help of an engineer or an architect to do this.
10 “A community action can reduce the effects of a flood,” Santos said. “We cannot prevent Marikina River from overflowing, however, we can reduce that through local governance and right attitude. Reforestation is a must and must be part of students curriculum,” he added.
Protecting the environment must be part of the curriculum from elementary to college. Educate the people on proper waste disposal, and prioritize the relocation of informal settlers, Santos urged.
Thursday, October 8, 2009
Greenfield, BPI tie up for Laguna development project
Written by Miguel R. Camus / Reporter
http://businessmirror.com.ph
Sunday, 04 October 2009 19:56
REAL estate company Greenfield Development Corp. and Ayala-led Bank of the Philippine Islands (BPI) have teamed up to develop a house-and-lot project in Laguna aimed at attracting upper middle-class buyers.
In a recent interview, Greenfield chairman Jeffrey Campos said the joint-venture project involves the development of a 17-hectare property in the Santa Rosa. Under the terms of the deal, Greenfield will develop the BPI-owned property.
“I am very proud to say that it is the first joint venture project that BPI ever had with a land developer to do their property outside the Ayala group,” said Campos.
He said the project will be a “purely horizontal” development. He added that construction is expected to start in 2010 as the project is still in the planning stage.
Campos said lot sizes will average 150 square meters with provisions for two cars. No project cost was given.
Meanwhile, the development, which is still unnamed at this point, will also benefit from the nearby outlet mall Paseo Commercial Center, which Greenfield built in 1998.
While the housing development is Greenfield’s first project with BPI, the developer also has other projects with Ayala Group-affiliated companies.
Earlier, the company, in partnership with Ayala Land Inc. (ALI), launched the 600-hectare project in Maunong now known as Ayala Greenfield Estates. In 2005, it again partnered with ALI for the Ayala Greenfield Golf and Leisure Club inside Ayala Greenfield Estates.
Other residential developments of the Greenfield include the Hillsborough Subdivision Muntinlupa City, Southwood Residences in Carmona, Lexington Garden Village in Pasig City, San Antonio Heights and San Rafael Estates in Santo Tomas, Batangas, Soho Central Condominium in partnership with Century Properties and Meridien Group and Pramana Residential Park. The firm also developed the 65-hectare Greenfield Auto Park Santa Rosa, Laguna. The auto park has been designated as a special economic zone which enjoys incentives from Philippine Economic Zone Authority. Also developed by Greenfield is the 11-hectare Santa Rosa Business Park.
http://businessmirror.com.ph
Sunday, 04 October 2009 19:56
REAL estate company Greenfield Development Corp. and Ayala-led Bank of the Philippine Islands (BPI) have teamed up to develop a house-and-lot project in Laguna aimed at attracting upper middle-class buyers.
In a recent interview, Greenfield chairman Jeffrey Campos said the joint-venture project involves the development of a 17-hectare property in the Santa Rosa. Under the terms of the deal, Greenfield will develop the BPI-owned property.
“I am very proud to say that it is the first joint venture project that BPI ever had with a land developer to do their property outside the Ayala group,” said Campos.
He said the project will be a “purely horizontal” development. He added that construction is expected to start in 2010 as the project is still in the planning stage.
Campos said lot sizes will average 150 square meters with provisions for two cars. No project cost was given.
Meanwhile, the development, which is still unnamed at this point, will also benefit from the nearby outlet mall Paseo Commercial Center, which Greenfield built in 1998.
While the housing development is Greenfield’s first project with BPI, the developer also has other projects with Ayala Group-affiliated companies.
Earlier, the company, in partnership with Ayala Land Inc. (ALI), launched the 600-hectare project in Maunong now known as Ayala Greenfield Estates. In 2005, it again partnered with ALI for the Ayala Greenfield Golf and Leisure Club inside Ayala Greenfield Estates.
Other residential developments of the Greenfield include the Hillsborough Subdivision Muntinlupa City, Southwood Residences in Carmona, Lexington Garden Village in Pasig City, San Antonio Heights and San Rafael Estates in Santo Tomas, Batangas, Soho Central Condominium in partnership with Century Properties and Meridien Group and Pramana Residential Park. The firm also developed the 65-hectare Greenfield Auto Park Santa Rosa, Laguna. The auto park has been designated as a special economic zone which enjoys incentives from Philippine Economic Zone Authority. Also developed by Greenfield is the 11-hectare Santa Rosa Business Park.
Property firms vie for P13B FTI complex
Ayala Land, Robinsons among prospective bidders
By Ronnel Domingo
Philippine Daily Inquirer
Posted date: October 05, 2009
MANILA, Philippines - Real estate giants Ayala Land Inc. and Gokongwei (Robinsons) groups are vying for a P13-billion chunk of the Food Terminal Inc. (FTI) complex in Taguig City, which the government is auctioning this week.
Finance Undersecretary Crisanta S. Legaspi said the two groups were among the “big-ticket players” expected to submit bids on Oct. 8.
