September 16, 2013 10:52 pm [ manilatimes.net ]
by KRISTYN NIKA M. LAZO
The Philippine real estate sector needs more foreign investors, and will achieve greater growth if the 60-40 constitutional rule on ownership favoring Filipinos is changed.
“In real estate, I [think we should] open up. Because even if we do, they [foreign investors] cannot take away the real estate [establishments] in the country. And that made Singapore, London, Paris, Hong Kong and New York as premier cities . . . They have been kept afloat not by local investors but by foreign investors,” said Jose EB Antonio, Century Properties chairman and chief executive officer (CEO).
Century Properties has been partnering with worldwide-known brands like Trump and Versache, and even tapped architecture expert Philippe Starck, among others.
During the recent CEO Business Leadership Series held at the University of Santo Tomas Graduate School, Antonio said that the government should consider revisiting the Constitution and let foreign investors own more than 40 percent of businesses and even lands in the country.
“[Foreigners are] so persistent in buying [lands and investing in the country] that the only way they go about it if they are marrying a Filipina, or putting up corporations and companies in the country,” Antonio said.
In the 1987 Constitution, the 60-40 rule limits foreign ownership to only 40 percent, and requires the other 60 percent of the corporation, business or establishment to be owned by a Filipino. Since the country has been growing fast, the 60-40 rule has become a subject for debate.
“We have to revisit our Constitution because it was made number of years ago. In real estate, I would definitely open it up [in contrast to the 60-40], but except for certain areas like agriculture because we must protect our farmers. What I encourage for them is corporate farming because it leads to efficiency, ability to secure raw materials for great bigger scale farming,” he added.
Great demand for homes
As a real estate developer, Antonio said that there is a great demand for homes and luxury units, because of the growing middle-class population in the country.
“This has propelled a lot of purchase of homes in the country. Demand comes from first own buyers—people who own houses, and they demand about 350,000 units per year. The supply of all of us developers put together are only 250,000 a year. We have a shortage of 100,000; we are only catching up,” Antonio stated.
In the CEO Series facilitated by UST Graduate Professor Thomas Tiu, Antonio explained that a lot of people in the country can now afford a monthly amortization of P7,000 to P10,000, which drives his company to develop more luxury units and homes.
The Century Properties chairman also said that from having a lot of poor people, the middle class is increasing because of the rise of “business processing management [BPM] and other industries that came along with it” as well as the dollar remittances that overseas Filipino workers bring in.
He said that the BPM industry has a minimum wage of about P25,000 a month, “which is double the minimum wage in the country so the graduates now are given a good chance of earning well.”
Antonio also cited that the middle class is gaining in numbers because of remittances accounting to $20,000.
He emphasized that the Aquino administration should push for housing programs for the middle-class market.
“Government should be aware that there are growing middle class in the country. They must create an affordable housing program that is worth half a million pesos. With these homes, amortization is P2,000 a month and a lot of people can afford it. They will just go overtime and they can afford it,” he said.
“But who will produce 500,000 units? Very few [developers] would like to go [invest] there because it is unprofitable. You have the volume, but you don’t have the margin, and as a developer, you wouldn’t want to waste your time there. The government should be the one spearheading the plan,” Antonio added.