Rezoning and revitalizing Makati CBD

The Makati central business district (CBD) continues to enjoy its stature as the Philippines’ primary financial district. Major outsourcing, multinational, and large Filipino companies gravitate towards the country’s premier financial hub. This has been compelling national developers to expand in the business district despite the obvious lack of developable land in the business hub.

What’s interesting is that there are proposals to amend the zoning ordinance of Makati CBD. Among the Makati Central Estate Association, Inc.’s (MACEA) proposed changes include increasing the allowable floor area ratios (FAR) for office and retail developments. All lots will now be mixed-use. The new zoning ordinance also establishes the “superblocks” system, and a bonus FAR of 1.5 for lot owners that will incorporate breezeways and civic plazas into their developments.

Meanwhile, the Makati local government, major developers, and other stakeholders should also take into account the viability of expanding retail spaces; the city’s sustainability initiatives — given the popularity of healthy and sustainable workspaces; and the efficiency of mass transit systems (especially now that the construction of Makati subway has stalled) and parking spaces across the business district.

TAKING ADVANTAGE OF MAKATI CBD’S DWINDLING AVAILABLE OFFICE SUPPLY

From 2025 to 2029, Colliers projects the delivery of nearly 2 million square meters of new office space in Metro Manila, with Makati CBD accounting for 15% of the new supply. Among the new office towers likely to be completed during the period are Calistoga Office Building, Mckinley Exchange Corporate Center 2, PHC Buendia, The Gentry Corporate Plaza and the redevelopments of BDO, BPI, Metrobank and Chinabank HQs.

Assuming current market conditions continue, Colliers projects that Makati CBD may shift to a landlord’s market as early as next year, due to limited new supply over the next two years. While several major banks are developing new headquarters in the CBD, most of these are expected to be completed by 2029 onwards. The duration of a potential landlord’s market may be protracted unless a substantial portion of space in these HQs is made available for lease to the market.

With office availability dwindling and many existing buildings aging, redevelopment is becoming increasingly imperative to meet evolving demands. Colliers sees the MACEA’s proposed zoning amendments as a key catalyst in driving the redevelopment of the Makati CBD. These proposed changes include increasing the allowable FAR for office developments in Legazpi and Salcedo Villages, as well as permitting mixed-use developments along major thoroughfares. Colliers recommends incentivizing redevelopment projects — particularly those that integrate sustainability — as a critical step in future-proofing the CBD.

NEW CONDOMINIUMS LIKELY TO REPLACE OLD BUILDINGS

From 2025 to 2029, Colliers expects the completion of 20,700 condominium units in Metro Manila, with Makati CBD likely accounting for 12% of the new supply. Majority of these are luxury projects including Arthaland’s Eluria, Alveo Land’s Parkford Suites, and SMDC and Federal Land’s The Estate. Due to the lack of developable land in Makati CBD, property firms have been redeveloping old and existing properties into new residential projects. For instance, Ayala Land Premier redeveloped the Mandarin Oriental Hotel and LeParc Apartments into Park Central Towers and Park Villas respectively. Meanwhile, the Dela Rosa Carpark 2 will be converted into an ultra-luxury project called Laurean.

The proposed Condominium Redevelopment Act, a measure that was seen to complement new office and retail projects in Makati CBD failed to hurdle the last Congress. The bill is likely to be refiled in the next Congress which starts in July. We see Makati CBD benefiting from the measure’s enactment.

Makati CBD’s residential segment remains a cut above the rest. Its share to total unsold ready-for-occupancy (RFO) condominium units is only less than two percent of total unsold RFO across Metro Manila. Secondary and pre-selling condominium projects within Makati CBD are among the more expensive in the metro, especially those along Ayala Avenue and those located in Legaspi and Salcedo villages.

With the proposed rezoning and new projects in the pipeline, Makati CBD is definitely a hub to watch for in the years to come.

Source: Business World

Inflation edges up to 1.4%

Inflation was slightly higher in June following a deceleration in the past four months, the Philippine Statistics Authority (PSA) reported on Friday, driven by increased utility costs.

Consumer price growth rose to 1.4 percent from May’s 1.3 percent, within the Bangko Sentral ng Pilipinas’ (BSP) 1.1- to 1.9-percent estimate but lower than the 1.5-percent median in a Manila Times poll of economists

Inflation a year earlier was markedly higher at 3.7 percent.

Core inflation, which strips out volatile food and energy prices, was unchanged at 2.2 percent in June from May.

Year to date, headline inflation remained below the BSP’s 2.0- to 4.0-percent target at 1.8 percent, while core inflation hit 2.3 percent.

The PSA said that June’s increase was primarily driven by higher inflation for housing, water, electricity, gas and other fuels, which rose to 3.2 percent from 2.3 percent in May.

A slower year-on-year decrease in the transport index — 1.6 percent from 2.4 percent — also contributed, it added.

The Department of Economy, Planning and Development (DepDev), meanwhile, said government efforts had helped ease food inflation — one of the primary drivers of consumer price growth last year — to 0.1 percent in June from 0.7 percent and 6.5 percent a month and a year earlier.

Rice inflation was a steeper -14.3 percent, in particular, down from -12.8 percent in May.