Legaspi said four companies, including the two big developers, have secured bidding documents.
She did not name the other two, but added that Century Properties has also expressed interest in the FTI land although the company was not among the four that were expected to bid.
“There will be no prequalification for the bidding since only the bid prices would be the basis of the choice for the winning bidder,” Legaspi explained.
“The transaction would be in cash payment and is expected to be completed within the year,” she said, indicating that the government intends to collect the proceeds before the year closes.
The sale of the FTI property is part of the government’s 2009 privatization program aimed at funding a budget deficit, which as of the latest plan would hit P250 billion. However, a spate of natural calamities, including that wrought by tropical storm “Ondoy,” is expected to further bloat the deficit by another P10 billion.
The FTI plan involves the sale of 103 hectares of the 120-hectare complex, valued at about P13,000 a square meter.
Of the 103 hectares, an area covering 24 hectares has been declared a special economic zone and is subject of long-term contracts between the Philippine Economic Zone Authority and locator firms, which Legaspi said would be honored even after privatization.
About 80 hectares of the FTI complex are free for development, while the 17-hectare parcel not covered by privatization is owned by the National Food Authority.
The sale of the FTI property will account for close to half of the government’s target revenue of P30 billion from privatization this year.
The sale of the government’s 40-percent stake in PNOC Exploration Corp. accounted for another big chunk of expected privation proceeds in 2009, which financial officials so far place at P11 billion.
Another item scheduled for auction is the lease of the Philippines’ property in the Fujimi district of Tokyo, which the country acquired as part of Japan’s reparations to the Philippines for damage inflicted during World War II.
The DOF plans to auction a 50-year lease of the 4,361.85-square meter property, which is expected to raise P3 billion.
By Ronnel Domingo
Philippine Daily Inquirer
Posted date: October 05, 2009
MANILA, Philippines - Real estate giants Ayala Land Inc. and Gokongwei (Robinsons) groups are vying for a P13-billion chunk of the Food Terminal Inc. (FTI) complex in Taguig City, which the government is auctioning this week.
Finance Undersecretary Crisanta S. Legaspi said the two groups were among the “big-ticket players” expected to submit bids on Oct. 8.
Legaspi said four companies, including the two big developers, have secured bidding documents.
She did not name the other two, but added that Century Properties has also expressed interest in the FTI land although the company was not among the four that were expected to bid.
“There will be no prequalification for the bidding since only the bid prices would be the basis of the choice for the winning bidder,” Legaspi explained.
“The transaction would be in cash payment and is expected to be completed within the year,” she said, indicating that the government intends to collect the proceeds before the year closes.
The sale of the FTI property is part of the government’s 2009 privatization program aimed at funding a budget deficit, which as of the latest plan would hit P250 billion. However, a spate of natural calamities, including that wrought by tropical storm “Ondoy,” is expected to further bloat the deficit by another P10 billion.
The FTI plan involves the sale of 103 hectares of the 120-hectare complex, valued at about P13,000 a square meter.
Of the 103 hectares, an area covering 24 hectares has been declared a special economic zone and is subject of long-term contracts between the Philippine Economic Zone Authority and locator firms, which Legaspi said would be honored even after privatization.
About 80 hectares of the FTI complex are free for development, while the 17-hectare parcel not covered by privatization is owned by the National Food Authority.
The sale of the FTI property will account for close to half of the government’s target revenue of P30 billion from privatization this year.
The sale of the government’s 40-percent stake in PNOC Exploration Corp. accounted for another big chunk of expected privation proceeds in 2009, which financial officials so far place at P11 billion.
Another item scheduled for auction is the lease of the Philippines’ property in the Fujimi district of Tokyo, which the country acquired as part of Japan’s reparations to the Philippines for damage inflicted during World War II.
The DOF plans to auction a 50-year lease of the 4,361.85-square meter property, which is expected to raise P3 billion.
Market players gear up for REIT, await signing into law
Written by Dennis Estopace & Miguel Camus / Reporters
Wednesday, 30 September 2009 21:10
http://businessmirror.com.ph
NEARLY three years after introducing a new investment option, players in the equities and property markets are positioning for the enactment of a Real Estate Investment Trusts (REIT) law very soon.
“When the REIT law is launched, the Philippines will joint the global market in the REIT industry,” said Philippine Stock Exchange (PSE) president Francis Lim in a press conference yesterday. “And with the property companies throwing in their crown jewels, we will be starting on the right track.”
The new measure will allow companies to list their income producing property assets, such as a mall or even highways, on the stock exchange. This provides an alternative method for a firm to raise capital.
Likewise, Investors can buy shares in these REIT companies, thereby allowing an alternative form of investment. Lim said there must be at least 1,000 shareholders in the REIT company who hold 50 shares each.
Meanwhile, large developers are keen on the REIT and its implications.
In an interview yesterday SM Prime Holdings Inc. executive vice-president Jeffrey C. Lim signaled there is interest from SM Prime to explore this option.
