Philippine seen growing by 4.5%

UBS cites improvement in investment inflows


     THE PHILIPPINE economy may grow by 4.5 percent this year, faster than the earlier forecast of 3.3 percent, considering an improvement in the investment inflow to the country, according to UBS Securities.


     However, UBS economist Edward Teather said in a research note that the improvement had not reached a point that good times ahead were ensured.


     Teather said "favorable development and clearer evidence of strengthening investment" were needed to be seen lest apparent improvement could turn into disappointment.


     "Manila has been the place to be early 2012," he said. "The Philippine equity market has outperformed its peers with dollar returns helped peso gains."


     Teather said the Philippine financial markets had recovered since weakening in the second half of last year along with other markets in Southeast Asia.


     "Reflecting an earlier recovery in activity data than we expected, we revise up our real GDP forecast to 4.5 percent for 2012 from 3.3 percent," he said. "The improved growth data supports our call that the Bangko Sentral ng Pilipinas was done easing policy rates."


     In its most recent policy meeting, the BSP kept its overnight borrowing rate at 4 percent and overnight lending rate at 6 percent, mainly due to an "assessment of a favorable inflation environment."


     "Relative to ASEAN (Association of Southeast Asian Nations), the recent performance of the Philippine equity market seems linked to prospects for an upswing in investment," Teather said.


     "We can see the potential for a further leg up in investment activity as GDP growth recovers from a slower than average pace in 2011 - based on easy credit conditions and available savings," he added.


     Even then, the economist said the performance of the Philippine financial market indicated the need for clearer evidence of strengthening investment.


     "We are hopeful, but there is a risk of near term disappointment in performance relative to the rest of ASEAN if this is not forthcoming," Teather said.


     "Limiting downside risks for investors, recovering growth and easy policy settings are usually good news for asset prices - but the Philippines is not the only Asian market with those attributes," he said.


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Saturday, April 28, 2012
Source: Philippine Daily Inquirer - Business by Ronnel W. Domingo

Developer: Collapsed wall ‘minor part’ of condo project

from Cebu Daily News

9:34 am | Sunday, April 15th, 2012

THE management of Taft Property Venture Development Corp. said the collapse of part of a retaining wall last April 10 was a “minor part of the entire project” for Horizons 101 in Cebu City.

In a statement, the developer said “no work has been started on the tower at all” for its 50-story condominium along General Maxilom Avenue and that the excavation work “is not related to the tower integrity and structure.”

The statement in full:

A portion of the shot crete retaining wall, which was constructed by the excavation contractor of Taft Property  (i.e., Asdec Builders from Manila), collapsed due to the water build-up that  caused the soil movement and for which the retaining wall was not able to hold up.

As a result thereof, eight residential houses located near the site were affected and put at risk.

The Cebu city government unit, through Mayor Mike Rama, issued a cease-and-desist order against Taft Property directing Taft to suspend any construction work and activities on the project.

The City then ordered the immediate evacuation of all residents living in the affected houses.

The affected families were evacuated and most of them are now billeted in pension houses, courtesy of Taft Property.

Some of them opted to stay with relatives for which they were given monetary assistance.

In addition to paying for their dwelling expenses, Taft Property also provided the affected residents with food, toiletries and other basic necessities.

The show of support will continue until the residents can move back to their respective houses.

Taft Property is doing everything it can to ensure the safety, security and convenience of the affected residents.

Taft Property presented to Mayor Rama and the Office of the Building Official its solution to address and rectify the situation within 60 days.

The plan had the imprimatur of Dr. Salvador Reyes, the acknowledged dean of local geo-technical experts in the Philippines.

During the meeting, the OBO officials found the plan acceptable but they  want to make sure that it is strictly followed and implemented.

As agreed during the meeting, Taft Property was given the go-signal to commence work on its solution.

According to OBO, the remedial works are not covered be the cease and desist order issued to Taft Property. Only excavation work-related is suspended.

According to Taft, the problem on the excavation is only a minor part of the entire project.

The activity is not related to the tower integrity and structure.

As a matter of fact, no work has been started on the tower at all.

Furthermore, the excavation contractor has no relation to a general contractor in terms of capability, resources and skills, which would be prime requisites in selecting the major contractor for the tower itself.

Taft Property has obtained all the necessary permits and licenses from the government agencies concerned.

Property Sector Loans Hit Php518 Billion Pesos

Local banks have lent a total Php518.6 billion pesos to the property sector in 2011 of which real estate loans accounted for the bulk of 97.5 percent, the Bangko Sentral ng Pilipinas (BSP) reported.


Based on the BSP data, the banking sector's exposure to the property market was 6.8 percent higher than the 2010 figure.


The banks' property sector exposure refers to real estate loans and property-related securities, while real estate loans refer to borrowings for housing and commercial developments.


Of the total amount, BSP said real estate loans in 2011 amounted to Php505.87 billion pesos, 19.96 percent higher compared to end-2010's total loans.


Of this amount, Php478.93 million pesos is current real estate loans and  Php25.36 billion pesos is non-performing real estate loans. The sourced loans are lower compared to 2010's Php28.5 billion and the third quarter of 2011's Php25.97 billion pesos.


Data show that universal, commercial and thrift banks' non-performing real estate loans ratio improved to five percent from previous quarter's 5.5 percent and from 2010's 6.8 percent ratio.


As a percentage of total loan portfolio for 2011, the central bank noted that delinquent real estate loans dipped to 0.7 percent from September 2011's 0.8 percent.


The non-performing residential real estate loans ratio, in the meantime, stood at 4.3 percent from 4.7 percent end-September 2011 but was better than the non-performing commercial real estate ratio of 5.5 percent from the previous quarter's 6.1 percent.


At the end of 2011, residential real estate loans totaled Php220.84 billion pesos, higher than previous quarter's Php207.4 billion pesos and 2010's Php188.35 billion pesos. Commercial real estate loans amounted to 285 billion from September 2011's Php264.4 billion pesos and 2010's Php233.35 billion pesos.


The BSP also said that even with the increasing real estate loans, the ratio of real estate loans to total loan portfolio, exclusive of interbank loans, went down to 14.5 percent from the previous quarter's 14.6 percent as the 7.8 percent expansion in total loan portfolio outmatched the 7.2 percent rise in real estate loans. The ratio however is higher compared to 2010's 14.3 percent.


Bankers noted that in 2011, improved financing schemes helped spike interests in buying real estate and borrowers were able to avail of low rates. (LCC)


Source from Manila Bulletin under Business Bulletin, Monday, March 26, 2012