“The sharp decline in food inflation over the past year underscores the continued progress in our coordinated efforts to boost local production, improve logistics, and implement calibrated trade and biosecurity measures,” DepDev Secretary Arsenio Balisacan said in a statement.

He said the government would continue implementing initiatives to ensure that supplies of commodities remain stable and shield consumers from price pressures.

The Department of Agriculture, in particular, will intensify programs aimed at boosting the hog population, which has been devastated by an African swine fever outbreak.

An onion research center will also be established to focus on developing methods to combat diseases and pests and boost yields, the DepDev said.

The Department of Energy, meanwhile, has partnered with oil companies to provide fuel discounts to drivers of public utility vehicles (PUVs), non-PUVs, and transportation network vehicles as fuel prices have become volatile due to geopolitical tensions.

Nine oil companies were said to have committed to the initiative as of June 30.

“While the continued easing of food inflation is encouraging, we will maintain our vigilance against possible external and domestic risks,” Balisacan said.

“We will remain focused on strengthening interagency coordination in implementing timely, targeted, and evidence-based interventions to safeguard the purchasing power of Filipino households, ensuring that the much-needed support reaches the most vulnerable sectors of the country.”

The latest inflation result will likely allow the BSP to continue lowering key interest rates, currently at 5.25 percent following a 25-basis point cut last month.

The next policy meeting will be in Aug. 28 and the central bank will have the added benefit of July inflation data due to be released by the PSA on Aug. 5.

BSP Governor Eli Remolona Jr. said that two more rate cuts were possibly this year given low inflation and slow economic growth.

During last month’s rate-setting meeting, the BSP’s policymaking Monetary Board slashed its 2025 inflation forecast to 1.6 percent from 2.4 percent.

Those for 2026 and 2027, meanwhile, were slightly raised to 3.4 percent and 3.3 percent, respectively, from 3.3 percent and 3.2 percent.

Source: Manila Times

Filipinos are tightening their belts

Filipino consumers are cutting back on spending and bracing for higher expenses even as most remain optimistic about future income prospects, a TransUnion study showed.  

TransUnion’s Consumer Pulse Study for the second quarter of 2025 showed that consumers were growing more cautious with their finances, with inflation continuing to top their concerns.

“Filipino households are approaching their finances with cautious optimism. While they’re aware of ongoing challenges like inflation and rising costs, many remain hopeful about their financial future,” said Weihan Sun, TransUnion’s research and consulting principal for Asia-Pacific.

“This mindset is reflected in their actions — cutting back on non-essential spending, saving consistently, and staying on top of debt,” Sun added.

While 73 percent of respondents said they expected their incomes to rise over the next 12 months, nearly half (44 percent) admitted they may be unable to fully pay at least one of their current bills or loans.

Inflation — cited by 83 percent of respondents — remained the biggest worry, followed by job security (59 percent) and interest rates (40 percent). The findings were said to have highlighted continued price pressures despite signs of improving income.

TransUnion said that almost half (47 percent) of Filipino consumers reduced discretionary spending on non-essentials such as dining out, travel and entertainment over the past three months. 

A quarter also canceled or scaled back on digital subscriptions and services, while 45 percent boosted contributions to emergency savings and a third accelerated their debt payments — signs of a shift toward financial prudence.

Spending projections for the next three months suggest this trend will continue, with 42 percent planning to trim discretionary expenses further and 43 percent expected to delay or cut back on major purchases.

“These forecasts suggest even if most consumers were optimistic about their financial status, they were nevertheless cautious of economic headwinds (especially inflation) and were adjusting expenditures,” TransUnion said. 

“The data indicates a financially active consumer base moving with the times to balance spending management with selective investment in their financial well-being,” it added.

While more Filipinos now believe they have sufficient access to credit —  44 percent from 38 percent a year ago — concerns about cost and rejection continue to discourage borrowing.

Over half (57 percent) of consumers who considered applying for new credit or refinancing existing loans ultimately abandoned their plans, mainly due to fears of being denied due to income or employment status (30 percent) or the high cost of borrowing (29 percent).

Even so, demand for credit remains steady. Among consumers intending to borrow in the next 12 months, Gen Z (58 percent) and Millennials (52 percent) led the charge, with personal loans, “buy now, pay later” options and new credit cards topping the list of preferred products.

“It is encouraging to see that more Filipinos now consider credit more accessible. However, the fact that over half of potential borrowers still walk away from their credit plans tells us there is still work to be done,” Sun said. 

“Lenders have an opportunity to bridge this gap by offering more inclusive solutions — ones that not only meet practical needs but also build trust and address the emotional barriers that often come with borrowing.”

The report also showed persistent cybersecurity threats and gaps in digital financial literacy. A majority (56 percent) reported being targeted by online fraud schemes in the past three months, primarily via phishing (44 percent) and smishing or SMS scams (40 percent).

While most took protective steps such as changing passwords or checking account activity, 15 percent admitted to doing nothing — with over half citing confusion about what actions to take.

Meanwhile, only 27 percent of consumers check their credit reports monthly, and one in five do not monitor their credit at all. Although the majority (68 percent) still consider credit monitoring important, this marked a dip from 72 percent last year.

Consumer-Pulse-Q2-2025-Report.pdf

Download PDF • 1.01MB

Source: Business World