The ARROW Act Effect: Unlocking Regional Property Hotspots Outside Metro Manila

For decades, the Philippine real estate narrative has been dominated by a singular challenge: Metro Manila is heavily congested, but moving outside the capital is a gamble because critical infrastructure takes years—sometimes decades—to finish.

If you are an Overseas Filipino Worker (OFW), a local homebuyer, or a seasoned property investor, you know the drill. You buy a pre-selling lot in a provincial township promised to be the "next big thing," only to wait years for the connecting highway or water pipeline to be completed due to endless right-of-way (ROW) disputes.

In 2026, that narrative is finally shifting. The implementation of Republic Act No. 12289, formally known as the Accelerated and Reformed Right-of-Way (ARROW) Act, is aggressively cutting through the bureaucratic red tape that has historically choked Philippine infrastructure.

For property investors, this isn't just a legal update—it is the ultimate signal to start land banking and buying outside the capital. Here is how the ARROW Act is unlocking the country's most lucrative regional property hotspots.

What is the ARROW Act (RA 12289)?

Signed into law in late 2025 and fully taking effect this year, the ARROW Act is a sweeping legislative reform designed to fast-track the government's and the private sector's ability to acquire land for crucial infrastructure.

Before the ARROW Act, a single landowner holding out on a highway expansion could delay an entire multi-billion-peso project for years. Today, the new law removes these bottlenecks by:

• Standardizing Property Valuation: Moving away from outdated and inconsistent BIR zonal values, initial compensation offers are now strictly based on the updated Schedule of Market Values (SMV) under the new Real Property Valuation and Assessment Reform Act (RA 12001). This ensures transparent and fair pricing for landowners.

• Fast-Tracking Expropriation: If negotiations stall, implementing agencies can now deposit 15% of the land's market value (plus 100% of the structure's replacement cost) to the court to immediately secure a writ of possession, allowing construction to begin while disputes are settled legally.

• Expanding to Private Utilities: Crucially, the law now covers private entities providing public services. This means power grids, water pipelines, and telecommunications networks can expand into the provinces at the same aggressive pace as government roads.

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Why This is a Massive Win for Real Estate Investors

As a property investor, your primary strategy should always be to follow the infrastructure. Infrastructure dictates accessibility, accessibility drives commercial activity, and commercial activity skyrockets land values.

The ARROW Act removes the execution risk from provincial infrastructure projects. When developers announce a new township in the provinces, you can now invest with confidence knowing that the supporting tollways, railways, and utilities will not be paralyzed by right-of-way injunctions.

3 Regional Hotspots Ready to Explode

With the legal roadblocks cleared, developers are aggressively expanding their land banks. Here are the top three emerging hotspots you should be watching today:

1. Pampanga (Central Luzon's Megalopolis)

Pampanga has long been touted as the counter-magnet to Metro Manila, anchored by the Clark International Airport and the upcoming North-South Commuter Railway (NSCR). The ARROW Act ensures that the vital arterial roads connecting rural Pampanga municipalities to these mega-structures are completed on schedule.

• Investor Move: Look beyond Clark and Angeles. Municipalities like Mexico, Porac, and San Fernando are prime targets for mid-income residential subdivisions catering to logistics and aviation professionals.

2. Bacolod (The Visayan Economic Powerhouse)

Bacolod is currently experiencing a massive influx of national developers building mixed-use townships. However, power and water supply reliability have historically been a concern in the region. Because the ARROW Act empowers private utility companies to fast-track their infrastructure, Bacolod is poised to seamlessly support dense, IT-BPO-driven commercial parks.

• Investor Move: Commercial lots and pre-selling condominium units near the new Bacolod economic zones offer excellent capital appreciation and high rental yield potential.

3. Davao (Mindanao's Logistics Hub)

The expansion of the Davao road networks and the highly anticipated Mindanao Railway Project have faced significant right-of-way hurdles in the past. The strict timelines enforced by the ARROW Act are breathing new life into these projects, effectively shrinking the travel time between Davao City and its neighboring agro-industrial provinces.

• Investor Move: Industrial lots, warehousing spaces, and horizontal housing projects on the fringes of Davao City are highly strategic plays right now.

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What This Means for OFWs and Local Homebuyers

If you are buying a home to live in or an asset to generate passive income, the traditional advice of "location, location, location" needs an update. Today, it is about "timing the infrastructure."

1. Do not wait for the ribbon-cutting: The highest capital appreciation happens between the announcement of an infrastructure project and its completion. The ARROW Act practically guarantees that these projects will finish closer to their target dates.

