Marcos’ infrastructure push to support property market recovery

THE MARCOS ADMINISTRATION’S increased focus on infrastructure, digital business expansion, as well as its promise to not impose any future lockdowns, will help support the recovery of the property sector, JLL Philippines said.

Janlo C. De Los Reyes, JLL Philippines head of research and strategic consulting, said at a briefing on Wednesday President Ferdinand R. Marcos, Jr.’s assurance that there will be no lockdowns will encourage more companies to operate at pre-pandemic levels.

“This is one of the key aspects of the SONA wherein a lot of the lockdowns that we have experienced before are quite restrictive and that has impacted the real estate sector and other industries… What we expect now moving forward is that there’s less restrictions and low impact in terms of alert levels with regard to lockdowns that may be issued by the government,” he said.

The Philippine economy contracted by a record 9.6% in 2020 as the government imposed one of the strictest lockdowns to curb a rise in coronavirus disease 2019 (COVID-19) infections.

Mobility restrictions have further eased, allowing many businesses to resume full operations and workers to return to the office. Metro Manila and most parts of the country are now under the most lenient alert level.

Mr. De Los Reyes said Mr. Marcos’ infrastructure push will be important for the recovery of the real estate sector.   

“Another key aspect of the SONA (State of the Nation Address) is infrastructure. We are talking about road improvements, upgrade of existing airports, and construction of more international airports to support the tourism sector.  There’s also the continued support for infrastructure. There’s a lot of support behind the ‘Build, Build, Build’ program,” he said.

The government’s efforts to expand digital businesses will be positive for the real estate sector, particularly data centers.

“There is also universal connectivity that will be deployed in various islands to support digital transformation. What we expect from this is feeding off the data center demand. Especially now that we are seeing a lot of data center operators coming into the country, we’re expecting that digital consumption will increase,” Mr. De Los Reyes said.   

The JLL executive also noted recent laws such as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the amended Public Service Act, and Foreign Investment Act will improve the Philippines’ attractiveness as an investment destination. 

“These altogether points to creating a conducive investment climate for a lot investors that are seeking to enter the country,” he said.   

The government should also continue to develop more economic zones.

“Another is the growth of economic zones that will be fully supported through tax incentives, driving decentralization and growth outside the metro. What we expect is that there is going to be growth in other parts of the country led by ecozones and townships types of models moving forward,” Mr. De Los Reyes said.

JLL expects the Metro Manila real estate market to gradually recover this year.

“What we expect for the next couple of quarters is the continued gradual market recovery. What we’re seeing now is stability in terms of the market and what we expect moving forward is the continuity of that,” Mr. De Los Reyes said. — Revin Mikhael D. Ochave