Colliers: Recent data, gov't moves to stoke property demand

Global real estate management firm Colliers said that some recently released government data and certain initiatives are expected to fuel property demand in several sectors.

These are the House of Representatives' approval on second reading of the proposed Internet Transactions Act, The Department of Tourism (DOT) expecting foreign arrivals to reach 4.8 million in 2023, and the implementation of Fiscal Incentives Review Board Resolution 026- 22 allowing IT-BPM (information technology-business process management) registered business enterprises to adopt up to 100 percent work-from-home (WFH) arrangement under the Board of Investments.

With regards to the approval on the proposed Internet Transactions Act, Colliers believes an e-commerce bureau is likely to be created following the House of Representatives' approval on second reading of the proposed Internet Transactions Act, as the measure is a priority bill of President Ferdinand "Bongbong" Marcos Jr. which he mentioned during his State of the Nation Address.

"According to e-Conomy, Southeast Asia noted that the Philippines registered the fastest growth in digital investments in the region with a 63 percent rise from 2021 to 2022. It added that the country's digital economy is likely to reach $20 billion in gross merchandise value by end-2022," Colliers Senior Research Manager Joey Bondoc stated.

Colliers believes that despite the revival of in-store shopping, online shopping will likely remain popular among consumers that prioritize convenience.

Moreover, due to this trend, many businesses related to e-commerce will be constructed, fueling more related property demand such as data centers, IT-related jobs, and so much more.

"Given online shopping's popularity, safeguards should be in place to protect consumers from substandard merchandise. The bill to be enacted by both chambers of Congress should put in place a bureau that will regulate online trade and act on consumer complaints," Bondoc concluded.

Meanwhile, the DOT said it expects foreign arrivals to reach 4.8 million in 2023, after recording 2.5 million visitors as of Dec. 19, 2022. The DOT also reported tourism receipts reaching P149 billion ($2.5 billion) as of Nov. 20, 2022.

Colliers believes that the arrival of more international tourists, along with Filipinos' growing propensity to spend on leisure-related expenditures, will stoke demand for hotels across the country and help raise hotel rates and occupancies moving forward.

"Data from the Philippine Statistics Authority showed that the tourism sector's share to the country's economy reached 5.2 percent in 2021, from 5.1 percent in 2020," Bondoc explained.

Lastly, Colliers believes that the government's provision to allow up to 100 percent WFH arrangement for IT-BPM companies is likely to stoke office demand in key provinces.

"These companies account for 41 percent of the 1,088 IT-BPM registered business enterprises under the Philippine Economic Zone Authority," Bondoc said.

Source: Manila Times

Must-Have Property Insurances for Your House

Whether you’re a first-time buyer or a longtime homeowner, purchasing a new home is an exciting process. Going to open houses or visiting homes for sale with a real estate agent allows you to see what qualities you want in your future home and what features you don’t. Finding your ideal new home and beginning the purchasing process is exciting, but it can also be stressful. Overthinking about prices, preparing for home inspections, and mortgage requirements may take away from the fun of purchasing a property.

Although it is not necessarily required by the law, getting house insurance is sometimes neglected in the extensive list of things to complete before buying and moving into your new home. Obtaining homeowners insurance prior to closing is a critical step in the home-buying process that should be prioritized especially if you get a portion of your funds from a house loan.

Mortgage lenders will refuse to lend you funds unless you can show proof that you have purchased this form of insurance.

Before we dive in when is the best time to get a home insurance?

In most cases, house and lot property insurance is purchased prior to closing on a house. You can protect your new home from disaster by getting the coverage you need before you even move in. It’s crucial to compare different insurance policy alternatives because they may provide varying levels of coverage. Once you’ve discovered the suitable insurance for you, make sure it fits your lender’s needs. Most banks will not finance a mortgage or a home equity line of credit unless the property is insured. Some lenders may even require you to acquire additional coverage in addition to a standard homeowners insurance.

You can get insurance after confirming that the coverage limit (based on replacement cost values) you choose fits your lender’s standards. This should be completed before you attend the closing meeting for your house. When the final closing date approaches, the insurance provider will usually pre-approve the policy and wait for your escrow/title firm to issue a Proof of Insurance request. Before the closing date, the insurance company will email or fax coverage confirmation.

Note that covering the full replacement cost is better than just actual cash value.

Policies of the best home insurance in the Philippines include four (4) essential types of coverage:

1. Interior and Exterior Damage of the House

The best home insurance will reimburse you if your residence is damaged by fire, hurricanes, lightning, vandalism, or other covered calamities. Floods, earthquakes, and poor property upkeep are typically not covered, and you may need to purchase additional policies if you want that sort of coverage. Freestanding garages, sheds, and other structures on the property may require their own coverage, following the same standards as the main home.