2. Look for utility-ready townships: Ask your broker not just about the roads, but about the water and internet connectivity. Townships that benefit from fast-tracked utility lines will command premium rental rates from digital nomads and young families.

3. Hold for the medium term: Buying land in these emerging hotspots is a 3-to-5-year play. Lock in today's pre-selling prices before the major highways are completed and the zonal values are adjusted upwards.

Source: Ziggurat Real Estate

Why improving tourism’s competitiveness is crucial for PH property

The Philippines’ international arrivals remain disappointingly low compared to our ASEAN peers. The country has yet to breach pre-COVID figures, while Malaysia and Vietnam have more than surpassed their respective pre-pandemic international arrivals. In our view, boosting the country’s tourism sector is important as it is a property segment that can help generate more employment opportunities in the countryside.

More tourists mean more hotel investments across the Philippines. The private sector cannot do it alone, and the government needs to fulfill its role in plugging gaps and enticing more long-haul and high-spending foreign tourists to visit the Philippines.

 In 2026, Metro Manila will record its biggest hotel completion since 2018. From 2026 to 2029, about half of new hotel completions across the capital region will have foreign brands, including Mandarin, Dusit, Canopy, and Moxy. Philippine developers remain aggressive in partnering with foreign hospitality brands.

Domestic market stokes hotel demand

Colliers Philippines believes that domestic travelers continue to prop up hotel occupancies and daily rates, especially in key hubs including Metro Manila, Cebu, Cagayan de Oro, Davao, and Clark in Pampanga. The staging of briefings complementing the ASEAN Summit 2026 in Cebu, Bohol, and Manila should boost the Philippine government’s efforts to lift the country’s stature as a MICE destination in the region.

In our view, the government should focus on expanding and diversifying the Philippines’ leisure demand base, with some countries from Europe and the Middle East being the ‘low-hanging fruits’. Overall, we believe that developers should further explore the feasibility of offering conference halls and meeting rooms, as well as consider partnering with foreign hospitality brands to help raise Philippine tourism’s competitiveness.

 The public sector, on the other hand, should continue improving the country’s infrastructure network–from roads to airports–to ensure ease of travel and to accommodate more local and international travelers. An intensive public-private sector cooperation is crucial in improving the country’s travel and tourism competitiveness. 

Maximize tourism department’s latest initiatives

 In our view, hotel operators should be mindful of the government’s latest programs aimed at attracting long-staying and high-spending foreign tourists. Hotel operators should be on the lookout for tourism policies aimed at propping up hotel occupancies and expenditures within and outside Metro Manila. The Philippine government, for instance, has introduced visa-free entry for Indian and Chinese nationals.

In addition, new international flights have been launched from key and emerging markets such as Russia, Palau, Canada, and India. In our view, hotel players should also target long-haul and high-spending tourists, including those from a number of European and Middle Eastern markets.

Complement hotels with MICE facilities 

Colliers sees several in-person events driving demand for meetings, incentives, conferences, and exhibitions (MICE) facilities. We believe that in-person events such as pharmaceutical product launches, property exhibits, bridal fairs, technology-related trade fairs, and travel & tourism expositions propel take-up for MICE and accommodation facilities.

Colliers believes that this year will be a turning point for the Philippine government’s efforts to promote the country as a regional MICE hub. The Philippines is hosting the 48th and 49th ASEAN Summits. As part of the conference, Cebu and Bohol hosted this year’s ASEAN Tourism Forum, ASEAN Travel Exchange, and other key meetings, with the ASEAN Leaders’ Summit to be held in Cebu. Manila is also scheduled to host related events in November.

Source: Philstar

Big bold reform: Land tenure

As part of the “big bold reform” initiative by the administration, the Department of Agrarian Reform (DAR) is contemplating issuing an administrative order (AO) purportedly removing the requirement of securing the agency’s clearance on land transactions on private agricultural lands and the transfers of awarded agricultural lands under Republic Act 6657, or the Comprehensive Agrarian Reform Law (CARL), as amended.

The agency believes that this will significantly alter the land market in the country.

First, it will enable farmer-entrepreneurs to own land beyond the 5 hectares limit for a couple tilling the land and 3 hectares for an individual cultivator. This will allow consolidation of farmlands, which have fragmented into miniscule sizes (average farm size now is 0.83 of a hectare) due to the protracted implementation of CARL. In turn, land consolidation will enable producers to enjoy economies of scale in production.

