Filipino youth are optimistic for the future

More than four in five Filipino youth have a positive outlook for the next five years, according to a new collaborative study by Vero Advocacy and Kadence International. However, this optimism is tempered by a strong demand for urgent reforms in employment, education, and healthcare.

The study surveyed over 2,700 Gen Z and Millennials across six Southeast Asian countries, including 453 respondents from the Philippines. Vero Advocacy, a government relations arm, and Kadence International, a global market research agency, aim to explore the shared perspectives of these generations, uncovering their aspirations and challenges to help guide governments and the private sector in developing policies and initiatives that address current needs and drive long-term growth.

According to the survey, 43% of Gen Z Filipinos expect a “much better” future, and 42% anticipate a “better” life in the next five years – only slightly higher than the combined optimism rate of Millennial Filipinos, which stands at 84%. Overall, Filipino youth are more optimistic than their peers in Singapore (69%) and Malaysia (77%), with similar levels of hope for the future as young people in Indonesia (89%), Vietnam (89%), and Thailand (87%).

Both Gen Zs and Millennials in the Philippines, however, identified employment opportunities, quality education, and accessible healthcare as their top challenges. Though these issues are prevalent across the surveyed markets, satisfaction rates for these three areas of concern were the lowest among Filipino respondents. Other concerns include environmental protection, affordable housing, and effective taxation and resource management.

Employment opportunities – or the lack thereof – create uncertainty

Many young Filipinos feel uncertain about their professional futures, with 35% of Gen Z and Millennial respondents expressing a dissatisfaction over job security. Indeed, Filipino youth were the least satisfied with job security among the six countries surveyed, with a 29% satisfaction rate that lags far behind the second lowest satisfaction rate of 43% for Malaysia.

It comes as no surprise, then, that 31% of Gen Z Filipinos and 36% of Millennial Filipinos ranked employment opportunities as the top challenge they face, with most citing a lack of jobs as a key issue. For these young generations, securing a stable job is directly tied to achieving a stable life, as it ensures not just the ability to meet daily needs, but also long-term access to healthcare, housing, and further education.

To help address this issue, Filipino youth are calling for job creation programs and better employment services like career counseling and job placement schemes. These can provide students with the mentorship and opportunities they need to succeed in their chosen careers. Many also feel that additional training and education can help bridge the gap between workers and employers, helping young people align their skills with the evolving work landscape and establish sustainable careers.

High education costs education limit opportunities for Filipino youth

As with job security, Filipinos are the least satisfied with the cost of education in the region, with a satisfaction rate of 43% for Gen Z and 38% for Millennials.

Most respondents cited high costs as the main impediment to accessing quality education in the country, as families must contend with not just tuition, but also other school-related expenses like books, notebooks, uniforms, daily allowance, and special projects, school year after school year. The high cost of education is one of the main reasons why many young people forego secondary and tertiary education in the country, which further limits their employment opportunities and prevents them from building stable careers—and, by extension, a stable future.

Aside from cost, 31% of Gen Z and 30% of Millennial Filipinos cite the quality of education as the top challenge faced by the country. Many believe that the government should prioritize investments in educational facilities and technology, as well as enhanced professional development for educators. Gen Z Filipinos were more likely to indicate more support for students with special needs as something they would like to see in the future, while Millennial Filipinos raise the importance of regular review of and updates to school curricula to better prepare students for the future.

Healthcare access remains elusive for Filipino youth

Despite healthcare being a constitutional right, six out of ten Filipinos die without seeing a doctor, according to statistics from the Department of Health. Access to healthcare remains elusive for most Filipinos, with 10% of Filipino Gen Zs and 14% of Filipino Millennials citing it as the top challenge faced by the country.

Similar to employment opportunities and education costs, Philippine satisfaction rates for healthcare are the lowest in the regional survey, with only 36% of Filipino youth (39% of Gen Z and 34% of Millennials) saying they are satisfied with the current healthcare system in the country. 50% indicate that the high costs of healthcare services and treatments are a major challenge to accessing healthcare, while 25% point to the limited availability of facilities and equipment.

To improve the situation, survey respondents feel that the government must address issues of affordability, accessibility, and quality of healthcare services in the country.

Affordable housing options and better living conditions:

Young Southeast Asians, who are ushering in a new wave of urban mobility as they seek education and careers in major cities, dream of homes that offer comfort, security, and access to essential services, such as public transport, healthcare, and education. This is often tied to the broader goal of becoming financially independent and moving out of their family homes in the name of freedom, convenience, and personal growth.