“It’s another form of capital raising. This will allow us to [accelerate expansion] or to look at new business opportunities. We will also have more capital so we can trim debt,” noted Lim.
For his part, Robinsons Land Corp. president Frederick Go said: “The development of REIT is a very interesting development for the Philippine real estate market and it is something that we have to look at.”
Under the current rules, a REIT company will be in the form of a corporation that is mandated to distribute at least 90 percent of net income as dividends to shareholders while the corporate tax of 30 percent will be imposed on remainder of the net income.
Ayala Land Inc.(ALI) chief financial officer Jaime E. Ysmael also welcomed REIT calling it a “good” piece of legislation.
He noted however that nothing is definite as participation will depend on the final rules governing the law. “We will have to wait until detailed rules are clear but it is a good piece of legislation that will benefit the whole industry,” he said.
Meanwhile, PSE’s Lim said: “All the major issues we brought up were addressed in the final version of the bill.”
He expected the Lower House to ratify the bill on Wednesday. “After that, our real work begins.”
Lim added he’s optimistic the law would have implementing rules and regulation within 90 days upon signing.
“Unlike other laws, there’s a provision [in the proposed REIT law] that gives government agencies involved at most 90 days to clarify both the tasks and the regulatory aspects.”
Ysmael is president of the Asian Public Real Estate Association (Aprea) Institute, which launched the certificate program on Tuesday, the day the Senate approved a bicameral version of the REIT bill, according to PSE’s Lim.
The PSE, Aprea, SM Prime, ALI and two other companies broached three years ago the establishment of REIT in the Philippines. The two other firms that supported the entry of REITs in 2006 and the launch of the certification course program are Citigroup and First Metro Investment Corp.
According to the bill, REITs are listed stock corporations that will provide small and large investors with options to participate directly in the ownership, financing and management of large-scale real-estate projects at affordable rates of investment.
“There is a need to raise the level of skills in the finance and investment aspect of the real-estate industry, especially with the onset of REITs in the country,” Ysmael said during the launch.
Ysmael said the Aprea certification course program would arm the practitioners with the acumen required as REITs evolve into reality.
Wednesday, 30 September 2009 21:10
http://businessmirror.com.ph
NEARLY three years after introducing a new investment option, players in the equities and property markets are positioning for the enactment of a Real Estate Investment Trusts (REIT) law very soon.
“When the REIT law is launched, the Philippines will joint the global market in the REIT industry,” said Philippine Stock Exchange (PSE) president Francis Lim in a press conference yesterday. “And with the property companies throwing in their crown jewels, we will be starting on the right track.”
The new measure will allow companies to list their income producing property assets, such as a mall or even highways, on the stock exchange. This provides an alternative method for a firm to raise capital.
Likewise, Investors can buy shares in these REIT companies, thereby allowing an alternative form of investment. Lim said there must be at least 1,000 shareholders in the REIT company who hold 50 shares each.
Meanwhile, large developers are keen on the REIT and its implications.
In an interview yesterday SM Prime Holdings Inc. executive vice-president Jeffrey C. Lim signaled there is interest from SM Prime to explore this option.
“It’s another form of capital raising. This will allow us to [accelerate expansion] or to look at new business opportunities. We will also have more capital so we can trim debt,” noted Lim.
For his part, Robinsons Land Corp. president Frederick Go said: “The development of REIT is a very interesting development for the Philippine real estate market and it is something that we have to look at.”
Under the current rules, a REIT company will be in the form of a corporation that is mandated to distribute at least 90 percent of net income as dividends to shareholders while the corporate tax of 30 percent will be imposed on remainder of the net income.
Ayala Land Inc.(ALI) chief financial officer Jaime E. Ysmael also welcomed REIT calling it a “good” piece of legislation.
He noted however that nothing is definite as participation will depend on the final rules governing the law. “We will have to wait until detailed rules are clear but it is a good piece of legislation that will benefit the whole industry,” he said.
Meanwhile, PSE’s Lim said: “All the major issues we brought up were addressed in the final version of the bill.”
He expected the Lower House to ratify the bill on Wednesday. “After that, our real work begins.”
Lim added he’s optimistic the law would have implementing rules and regulation within 90 days upon signing.
“Unlike other laws, there’s a provision [in the proposed REIT law] that gives government agencies involved at most 90 days to clarify both the tasks and the regulatory aspects.”
Ysmael is president of the Asian Public Real Estate Association (Aprea) Institute, which launched the certificate program on Tuesday, the day the Senate approved a bicameral version of the REIT bill, according to PSE’s Lim.
The PSE, Aprea, SM Prime, ALI and two other companies broached three years ago the establishment of REIT in the Philippines. The two other firms that supported the entry of REITs in 2006 and the launch of the certification course program are Citigroup and First Metro Investment Corp.
According to the bill, REITs are listed stock corporations that will provide small and large investors with options to participate directly in the ownership, financing and management of large-scale real-estate projects at affordable rates of investment.