The other implication, which is no less significant, is that it will facilitate conversion of agricultural lands to nonagricultural uses such as real estate development and the construction of more industrial sites and tourism spots. The difficulty in converting agricultural lands into nonfarm purposes is seen as one of the causes of rising real estate and industrial development costs.

The proposed AO brings a sense of excitement because it has the potential to trigger massive investments from the private sector, both local and foreign, to the rural sector, in particular. However, the problem is that despite the AO’s issuance, pundits are claiming that its potential of contributing to development will not be realized due to legal infirmities.

A position paper, written by Erwin Tiamson, a recognized legal expert on land laws in the country and a member of the Foundation for Economic Freedom, elaborates on the reasons.

He argues that the proposed AO indeed “weakens the operational relevance of the 5-hectare retention limit without repealing it” since lands can now can be consolidated through ordinary transactions without fear that the ceiling will be enforced by DAR during the point of transfer. Take note that the AO lifts DAR’s clearance authority during the process. The result is that while there is a CARL land ownership retention ceiling provision, the removal of DAR’s clearance authority at this transaction point means the absence of an agency to enforce this provision.

Thus, the AO has the effect of making the retention ceiling “dormant” or temporarily inactive.

Tiamson clarifies that this is not a new legal ploy, as this was also applied to the share tenancy law, which declared that this tenurial arrangement is illegal (criminal) though hardly enforced now. By resorting to this legal maneuvering, the measure avoids the trap of raising the issue to Congress where such an amendment will expectedly trigger controversies and divisions. And the Marcos administration can ill-afford this given its declining political capital.

The downside of this “dormant” approach, Tiamson observes, is that since the proposed AO is a statutory amendment, its continued implementation will be at the whims of the Executive branch of government. A change in the administration with a pro-agrarian reform bias in the future will likely trigger a return to the low land ownership retention ceiling as stipulated in CARL.

However, Tiamson sees land conversion as the more problematic aspect of the DAR AO. Rigidities in the land conversion process have negative downstream consequences on the ability of local government units (LGUs), and the Department of Human Settlements and Urban Development (DHSUD) to reclassify lands for nonagricultural development purposes such as designation for residential areas and industrial sites. Similarly, investors will be discouraged by the lengthy and costly land conversion process.

The AO does not address this problem, Tiamson said. While LGUs, DHSUD and even the private sector can formulate zoning and development plans in their respective localities for the rational use of their scarce land resources, the matter becomes moot and academic if a land conversion authority is not issued by DAR.

“The reform improves land mobility and consolidation. It does not reconcile the institutional conflict between decentralized planning and centralized conversion control. Until conversion authority is harmonized with land use planning, development uncertainty persists,” Tiamson said.

What are the key takeaways from Tiamson’s assessment of DAR’s AO?

First, it obviously does not constitute a “big bold reform.” It is neither “big” nor “bold” because it does not structurally address the root cause of the problem in a more assertive manner.

Two, there will be a need to amend the specific provision in CARL regarding the land ownership retention ceiling to raise it at a level where our food producers can enjoy economies of scale. Only by introducing such an amendment by Congress that the uncertainties over the retention ceiling and the land market can be resolved.

Three, a big bold reform will require streamlining the land conversion process that might involve stripping partly the powers of DAR on land conversion. This will necessitate the formulation and passage of a national land use plan that identifies in detail areas designated for agricultural, real estate, industrial development, among others. This then becomes the basis of whether lands should be retained for further agricultural development or for nonagricultural uses, which facilitates the land conversion process.

Four, the ultimate measure to remove uncertainty over the land market is the declaration that CARL has been completed, with a promise that no further extension will be accommodated. Further implementation will just be confined to areas which have been issued with a notice of coverage (NOC) and no further NOC will be issued by DAR. Note that as per DAR data, almost 88 percent (or nearly 5 million hectares) of targeted lands for distribution have been placed under agrarian reform.

In the past, agrarian reform advocates theorized that land reform would increase agricultural productivity and result in countryside development. Ironically, scholarly studies have now revealed that in the Philippine case, agrarian reform actually led to a decline in farm productivity by around 17 percent due to fragmentation of lands into miniscule plots. In other words, the way we implemented agrarian reform consigned our small farmers to poverty. It is high time that we shift gears.

Let us not allow an economic dogma popular in the mid-20th century to continue to dominate our agriculture development policy landscape. We are now in the 21st century wherein adopting and adjusting to new technologies, particularly the advent of artificial intelligence, will determine whether our economy will further progress or stagnate.

Source: Manila Times