Iconic hotels return as tourist arrivals hit 2.9M

The real estate market maintained its growth momentum in the first half of 2025, bolstered in part by a resurgence in tourism and strong demand across the office, industrial, and residential sectors, according to Santos Knight Frank’s latest market report.

Tourism receipts saw a notable boost, supported by the return of iconic hospitality brands, including Sofitel in Cebu and InterContinental in New Clark City. The resurgence of these landmark hotels, along with government-led initiatives such as tourism tax refunds and visa-free entry for key markets, has driven tourist arrivals to 2.9 million in the first half. Luxury hotel rates surged 11 percent, with Taguig commanding the highest average nightly rate at P14,991. High-end developments like Accor-Megaworld’s Mercure and Banyan Tree’s entry in New Clark City further signal confidence in the sector.

Net office absorption hit 192,000 sqm in H1 2025, driven primarily by the BPO sector expanding within Metro Manila. Taguig posted the lowest vacancy rate at 15 percent and the highest average asking rent at P1,248/sqm/month, surpassing the Metro average by 21 percent. A total of 158,000 sqm of new supply entered the market, with over 403,000 sqm more expected by year-end.

Manila was ranked 9th globally in Knight Frank’s Q1 2025 Prime Global Cities Index, with residential prices up 5.5 percent year-on-year. Prime villages like Forbes Park and Dasmariñas posted double-digit price growth, reflecting ongoing demand driven by limited supply.

In the industrial segment, CALABARZON and Central Luzon continue to attract foreign firms in manufacturing, logistics, and pharmaceuticals. Rental rates range from P230 to P290/sqm/month, offering competitive options for multinationals.

The opening of Smith & Wollensky at BGC’s Finance Center highlights the increasing presence of premium global brands, further validating Metro Manila’s growing appeal as a luxury retail and dining hub.

As foreign and local investments continue to flow, the Philippine real estate market demonstrates both resilience and opportunity across sectors — from the return of legacy hotels to the steady rise of industrial parks and luxury developments.

Source: Context

Jobless rate improves to 3.9%

The Philippine labor market improved in May, latest Philippine Statistics Authority (PSA) data showed, with the labor force participation rate rising to its highest in 20 years and both unemployment and underemployment going down.

The jobless rate eased to 3.9 percent from 4.1 percent in April and a year ago, with the count of those without work falling to 2.03 million from 2.06 million and 2.11 million a month and a year earlier.

Underemployment, which counts those wanting additional hours of work, additional job, or a new job with longer hours, slipped to 13.1 percent from 14.6 percent in April.

It was, however, well above the 9.9 percent recorded in May last year.

In terms of magnitude, 6.60 million of the 50.29 million individuals with jobs were classified as underemployed. Of this, 59.2 percent worked fewer than 40 hours a week, the PSA said, while the remaining 40.8 percent were employed for 40 hours or more.

The number of employed persons rose from 48.67 million in April and 48.87 million in May 2024. This brought the employment rate to 96.1 percent, slightly higher than the 95.9 percent recorded in both April this year and May 2024.

The services sector remained the dominant source of employment, accounting for 61.8 percent of all jobs in May. This was followed by agriculture at 21.1 percent and industry at 17.1 percent.

Wholesale and retail trade and the repair of motor vehicles accounted for the largest share of jobs at 19.8 percent, followed by agriculture and forestry at 18.8 percent and construction at 9.5 percent.

The biggest year-on-year gains in employment were seen in wholesale and retail trade, which added 489,000 jobs. This was followed by agriculture and forestry with 469,000, administrative and support service activities with 371,000, accommodation and food services with 365,000, and other service activities with 175,000.

The manufacturing sector suffered the most job losses, shedding 374,000 positions from the previous year. Construction followed with a loss of 298,000 jobs while mining and quarrying, public administration and defense and water supply and waste management also recorded annual declines.

The labor force participation rate (LFPR), meanwhile, climbed to 65.8 percent in May, up from 64.8 percent in the same month last year and 63.7 percent in April 2025. This translates to 52.32 million Filipinos aged 15 years and older who were either employed or actively seeking work — the largest labor force recorded since April 2005.

Socioeconomic Planning Secretary Arsenio Balisacan said this was the highest LFPR since 2005.

“We welcome this development in labor force participation because it indicates a healthy and competitive Philippine labor market,” Balisacan said in a statement.

“Generally, a larger workforce can lead to increased economic output and potentially higher GDP (gross domestic product) growth, as more people contribute to the economy.”

Balisacan said the government’s ongoing push for key infrastructure flagship projects would help close development gaps and attract more investments that can generate jobs.

He also stressed the need to improve how public funds were being used by focusing limited resources on priority areas such as quality education, healthcare, food security and connectivity infrastructure.

Source: Manila Times

Tourism contributes 8.9% to Philippine GDP in 2024

The share of the tourism industry in the Philippine economy rose to a five-year high of 8.9% in 2024, the Philippine Statistics Authority (PSA) said on Thursday.

Tourism direct gross value added (TDGVA) — an indicator of the economic contribution from tourism-related activities — jumped by 11.2% year on year to P2.35 trillion last year, preliminary data from the PSA showed.

However, TDGVA growth was slower than the 49.9% surge logged in 2023 and the slowest annual growth since the 10.3% expansion in 2020.

Despite the slower growth, the share of TDGVA to the economy rose to 8.9% in 2024, the highest share since the 12.9% recorded in 2019.

By industry, country-specific tourism characteristics goods – shopping accounted for 21.8% of the total with P512.68 billion. It was followed by miscellaneous services (20.2% share or P476.23 billion) and accommodation services for visitors (18.4% share or P432.9 billion).

Domestic tourism expenditure, which includes resident visitors’ spending within the country on a domestic trip or as part of an international trip, grew by 16.4% to P3.16 trillion last year.

Outbound tourism spending reached P345.68 billion in 2024, rising by 37.5% from P251.35 billion in 2023.

Inbound tourism expenditure, meanwhile, inched up by 0.4% annually to P699.99 billion.

Total employment in the tourism sector grew by 6.1% to 6.75 million in 2024. Tourism accounted for 13.8% of the total jobs in the country in 2024.

The majority of the tourism-related jobs were centered on miscellaneous activities. The health and wellness sector employed 1.83 million, accounting for a 27.1% share.

The accommodation and food and beverage sector had 1.69 million workers (25% share), while passenger transport had 1.67 million workers (24.7%).

Reinielle Matt M. Erece, an economist at Oikonomiya Advisory and Research, Inc. said easing inflation helped boost tourism spending last year.

“Lower inflation relative to 2023 and better economic conditions in the country may have encouraged tourists due to better prices,” he said.

Inflation averaged 3.2% in 2024, cooling from the 15-year high of 6% in 2023.

Last year, the Department of Tourism recorded 5.95 million visitor arrivals, falling short of its 7.7 million target.

“While Philippine tourism has made substantial progress — particularly in revenue generation — it hasn’t achieved full recovery in terms of visitor numbers, and the pace of recovery appears to be slowing in early 2025,” Leonardo A. Lanzona, Jr., an economics professor in Ateneo de Manila University, said.

Mr. Erece is optimistic that tourist numbers will improve this year.

“The strong domestic economy can also be a positive factor in improving local economies and their respective tourism potential,” he said.

Source: Business World