Crisis of confidence

The construction and real estate industries are major contributors to economic growth. Businessmen say thousands of jobs in these industries are currently as frozen as the assets of controversial contractors and public works officials.

Approvals for collecting payments from government agencies have also become more complicated, with the required signatures tripling or even quadrupling. This time, the businessmen say the red tape is meant not to collect grease money or “facilitation fees,” but to spread culpability or broaden deniability in case a project is deemed to be anomalous by probers.

The real property sector had already taken a hit from the property bubble created by the proliferation – and then the abrupt shutdown – of Philippine offshore gaming operators.  

Now the construction sector and its downstream industries are reportedly being battered. The corruption scandal has spread to substandard, overpriced or non-existent farm-to-market roads, schools and hospitals.

This week, Securities and Exchange Commission Chairman Francis Lim lamented in a speech that the “crisis of confidence” arising from the corruption scandal has wiped out an eye-watering P1.7 trillion in market value from the stock market. Lim described corruption as a “weapon of mass wealth destruction.”

Presidential investment and economics adviser Frederick Go clarified that the P1.7 trillion was based on sensationalized “fake news” posted on social media, although there has been a slide on a much smaller scale in the stock market in recent weeks.

Regardless of the actual amount of market value losses, the scandal is turning the country into Asia’s basket case. Not only because of the staggering extent of the corruption now being uncovered, but also because of perceptions that after all the hue and cry, there will only be token punishments. The big fish will get a slap on the wrist and everything will return to business as usual.

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Surely there are honest, competent folks who are in government not to rob the nation but to serve the people and the greater good. But for now, they are being tainted by too many rotten eggs at all levels of government.

Are we a nation of thieves? We’re seeing the impact of this perception in that incident reported by One News’ Gretchen Ho, whose mother was humiliated when a foreign exchange dealer at the airport in Oslo, Norway, upon seeing the Philippine passport, refused to accept her 300 US dollars for currency conversion for fear that it was dirty money being laundered.

The currency dealer reportedly acted on an advisory that had not yet been updated: the inclusion of the Philippines in the gray list of countries under closer monitoring for money laundering by the Paris-based Financial Action Task Force.

The FATF took the Philippines out of the gray list last February; the European Union did the same only in August. The currency dealer in Norway – a non-EU state that is part of the Schengen visa zone – still had the old FATF alert, according to the Department of Foreign Affairs.

We might yet be returned to the gray list, if the FATF would take a closer look at our election campaign system and consider the ongoing corruption scandal.

Being flagged for dirty money at currency exchanges abroad is just one of the hassles Filipinos go through because of weak governance and development woes.

A nation’s standing in the international community is reflected in the strength of passports. Singaporeans, who hold the world’s strongest passport as per the Henley Passport Index for 2025, can enter 192 out of 227 global travel destinations visa-free; the second-ranked South Koreans, 190, and the third-ranked Japanese, 189.

Filipinos, ranked 74th, are visa-free only in 64 destinations. When applying for a Schengen visa, we must submit not only an originally issued birth certificate, income tax return and certificate of employment, but also bank statements with transaction records covering six to eight months depending on the Schengen Area state issuing the visa.

Those are humiliating requirements that I suspect are meant to ensure that the applicant is no hampaslupa planning to become a TNT living off welfare or refugee applicant status within the Schengen zone. But the stringent requirements can’t prevent all the obscenely wealthy Pinoy money launderers from entering Europe, buying up properties and regularly depositing their loot in Switzerland.

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The robbers in our country would have scoffed at money laundering involving such a miniscule amount; $300 would buy only one Hermes handkerchief. But that Norway incident deserves attention, because the millions of Filipinos working overseas could suffer the same humiliation.

One answer is to show a resolute response to the corruption problem. China has executed several former officials for corruption, with another ex-minister currently on two-year suspended death sentence. South Korea has sent several former presidents to prison for graft.

We abolished capital punishment. But we can present to the world a swift and credible probe, with full transparency, accompanied by structural reforms to rebuild damaged institutions rather than just patch them up like Humpty Dumpty, and of course the speedy prosecution and punishment of the guilty.

It’s unfortunate that the Independent Commission for Infrastructure has steadfastly refused to open even part of its hearings to the public, preferring instead to conduct its probe like the Supreme Court, to which the ICI chair used to belong. The Philippine judiciary is not known for integrity; it warranted special mention even in the US State Department’s latest country assessments for corruption.

The impression is that it’s just business as usual in dribbling justice, with VIPs mollycoddled. So far the ICI has questioned the Discayas, former Senate finance committee chair Grace Poe and former public works chief Mark Villar. What these key players told the ICI is left to conjecture, fueling suspicions of hush-hush arrangements.

It seems the ICI tack is to wear out those demanding open hearings, as cases crawl at the usual glacial pace through the legal mill. In the meantime, toss the Marites mill a bone, such as the request for immigration lookout bulletin orders for the big guns.

ILBOs, which Jesus Crispin Remulla promptly approved in a parting act as justice secretary, won’t stop any of the 33 covered people from leaving the country.

The government will have to do more than this, to reassure Filipinos and the world that genuine change is on the way – soon, and with full transparency, the lack of which was a key factor in dragging the nation into this mess.