“There is a need to raise the level of skills in the finance and investment aspect of the real-estate industry, especially with the onset of REITs in the country,” Ysmael said during the launch.
Ysmael said the Aprea certification course program would arm the practitioners with the acumen required as REITs evolve into reality.
Friday, October 2, 2009
‘A lot of interest’ in REIT seen to boost markets as bicameral panel version is ratified
By Butch Fernandez | Reporter
http://businessmirror.com.ph
Wednesday, 30 September 2009 19:33
WITH the Senate unanimously ratifying on Tuesday a bicameral committee report endorsing the final version of the Real Estate Investment Trust (REIT) bill, stock exchange officials expect a flood of investments in realty assets, which they hope in turn would deepen the domestic capital market.
Philippine Stock Exchange (PSE) President Francis Lim confirmed there is “a lot of interest in REIT by the property sector” whose major players are just waiting for the law to take effect “so they can act accordingly.”
In a brief interview, Lim described the REIT as “a landmark legislation for the Philippine stock market because we are about to see the day where there are more listed companies and there will be more liquidity to our stock market in terms of REIT shares being traded through the stock exchange.”
More than that, Lim added, “we hope to see that by this law, our real- estate industry will blossom to its full potential while at the same time enabling public, small investors to participate not only in the ownership but also in the income of real estate in the Philippines.”
The PSE president admitted that at present “real estate here in the Philippines is owned by only a very few groups of people and one of the things and vision of this law is to disperse ownership of this very valuable pieces of properties.”
As approved by the Senate and the House, a REIT is a stock corporation that can invest in income-producing realty assets like condominiums, office buildings, warehouses, and the like. It allows the direct returns of real estate in a securitized form by providing a structure for real-estate investments similar to how mutual funds manage stock investments.
“REIT will not only allow the country to participate in the globalization of the real-estate investment markets but it will also contribute to the growth and development of the capital market and the country through increased investment activities,” said Sen. Edgardo Angara, its principal author. He added that the creation of a Philippine REIT industry will help the Philippines “sustain economic growth through the development of the capital market.”
The consolidated REIT bill will shortly be submitted by the Senate and the House to Malacañang for signing into law to pave the way for the creation of the legal and regulatory framework governing real-estate investment trusts in the Philippines.
Lim said that as soon as the measure is enacted, the implementing rules and regulations will be issued by the Securities and Exchange Commission, and the tax features will be crafted by the Department of Finance and the Bureau of Internal Revenue within 90 days.
In a separate interview, Angara explained that the REITs would level the playing field for real-estate players by allowing small and large investors alike to participate directly in the ownership and financing of large-scale real-estate projects at affordable rates of investment, without the disadvantages of illiquidity, high transaction and management costs, as compared to traditional private real-estate ownership.
“In this sense, it will democratize wealth by broadening ownership of real estate in the Philippines,” Angara said, adding that “it will also provide added revenues to the national government through income taxes, value-added taxes, stock-transaction taxes and DST that will be generated by the REITs industry.
“It will create a ripple effect in the economy in terms of increase in employment, foreign and local participation in the stock market, real estate transactions, construction, increased consumer spending and development of the capital market, in general,” he told reporters.
The law requires a REIT to be publicly listed to enable the investing public to partly own the company and share in the income of the company. There must be at least 1,000 public shareholders who, in the aggregate, own at least 30 percent of the company. The company must distribute yearly at least 90 percent of its distributable income to all its shareholders. Public shareholders are persons totally unrelated to the sponsor/promoter of the REIT, which is defined as a person who contributes property or cash to establish the REIT. The minimum paid-up capital for a REIT is P300 million.
To encourage the establishment of REITs, the law provides tax incentives to the REIT and its shareholders. The 30-percent income tax rate will be based on the REIT’s net taxable income after deducting the 90-percent dividend distribution to its shareholders. Under current law, the 30-percent tax rate is imposed on the net taxable income before dividend distribution.
Transfers of property to the REIT shall be subject to 50 percent of the applicable documentary stamp tax, registration and annotation fees. Sale of shares of the REIT through the stock exchange shall be exempt from the documentary stamp tax (DST) and the stock transaction tax of one-half of 1 percent instead of the higher rate of capital gain tax.
The REIT shall be exempt from the initial public offering (IPO) tax when it offers its shares to the public through a local stock exchange. The IPO tax is seen to be a big deterrent to private companies to raise funds from the public through an offering of their shares. The Philippines imposes an IPO tax. Consequently, the Philippines has very few listed companies compared with other countries in Asia, despite the fact that our stock market is one of the oldest in the region.