2. Personal belonging coverage

The best home insurance will protect you if your furniture, clothes, sports equipment, or other personal belongings are stolen or damaged due to allied perils such as fire, storm, falling aircraft, or other insured calamities. Most insurance providers cover 50 to 70 percent of the cost of a home’s structure insurance. Off-premises coverage is included in this section of the insurance. This implies that unless the policyholder is in a location the is off the coverage of the policy, their things are insured anywhere. Jewelry, furs, and silverware are normally protected, however there are usually cost restrictions if they are stolen. Individuals can acquire a specific personal property endorsement or floater and insure the item for its appraised value to insure these goods to their full worth.

Standard homes insurance will cover trees, plants, and shrubs. Theft, fire, lightning, explosions, vandalism, riots, and even crashing airplanes are all covered. They are not protected from wind or illness.

3. Liability Protection

The best home insurance will protect policyholders and their family members from claims for bodily harm or property damage they cause to others. It also covers pet-related damage, whether your dog accidentally bit your neighbor or your house visitors. Up to the policy’s agreement, the liability details of the insurance covers both the expense of defending the policyholder in court and any court hearing. Basically, it is an insurance that will protect you from a lawsuit of others.

4. Additional Living Expense

The best home insurance will cover your expense if your residence is uninhabitable due to damage from a fire, storm, or other insured events, this covers the additional costs of living away from home. While the house is under renovation, it covers hotel room costs, daily meals, and other living expenditures. The amount of coverage for additional living expenditures varies per employer.

Optional Home Insurance Coverage:

Fire Insurance

A fire insurance protects your home in case of fire accidents. Fire insurance policy usually covers direct loss or damage to a particular property caused by an insured peril during the covered period.

Flood insurance

protects your home and possessions from damage caused by flooding. It’s a different insurance with a deductible of its own. If you reside in a flood-prone state or area, this coverage is a smart idea, and depending on your location, it may be needed.

Earthquake insurance

protects your home in the case of earthquake damage. This coverage has its own deductible as well.

Replacement cost plus

is an additional level of coverage that can help you rebuild your house after a total loss. If you’ve had your home for a long time and are concerned about depreciation, adding additional replacement cost coverage to your policy can be a smart option.

Sewage or drain backup

which is an undesirable but frequent problem for homes, water backup of sewer safeguards your house.

Other structure insurance

protects anything that isn’t linked to your house, such as a gazebo, shed, or detached garage. If you have any of these buildings on your property, you should insure them to prevent having to pay out of cash in the event of an accident.

Personal umbrella liability

protects beyond the policy limitations established in your basic homes policy, insurance offers additional coverage for physical injury, property damage, malicious damage, and personal harm to others.

Medical payments coverage

may cover medical expenses incurred as a consequence of an accident on the customer’s property. This coverage is meant for rapid medical care of customers’ visitors on their premises, regardless of fault.

Ordinance or law insurance

it is implemented if you need to reconstruct your home to meet current building rules after a covered loss. If you have an older house, it may be a wise decision.

Brand New Belongings

is an optional add-on endorsement that can help you restore or replace specific belongings following an insured loss without taking into account of deterioration or depreciation.

Better roof replacement

It is an optional coverage that can help you repair your roof to be stronger and safer.

Now that you get the basic grip of knowledge you need to know before acquiring home insurance, listed down below is the list of home insurance companies in the Philippines.

Authorized Insurance Companies as of 31 October 2022:

List-of-Insurance-Companies-with-Valid-and-Existing-CA-as-of-31-October-2022

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Download PDF • 1.03MB

Source: Insurance Commission Philippines

PHL improves in 2022 global talent ranking

The Philippines jumped three spots in an annual global ranking of economies that measures their ability to attract and retain a skilled workforce, a report by the Institute for Management Development (IMD) World Competitiveness Center showed.

Based on IMD’s World Talent Ranking 2022 released on Thursday, the Philippines ranked 54th out of 63 economies, up three places from 57th spot (out of 64) in 2021.

Despite the improved ranking, the Philippines still placed 13th out of 14 Asia-Pacific economies in World Talent Ranking, ahead only of Mongolia (62nd). Singapore had the highest ranking (12th), followed by Hong Kong (14th), Australia (18th), Taiwan (19th) and New Zealand (31st).

Img source: Business world

European countries topped the index, with Switzerland, Sweden, Iceland, Norway, and Denmark in the top five.