All hands in: Recommendations for public policy and private initiatives

“As Southeast Asia’s youth are poised to drive the region’s future,” explained Pongsiri, Managing Partner at Vero Advocacy, “addressing these challenges is not just beneficial but essential for harnessing their full potential and ensuring a sustainable and inclusive economic growth.”

With its expertise in government relations in Southeast Asia, Vero Advocacy recognizes the essential link between youth, private stakeholders, and government. By understanding young people’s concerns, Vero Advocacy underscores the need for meaningful engagement and effective responses from governments and companies to create inclusive and sustainable policies and initiatives.

• Youth-Centric Policies – Governments should prioritize initiatives that guarantee access to quality education, expand job opportunities, and improve healthcare affordability and accessibility. By focusing on these areas, they can create a supportive environment for young people to thrive.

• Genuine Youth Engagement – It is crucial to involve young people in policy dialogues and decision-making processes. Their insights and perspectives should be actively sought, ensuring that their voices are both heard and valued in shaping policies that impact their future.

• Dedicated Spaces for Youth Advocacy – Establishing dedicated forums or platforms where youth can freely share their advocacy efforts is vital. These spaces should facilitate open dialogue, encourage innovative thinking, and provide opportunities for young individuals to highlight their contributions to national development.

• Support for Entrepreneurs – The private sector should develop entrepreneurial programs that leverage existing resources and expertise. By offering funding and training, businesses can nurture creativity and business acumen, empowering a new generation of innovators and leaders.

• Corporate Social Responsibility – Businesses should embed youth-centric goals into their Corporate Social Responsibility (CSR) strategies, focusing on initiatives that uplift communities and address social issues pertinent to young people. This alignment will foster a more inclusive approach to social development.

“With Gen Z and Millennials comprising over half of the Philippine population, it is critical for leaders and changemakers to listen to their needs,” said Gio Tingson, Youth Advocate and former Chairperson of the National Youth Commission. “Many of us often hear and repeat Dr. Jose Rizal’s statement about youth being the hope of the motherland. But while it is true that young people are eager to effect change, it is just as important for us to listen to them and empower them with the tools they need to succeed and build a future that is sustainable for all.”

Source: Adobo Mag

Real estate market heading to a recession?

The Philippine real estate sector has been a key driver of the country’s economic growth. For over a decade, it has contributed significantly through investments and job creation.

However, just as every growth story has its limits, the sector is now showing signs of strain, with rising vacancy rates, increasing inventory and weakening demand, which suggest that the market may be nearing a tipping point.

According to British economist Fred Harrison, who famously predicted the 2007-2008 financial crisis, property prices tend to follow a relatively predictable pattern of rises and falls over time.

Based on his research and observations, which spans over 100 years, Harrison concluded that real estate cycles typically last around 18 years on average, although the duration of these cycles can be longer or shorter depending on prevailing economic and social conditions.

Using the real estate cycle theory as a framework for understanding property markets, Harrison explained that the cycle is divided into four phases: recovery, expansion, hyper-supply and recession.

The recovery phase, which begins after the real estate market bottoms out following a crash, occurs when property prices reach their lowest levels while vacancy rates remain high with minimal construction activity.

But as confidence slowly returns to the market, demand begins to pick up, which paves the way for the expansion phase. In this phase, banks become more open to provide financing for real estate projects as property values rise.

This expansion typically lasts for many years, depending on the strength of economic growth, until the market enters the hyper-supply phase, a period when the real estate market becomes overheated.

When property prices peak, demand weakens and vacancy rates rise as the market struggles to absorb the excess inventory. Eventually, the market transitions into the recession phase.

During a recession, the oversupply becomes unsustainable and leads to market corrections. Property prices fall, construction activity slows and developers face financial challenges as revenues shrink, while banks and financial institutions exposed to real estate loans incur losses.

Given the current market conditions, it is possible that we are in the hyper-supply phase of the real estate cycle. A review of historical data from seven major property developers listed on the Philippine Stock Exchange—Ayala Land, SM Prime, Megaworld, Filinvest Land, Robinsons Land, Century Properties and Vista Land—shows a consistent decline in inventory turnover over the past decade since 2014.

The average inventory turnover ratio in the property sector has declined sharply from 0.39 in 2014 to just 0.15 in 2024. This means the time required for the property sector to sell its inventory has risen dramatically from 31 months in 2014 to 82 months, or nearly seven years, by 2024.