Dividends paid by the REIT to a domestic corporation, resident foreign corporation and OFWs shall be exempt from the 10-percent dividend tax. In case of overseas Filipino workers (OFWs), the exemption shall be good for seven years from the effectivity of the tax regulations implementing the law.
http://businessmirror.com.ph
Wednesday, 30 September 2009 19:33
WITH the Senate unanimously ratifying on Tuesday a bicameral committee report endorsing the final version of the Real Estate Investment Trust (REIT) bill, stock exchange officials expect a flood of investments in realty assets, which they hope in turn would deepen the domestic capital market.
Philippine Stock Exchange (PSE) President Francis Lim confirmed there is “a lot of interest in REIT by the property sector” whose major players are just waiting for the law to take effect “so they can act accordingly.”
In a brief interview, Lim described the REIT as “a landmark legislation for the Philippine stock market because we are about to see the day where there are more listed companies and there will be more liquidity to our stock market in terms of REIT shares being traded through the stock exchange.”
More than that, Lim added, “we hope to see that by this law, our real- estate industry will blossom to its full potential while at the same time enabling public, small investors to participate not only in the ownership but also in the income of real estate in the Philippines.”
The PSE president admitted that at present “real estate here in the Philippines is owned by only a very few groups of people and one of the things and vision of this law is to disperse ownership of this very valuable pieces of properties.”
As approved by the Senate and the House, a REIT is a stock corporation that can invest in income-producing realty assets like condominiums, office buildings, warehouses, and the like. It allows the direct returns of real estate in a securitized form by providing a structure for real-estate investments similar to how mutual funds manage stock investments.
“REIT will not only allow the country to participate in the globalization of the real-estate investment markets but it will also contribute to the growth and development of the capital market and the country through increased investment activities,” said Sen. Edgardo Angara, its principal author. He added that the creation of a Philippine REIT industry will help the Philippines “sustain economic growth through the development of the capital market.”
The consolidated REIT bill will shortly be submitted by the Senate and the House to Malacañang for signing into law to pave the way for the creation of the legal and regulatory framework governing real-estate investment trusts in the Philippines.
Lim said that as soon as the measure is enacted, the implementing rules and regulations will be issued by the Securities and Exchange Commission, and the tax features will be crafted by the Department of Finance and the Bureau of Internal Revenue within 90 days.
In a separate interview, Angara explained that the REITs would level the playing field for real-estate players by allowing small and large investors alike to participate directly in the ownership and financing of large-scale real-estate projects at affordable rates of investment, without the disadvantages of illiquidity, high transaction and management costs, as compared to traditional private real-estate ownership.
“In this sense, it will democratize wealth by broadening ownership of real estate in the Philippines,” Angara said, adding that “it will also provide added revenues to the national government through income taxes, value-added taxes, stock-transaction taxes and DST that will be generated by the REITs industry.
“It will create a ripple effect in the economy in terms of increase in employment, foreign and local participation in the stock market, real estate transactions, construction, increased consumer spending and development of the capital market, in general,” he told reporters.
The law requires a REIT to be publicly listed to enable the investing public to partly own the company and share in the income of the company. There must be at least 1,000 public shareholders who, in the aggregate, own at least 30 percent of the company. The company must distribute yearly at least 90 percent of its distributable income to all its shareholders. Public shareholders are persons totally unrelated to the sponsor/promoter of the REIT, which is defined as a person who contributes property or cash to establish the REIT. The minimum paid-up capital for a REIT is P300 million.
To encourage the establishment of REITs, the law provides tax incentives to the REIT and its shareholders. The 30-percent income tax rate will be based on the REIT’s net taxable income after deducting the 90-percent dividend distribution to its shareholders. Under current law, the 30-percent tax rate is imposed on the net taxable income before dividend distribution.
Transfers of property to the REIT shall be subject to 50 percent of the applicable documentary stamp tax, registration and annotation fees. Sale of shares of the REIT through the stock exchange shall be exempt from the documentary stamp tax (DST) and the stock transaction tax of one-half of 1 percent instead of the higher rate of capital gain tax.
The REIT shall be exempt from the initial public offering (IPO) tax when it offers its shares to the public through a local stock exchange. The IPO tax is seen to be a big deterrent to private companies to raise funds from the public through an offering of their shares. The Philippines imposes an IPO tax. Consequently, the Philippines has very few listed companies compared with other countries in Asia, despite the fact that our stock market is one of the oldest in the region.
Dividends paid by the REIT to a domestic corporation, resident foreign corporation and OFWs shall be exempt from the 10-percent dividend tax. In case of overseas Filipino workers (OFWs), the exemption shall be good for seven years from the effectivity of the tax regulations implementing the law.
Philippines' Ayala Land to venture into economic housing dev't
http://www.tradingmarkets.com
Thursday, October 01, 2009; Posted: 02:52 AM
MANILA, Oct 01, 2009 (AsiaPulse via COMTEX) -- Ayala Land Inc. (PSE:ALI), the property arm of conglomerate Ayala Corp., will develop a 20-hectare lot near the Sta. Rosa, Laguna-Tagaytay area with an estimated development cost of P2 billion (US$42.2 million).