The IMD rankings are based on three factors: “appeal” or the extent to which an economy attracts and retains foreign and local workers, “investment and development” which measures resources allotted to develop a homegrown workforce, and “readiness” which considers the quality of the skills and competencies in the talent pool.

The 2022 report showed the Philippines now ranked 35th in readiness, from 47th in 2021. It maintained its ranking for investment and development (62nd) and appeal (43rd).

The Philippines achieved an overall score of 41.10 in the 2022 ranking, up 2.52 points from 38.58 in 2021.

“Global economies are reassessing the balance they make when cultivating domestic and international talent, in a bid to compensate for skilled labor losses as a result of travel constraints and lockdowns during the pandemic,” the IMD said in a separate statement.

Sought for comment, IMD World Competitiveness Center Senior Economist Jose Caballero said that the Philippines’ ranking went up as more skilled labor were available.

“It improved in the availability of skilled labor reaching 2nd place (from 9th) and in the effectiveness of the university education to meet the demand for particular competencies (moves to 32nd rank from 40th),” Mr. Caballero said.

Under the readiness factor, the IMD said that the country’s strengths are in labor force growth (3rd place), available skilled labor (2nd), competent senior managers (20th), and graduates in science-related fields such as engineering, math, natural sciences, and information and communications technology (15th).

However, the IMD said the Philippines trails other countries (57th) in terms of the Programme for International Student Assessment (PISA) by the Organization for Economic Co-operation and Development (OECD).

Students in the Philippines performed poorly in reading comprehension, science, and mathematics in the PISA 2018 cycle.

In terms of appeal, the Philippines scored high in collecting personal income tax (15th), but ranking low in brain drain (46th) and attracting and retaining talent (36th).

“Under the appeal factor, the level of motivation of the labor force increased from 42nd to 35th,” Mr. Caballero said.

In terms of the investment and development factor, the country showed weaknesses in terms of total public expenditure (59th), total public expenditure on education per student (62nd), pupil-teacher ratio in primary education (58th), and pupil-teacher ratio in secondary education (59th).

“In the future, national education systems will become less important to determine the quality of the talent pool. This is the result of talent globalization, but also of countries borrowing successful educational policies from others and the resulting race to the top in education,” IMD World Competitiveness Center Director Arturo Bris said.

“Indirectly, quality of life and economic sustainability will indeed determine the quality of the talent pool as well. There will be winners and losers,” he added.

Mr. Caballero said that the long-term competitiveness of the Philippines would depend on “an effective talent management strategy.”

“The talent management strategy should focus on the development of in-demand skills and competencies by not only increasing but also adjusting public expenditure on education to target that development (such as alignment between investment and outcomes),” Mr. Caballero said.

“In addition, further advancements can originate in improving the levels of quality of life, addressing the root-problems (such as lack of opportunities) of brain drain and increasing the attractiveness of the country for highly-skilled overseas personnel (such as higher quality of the job environment),” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the Philippines’ higher ranking could be attributed to the easing of pandemic-related restrictions.

“The improvement in the country’s ranking may have to do with the further reopening of the economy towards greater normalcy, especially the easing of restrictions on the entry of foreign visitors since February 2022 and resumption of face-to-face classes. These could help the recovery of many businesses and industries especially those hard hit by the restrictions,” Mr. Ricafort said.

He said these efforts will help boost the productivity of students, after learning losses during the coronavirus pandemic.

“Further improving ease of doing business for the country especially for foreign talent and investors, as well as further improvement of the country’s adherence to environment, social, and corporate governance (ESG) standards would help improve the country’s rankings,” Mr. Ricafort said, adding that the lower cost of living in Philippines would help attract foreign talent.

Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said in a Viber message that there should be more investments towards developing the human capital.

“Investing in the Filipino is almost always the step in the right direction,” Mr. Asuncion said. “(There should be) ever-increasing investments in top-notch education and training for all Pinoys. Market-responsive curriculum/curricula should be top priority.”

Chris Nelson, British Chamber of Commerce of the Philippines executive director, said that the country would improve its ranking by finalizing its participation in the Regional Comprehensive Economic Partnership (RCEP) trade agreement, as this would attract foreign investments.

“It is also very important that the Senate sign and complete the RCEP. That is important because it is the largest trading bloc in the world. Many other countries have already ratified. The Philippines would clearly benefit from being a member of RCEP and would further encourage investments here,” Mr. Nelson said.

Touted as the largest free trade agreement, the RCEP, entered into force on Jan. 1. The participating countries include the 10 members of the Association of Southeast Asian Nations, Australia, China, Japan, South Korea, New Zealand.

The Philippines has yet to finalize its participation in the RCEP as it awaits the Senate’s concurrence of the trade deal.

Source: Investostat