Because of slower inventory turnover, the average number of months for the property sector to collect receivables has also increased from 17 months in 2014 to 31 months in 2024.

In a hyper-supply market where demand continues to weaken, developers burdened with unsold inventories might face delayed or partial payments from buyers. To attract buyers, they might also offer longer installment schemes, which further slow the collection of receivables.

This trend reflects the increasing financial pressure on the property sector, as lower receivables turnover signifies slower cash inflows. This limits liquidity and increases reliance on debt to sustain operations, both of which raise the sector’s overall financial risk.

In 2009, when the property sector was in the recovery phase following the financial crisis, interest rates were also high, with the 10-year bond yield at 8.1 percent. However, the implied risk premium was only 6.3 percent, which priced property stocks at an 11.9 price-to-equity (P/E) ratio.

During the expansion phase, which peaked in 2019 when interest rates were historically low at 4.3 percent, the implied risk premium was only slightly higher at 8 percent. This led to a median P/E ratio of 12.9 times for the property sector.

Today, as we enter the hyper-supply phase at a 10-year bond yield of 6.4 percent, the implied risk premium has risen significantly to 22.9 percent. This sharp increase in the risk premium has caused a higher required return for investors, which has reduced the median P/E ratio for the sector to just 4.3 times.

Historically, the hyper-supply phase can last for several years, depending on how quickly the market absorbs the excess inventory. According to this framework, the real estate sector may need to pass through the recession phase before returning to the recovery phase, as the market typically requires a correction period to resolve the imbalances created during hyper-supply.

Given this outlook, the prospect of a recession suggests heightened market volatility in the months ahead. As the real estate sector faces the challenges of excess inventory and weaker demand, addressing these issues will require careful strategic decision-making.

While this period may present considerable risks, it could also create opportunities for well-prepared investors to capitalize on undervalued assets as the market moves toward eventual recovery.

Source: Inquirer

PHL may need 50M sq.m. of industrial space by 2035

The Philippines may need at least 50 million square meters (sq.m.) of industrial space by 2035, with an estimated average price of P30,000 per sq.m., to accommodate surging demand from the manufacturing, logistics, and data center sectors, according to commercial real estate consultancy firm PRIME Philippines.

“By 2035, the major backbone of the Philippine economy will be the industrial sector. Industrial real estate is no longer just an asset — it’s the key to unlocking the Philippines’ economic future. The demand is here; the supply must follow,” PRIME Philippines Founder and Chief Executive Officer Jet Yu said.

Warehouse supply grew by 4% to 37.6 million sq.m. in 2024, driven by new developments in Laguna, Batangas, and Cebu.

PRIME Philippines projected that supply would breach 40 million sq.m. this year, with upcoming expansions in Rizal, Cavite, Laguna, Pampanga, Cebu, and Davao.

Mr. Yu noted that about a third of the projected demand will come from the development of data centers, with over 100 data centers expected to go live in the country within the next three years.

“The 50 million sq.m. is a conservative-to-optimistic estimate. In just one or two years, we’re going to see many countries, including the Philippines, localizing and housing their own data domestically,” he said.

Mr. Yu added that the country’s manufacturing and logistics sectors are also expected to fuel industrial space demand.

“There has been a rapid decentralization across the Philippines. Logistics players have strategically positioned themselves over the past three to four years,” he said.

“On manufacturing, when many companies from China sought to diversify their operations to other ASEAN neighbors, we somewhat missed that opportunity. However, over the next ten years, we expect significant demand,” he added.

Meanwhile, Mr. Yu said the country’s manufacturing sector could continue to thrive amid geopolitical tensions.

“As long as we play it strategically and carefully, it’s safe to say that the manufacturing sector will continue to thrive in the Philippines,” he said.

“In 2025 alone, we have already received interest from companies looking to expand their existing manufacturing facilities in the Philippines. These are secondary hubs as a way for manufacturers to diversify and mitigate potential risks,” he added.

The United States paused its planned 25% tariffs on Mexico and China in exchange for concessions on border and crime enforcement.

However, US President Donald J. Trump said he is not rushing efforts to defuse a trade war with China, which was triggered by a 10% tariff on all Chinese imports.

In response, China imposed targeted tariffs on US imports and placed several companies, including Google, on notice for possible sanctions.

Source: Business World