This was revealed by Jaime Ysmael, senior vice-president and chief finance officer of the Ayala Land Inc., to reporters at the launch of the Certificate of Real Estate Investment Finance (CREIF) program.
He said the new development would start in the first half of next year.
Ysmael said their participation into the economic housing category is largely due to the huge demand for this market segment.
"This is the kind of development that would address the needs of the 34 per cent of the Filipino households," Ysmael said.
ALIs kind of development has been mostly catering the lower, middle and upper class. But it has not participated in the economy segment of the housing sector.
According to Ysmael, this new development would offer row houses or single attached units between 40 to 60 square meters each with a price range of P600,000 to P1.5 million.
The targeted market are those households with combined earnings of between P15,000 to P50,000 a month.
Buyers can also avail of the Pag-ibig financing aside from bank financing.
Ysmael said only 10 per cent of their buyers pay in cash, 30 per cent through bank financing and the rest are in-house financing.
Most of the ALI developments are located in the southern part of Metro Manila, although Ysmael said they are also looking at a new area in the north.
Thursday, October 01, 2009; Posted: 02:52 AM
MANILA, Oct 01, 2009 (AsiaPulse via COMTEX) -- Ayala Land Inc. (PSE:ALI), the property arm of conglomerate Ayala Corp., will develop a 20-hectare lot near the Sta. Rosa, Laguna-Tagaytay area with an estimated development cost of P2 billion (US$42.2 million).
This was revealed by Jaime Ysmael, senior vice-president and chief finance officer of the Ayala Land Inc., to reporters at the launch of the Certificate of Real Estate Investment Finance (CREIF) program.
He said the new development would start in the first half of next year.
Ysmael said their participation into the economic housing category is largely due to the huge demand for this market segment.
"This is the kind of development that would address the needs of the 34 per cent of the Filipino households," Ysmael said.
ALIs kind of development has been mostly catering the lower, middle and upper class. But it has not participated in the economy segment of the housing sector.
According to Ysmael, this new development would offer row houses or single attached units between 40 to 60 square meters each with a price range of P600,000 to P1.5 million.
The targeted market are those households with combined earnings of between P15,000 to P50,000 a month.
Buyers can also avail of the Pag-ibig financing aside from bank financing.
Ysmael said only 10 per cent of their buyers pay in cash, 30 per cent through bank financing and the rest are in-house financing.
Most of the ALI developments are located in the southern part of Metro Manila, although Ysmael said they are also looking at a new area in the north.
Not an act of God but a sin...
By Alcuin Papa
Philippine Daily Inquirer
First Posted 03:19:00 10/02/2009
MANILA, Philippines — The flood disaster that struck Metro Manila over the weekend was not an act of God but a sin of omission by government and private real estate developers, according to urban planner Felino “Jun” Palafox.
The green architect said that a land use plan that took floods into consideration was drawn up as far back as 1977, titled “Metro Manila Transport, Land Use and Development Planning Project,” sponsored by the World Bank.
Palafox said that the study had already noted the possibility of heavy flooding in at least three sites of urban growth in the Philippine capital—the Marikina Valley and its northern and southern parts.
“When I saw the damage caused by the floods recently, I realized that these were the same areas that had already been identified,” he told the Inquirer.
“Urban development is spreading into areas which are, in their present state, unsuitable for development—either because they are low-lying and liable to flooding, or because development is without adequate facilities for the treatment and disposal of sewage (the norm in Manila) and so will continue to contribute to the severe pollution of areas such as Laguna de Bay,” the study said.
But what did government do to mitigate the flooding and other problems identified by the 1977 study?
Nothing, according to Palafox.
Need for spillway
“This is not an act of God, as what people have already said. This is a sin of omission on the part of government and leadership. Practically all the measures outlined in the study could have addressed the flooding we are seeing these days,” he said.
For one, there was little infrastructure to prevent flooding. Palafox cited the need to construct a spillway in Parañaque to drain excess water from Laguna Lake to Manila Bay.
“The Manggahan floodway was constructed to drain floodwater from the mountains flowing through the Marikina River into the Laguna Lake. But what happens when the Laguna Lake is overflowing? That is why there was a need for the Parañaque spillway to direct excess water from the lake into the Manila Bay,” he said.
But he said the government never constructed the spillway. “I don’t know why,” said Palafox, who earned a degree on urban planning from Harvard. “But you don’t need an engineer to understand this.”
Palafox also said that the study proposed desilting the Pasig and Marikina Rivers to accommodate more water. “What should have been done was to use the silt and mud collected from the river to construct ‘green islands’ just like in Holland.”
The green islands should have been constructed at the mouths of the rivers and could be used for “recreational purposes” like parks, arboretums and sports arenas. “You let these islands settle, say after 15 years. Then you can use them for industrial purposes like oil depots.”
Erase parts of capital
If he were to redesign Metro Manila, Palafox said he would take a “big eraser” and wipe out parts of Metro Manila in the east, north and south, where development did not conform to standards, particularly the construction of housing below the flood lines.