Source: Philstar

Approved building permits fall 8.5% in July

Approved building permits declined 8.5% year on year in July as residential construction projects slumped, the Philippine Statistics Authority (PSA) reported.

Preliminary data showed building projects covered by the permits numbered 15, 395 in July from 16,821 a year earlier.

This was a turnaround from the 12.3% growth in July 2024 and the revised 14.9% expansion in June.

For that month, constructions projects covered 3.47 million square meters (sq.m) of floor area, slipping 2.1% year on year from 3.54 million sq.m.

These building projects that received approval were valued at P44.54 billion, 7.5% lower than a year earlier when it reached P48.16 billion.

Permits for residential projects, which accounted for 66% of the total, declined 8.5% to 10,157 in July.

These projects were valued at P19.77 billion, against the P19.74 billion a year earlier.

Single homes made up 79.1% of the residential category with approved permits declining 10.9% to 8,034.

Applications for apartment buildings rose by 2.5% to 1,957 while applications for duplex or quadruplex homes contracted by 3.1% at 155.

On the other hand, nonresidential projects tallied 3,205 approvals in July, decreasing 8.8% from a year earlier.

Nonresidential permits were valued at P19.84 billion, down 16.6% from P23.78 billion a year earlier.

Approved commercial construction permits numbered 2,150, down 11.3%.

Permits for additions — construction that increases the height or area of an existing building — dropped 16% to 429 in July, while alteration and repair permits totaled 1,133, down 15%.

Industrial permits rose 27.4% to 302, while institutional projects fell 12.1% to 582 approvals.

Agricultural projects totaled 89 approvals, down 19.1%, while other nonresidential works reached 82 building permit approvals, down 2.4%.

Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) had the most approved construction projects for that month accounting for 21.8% of the total with 3,350 permits.

This was followed by Central Luzon (17.5% share with 2,697 permits), and Central Visayas (7.9% share with 1,210 permits).

By value, Calabarzon cornered P8.96 billion worth of construction projects, followed by the National Capital Region (P7.82 billion), and Central Luzon (P6.61 billion).

The PSA said construction statistics are compiled from the copies of original application forms of approved building permits as well as from demolition and fencing permits collected monthly by the agency’s field personnel from the offices of local building officials nationwide.

Source: Business World

Luxury hospitality seen as growth niche for Philippine developers

Property consultants said residential oversupply could push more Philippine developers to pursue luxury hospitality projects.

“With over 7,000 islands, it has all the ingredients, but it seems that Philippine hotel developers are conservative,” Bill Barnett, founder and managing director of Thailand-based hospitality consulting group C9 Hotelworks, said in an interview.

Mr. Barnett, who has served as a consultant for various hotel and residential developments across the Asia-Pacific, said many of the Philippines’ hotels and resorts are “family-run, so they tend to look at the industry and do what their friends do.”

“If somebody does one thing, they all do it,” he added.

Mr. Barnett also noted that some hospitality developers tend to be “commodity minded.”

“Meaning, they think more is better. More rooms, more things… You can’t commoditize luxury because somebody else can come in and lower their prices,” he added.

He also noted the oversupply of condominium units in Metro Manila would prompt developers to shift to the luxury segment.

“I think, now with real estate being overbuilt, Philippine developers will have to find a niche,” he said. “The real estate situation in the country triggers more luxury…because of the oversupply.”

For a luxury hospitality development to be attractive, Mr. Barnett said it is important to have easy access to its location.

“You can’t stay there if you can’t get there,” he said. “There should be enough flights which make it attractive, not only for guests, but to transport staff, and even goods and services.”

He also noted that luxury hospitality properties must have a unique selling point, with many travelers seeking localized experiences. Mr. Barnett also cited the importance of unique food & beverage concepts, strong internet connectivity, and exclusivity of location.

Alfred Lay, director for hotels, tourism, and leisure at Leechiu Property Consultants, said there are over 35 luxury hotel projects ongoing in the Philippines, accounting for over 7,500 hotel rooms over the next four years.

“If you include projects which have yet to be announced, then the number climbs to 50 luxury hotels and adding over 10,000 high end room keys,” he said in a Viber message.

However, air access remains a key roadblock in making the Philippines a fully realized luxury destination, Mr. Lay said.

“If you’re a high-spend international traveler, you don’t want connecting flights just to get to your resort — you want to land straight into places like El Nido or Siargao. Where we’ve got international airports near tourist hubs, you’ll notice the luxury hotels follow, such as Mactan, Panglao Island, Boracay,” he added.

Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said luxury hotels are expected to perform well amid high occupancy rates and the entry of foreign hospitality brands into the country.

“Even if foreign arrivals to the Philippines dropped marginally in the first five months of 2025, there’s still a healthy level of occupancy, especially in Metro Manila hotels,” he said via telephone.

In the first half of the year, five-star hotel occupancies remained steady at 67% from the same period in 2024. This comes as foreign arrivals in the Philippines remain below pre-pandemic levels at 2.54 million as of end-May.

However, Colliers noted that the Philippines has a 4% penetration rate of branded hotels, way behind Singapore (45%), Indonesia (10%), and Thailand (8%).

“I think it will take a few more years for the Philippines to be at par with Thailand, Singapore, of course, Indonesia, especially if you look at our recovery rate pre-pandemic,” he said.

Source: Business World