“Government knows what the flood lines are. Why did developers of subdivisions allow construction of housing projects below the flood lines?” he asked.
Palafox said corruption might have come into play because it would take the approval of 32 agencies to sign papers for land development and 12 agencies just to do one building.
He recalled that he did some development in the portion of the Nile near Khartoum in Sudan where the construction was done well above the flood lines.
Also, there is a chronic lack of foresight in the land development with developers looking only beyond 25 years of flood history.
“The international standard is to look at the flood history of the past 500 years, like the Khartoum project,” he said.
If he had his way, Palafox said he would have planned out Metro Manila according to plans by American architect Daniel Burnham in 1905.
According to Palafox, Burnham envisioned a Manila designed the same way as Paris, built near the Seine River, and Venice with its waterways.
“In Venice, you work on the first floor and live on the second floor,” he said.
Other recommendations in the plan included the construction of catch basins under buildings that could collect rainwater for recycling or for flowing into rivers.
Also, Palafox recommended the building of houses on stilts to go above the flood lines, just like the Badjaos.
In addition to the lack of foresight, there was also a chronic oversight by government over the years on the issue of garbage and illegal logging.
“The pressures for development in areas unsuitable for development exist and will continue to exist, and without action, high and unnecessary environmental, social and economic costs will be incurred,” the study said.
Philippine Daily Inquirer
First Posted 03:19:00 10/02/2009
MANILA, Philippines — The flood disaster that struck Metro Manila over the weekend was not an act of God but a sin of omission by government and private real estate developers, according to urban planner Felino “Jun” Palafox.
The green architect said that a land use plan that took floods into consideration was drawn up as far back as 1977, titled “Metro Manila Transport, Land Use and Development Planning Project,” sponsored by the World Bank.
Palafox said that the study had already noted the possibility of heavy flooding in at least three sites of urban growth in the Philippine capital—the Marikina Valley and its northern and southern parts.
“When I saw the damage caused by the floods recently, I realized that these were the same areas that had already been identified,” he told the Inquirer.
“Urban development is spreading into areas which are, in their present state, unsuitable for development—either because they are low-lying and liable to flooding, or because development is without adequate facilities for the treatment and disposal of sewage (the norm in Manila) and so will continue to contribute to the severe pollution of areas such as Laguna de Bay,” the study said.
But what did government do to mitigate the flooding and other problems identified by the 1977 study?
Nothing, according to Palafox.
Need for spillway
“This is not an act of God, as what people have already said. This is a sin of omission on the part of government and leadership. Practically all the measures outlined in the study could have addressed the flooding we are seeing these days,” he said.
For one, there was little infrastructure to prevent flooding. Palafox cited the need to construct a spillway in Parañaque to drain excess water from Laguna Lake to Manila Bay.
“The Manggahan floodway was constructed to drain floodwater from the mountains flowing through the Marikina River into the Laguna Lake. But what happens when the Laguna Lake is overflowing? That is why there was a need for the Parañaque spillway to direct excess water from the lake into the Manila Bay,” he said.
But he said the government never constructed the spillway. “I don’t know why,” said Palafox, who earned a degree on urban planning from Harvard. “But you don’t need an engineer to understand this.”
Palafox also said that the study proposed desilting the Pasig and Marikina Rivers to accommodate more water. “What should have been done was to use the silt and mud collected from the river to construct ‘green islands’ just like in Holland.”
The green islands should have been constructed at the mouths of the rivers and could be used for “recreational purposes” like parks, arboretums and sports arenas. “You let these islands settle, say after 15 years. Then you can use them for industrial purposes like oil depots.”
Erase parts of capital
If he were to redesign Metro Manila, Palafox said he would take a “big eraser” and wipe out parts of Metro Manila in the east, north and south, where development did not conform to standards, particularly the construction of housing below the flood lines.
“Government knows what the flood lines are. Why did developers of subdivisions allow construction of housing projects below the flood lines?” he asked.
Palafox said corruption might have come into play because it would take the approval of 32 agencies to sign papers for land development and 12 agencies just to do one building.
He recalled that he did some development in the portion of the Nile near Khartoum in Sudan where the construction was done well above the flood lines.
Also, there is a chronic lack of foresight in the land development with developers looking only beyond 25 years of flood history.
“The international standard is to look at the flood history of the past 500 years, like the Khartoum project,” he said.
If he had his way, Palafox said he would have planned out Metro Manila according to plans by American architect Daniel Burnham in 1905.
According to Palafox, Burnham envisioned a Manila designed the same way as Paris, built near the Seine River, and Venice with its waterways.
“In Venice, you work on the first floor and live on the second floor,” he said.
Other recommendations in the plan included the construction of catch basins under buildings that could collect rainwater for recycling or for flowing into rivers.
Also, Palafox recommended the building of houses on stilts to go above the flood lines, just like the Badjaos.
In addition to the lack of foresight, there was also a chronic oversight by government over the years on the issue of garbage and illegal logging.
“The pressures for development in areas unsuitable for development exist and will continue to exist, and without action, high and unnecessary environmental, social and economic costs will be incurred,” the study said.
Thursday, October 1, 2009
Property firms seen to suffer rout after ‘Ondoy’
By Chino S. Leyco, Reporter
The Manila Times
Wednesday, 30 September 2009
AFTER signs of recovery in recent months, the local property sector may suffer a rout in the wake of the record flooding unleashed by Typhoon Ondoy. Prince Christian Cruz, Global Property senior economist, said the industry would suffer the most from the devastation caused by Ondoy. While it is hard to estimate the financial impact of Ondoy on the local property sector after it struck Metro Manila and a large part of Luzon, Cruz said there will be a definite “wait-and-see attitude” in the minds of potential buyers after seeing the devastation that Ondoy wrought on cities already congested by several property developments.
In the first half, listed companies in the property sector suffered a 3.6-percent contraction in profits, but the Philippine Stock Exchange (PSE) said this was largely due to one-time gains last year. The combined earnings of all listed firms, however, surged 46.3 percent.
“[The flooding] has an impact on the industry because many of our developments right now are concentrated in Marikina or Cainta. Because there’s no more space in the center of Metro Manila, there’s no way than to go in these areas,” Cruz said, referring to areas to the east of the capital.
The value of properties in Pasig, Marikina and Cainta are expected to drop, but Cruz said it is still difficult to say how huge would be the decline.
Ramon Jose Aguirre, Colliers International research manager, said there might be a shift in preference from horizontal to vertical developments in the Marikina, Cainta and Pasig areas.
“It is possible that people would now prefer condominiums than the other developments,” he said.
Aguirre said the hardest hit subdivision in Marikina “would be a hard sell in the next two to three years,” adding that the marketability of that property will now depend on how the government will rebuild the city’s image.
Cruz cited a seller who claims that even if his house was spared from last weekend’s flooding, the value of that property will still drop because of news that Marikina, Cainta and Pasig were the worst hit areas.
Both Cruz and Aguirre agreed the present disaster will have dampen the sales of real-estate companies, especially those with on-going and up coming developments in the flooded areas.
For people who plan to buy houses, Cruz said they should look not only at the property’s accessibility, design and ambiance, but also the drainage system of the development.
“They should now demand that the developer [ascertain the] drainage system of the development, like how much volume of water it can accommodate. This aspect was often set aside before this tragedy happened. All they cared about was the ambiance and the design,” he said.
At the PSE, the property index inched up nearly two percent, but individual issues were broadly flat on Tuesday.
The Manila Times
Wednesday, 30 September 2009
AFTER signs of recovery in recent months, the local property sector may suffer a rout in the wake of the record flooding unleashed by Typhoon Ondoy. Prince Christian Cruz, Global Property senior economist, said the industry would suffer the most from the devastation caused by Ondoy. While it is hard to estimate the financial impact of Ondoy on the local property sector after it struck Metro Manila and a large part of Luzon, Cruz said there will be a definite “wait-and-see attitude” in the minds of potential buyers after seeing the devastation that Ondoy wrought on cities already congested by several property developments.
In the first half, listed companies in the property sector suffered a 3.6-percent contraction in profits, but the Philippine Stock Exchange (PSE) said this was largely due to one-time gains last year. The combined earnings of all listed firms, however, surged 46.3 percent.
“[The flooding] has an impact on the industry because many of our developments right now are concentrated in Marikina or Cainta. Because there’s no more space in the center of Metro Manila, there’s no way than to go in these areas,” Cruz said, referring to areas to the east of the capital.
The value of properties in Pasig, Marikina and Cainta are expected to drop, but Cruz said it is still difficult to say how huge would be the decline.
Ramon Jose Aguirre, Colliers International research manager, said there might be a shift in preference from horizontal to vertical developments in the Marikina, Cainta and Pasig areas.
“It is possible that people would now prefer condominiums than the other developments,” he said.
Aguirre said the hardest hit subdivision in Marikina “would be a hard sell in the next two to three years,” adding that the marketability of that property will now depend on how the government will rebuild the city’s image.
Cruz cited a seller who claims that even if his house was spared from last weekend’s flooding, the value of that property will still drop because of news that Marikina, Cainta and Pasig were the worst hit areas.
Both Cruz and Aguirre agreed the present disaster will have dampen the sales of real-estate companies, especially those with on-going and up coming developments in the flooded areas.
For people who plan to buy houses, Cruz said they should look not only at the property’s accessibility, design and ambiance, but also the drainage system of the development.
“They should now demand that the developer [ascertain the] drainage system of the development, like how much volume of water it can accommodate. This aspect was often set aside before this tragedy happened. All they cared about was the ambiance and the design,” he said.
At the PSE, the property index inched up nearly two percent, but individual issues were broadly flat on Tuesday.
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