Commentary: A booming real estate market in the Philippines reveals its diaspora’s purchasing power

SYDNEY: The Philippine labour diaspora is one of the largest in the world with around 9.1 million people or 10 per cent of the population working overseas.

Remittances of US$28 billion in 2015 comprised 9.8 per cent of the Philippines’ GDP, underscoring the enormous contribution this group makes to the homeland.

Manila Philippines financial district economy(Photo:CNA)

But what is less acknowledged is Filipino migrants’ collective consumer power and the ways in which this consumer power is transforming businesses in the Philippines.

REAL ESTATE DEMAND

One area that is especially benefiting from migrant investment is the Philippines’ real estate market. An increase in demand for housing by Filipino migrants has driven the real estate boom in Metro Manila and surrounding areas since the early 2000s.

According to Manuel Serrano, the head of the Chamber of Real Estate and Builders Association of the Philippines, “overseas workers have revitalised the condominium market”.

The effect of the real estate boom is extending beyond the Metro Manila area too. New homes and high rises are being built in Tagaytay, in provincial capitals like Cebu and booming rural towns like Las Pinas and Angeles.

Real estate companies in the Philippines initially responded to overseas workers’ demand for houses and condominiums by expanding their services and thinking to the international level.

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Around 262,000 Filipinos work in Kuwait, nearly 60 percent of them domestic workersThere are about 10 million Filipinos work overseas (Photo: AFP/Noel Celis) Around 262,000 Filipinos work in Kuwait, nearly 60 percent of them domestic workers AFP/NOEL CELIS

Property developer Ayala Land launched Ayala Land International Sales in early 2005 to target overseas Filipino workers, emigrated Filipino professionals as well as Filipino dual citizens residing in the United States and Europe who may be thinking of retiring in the Philippines.

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Real estate companies such as Rockwell, Century Properties, Filinvest Land and Ayala Land sent teams of sales representatives overseas to target potential Filipino buyers in the United States, Canada, the United Kingdom, Dubai and Singapore.

Between 2004 and 2005, Rockwell sales representative Mika Bautista travelled to the United States four to five times a year to sell condominiums to Filipino Americans. And in the United Kingdom, real estate companies presented at Philippine events such as the Filipino Barrio Fiesta.

COMPANIES ADVERTISED TO CUSTOMER OVERSEAS

Philippine real estate companies also advertised aggressively and ran attractive promotions in international Philippine media.

Rockwell advertised on The Filipino Channel (a Filipino cable television) while companies based in London, Canada and Australia advertised in magazines like Planet Philippines and US-based companies advertised in Filipinas magazine.

They also opened international branches (complete with a physical office and permanent staff) in cities such as Singapore and London.

These strategies have yielded enormous profits.

A high-rise condominium dubbed "the national photobomber" will continue to loom over aA high-rise condominium under construction in the Philippines (Photo: AFP/JAY DIRECTO) A high-rise condominium dubbed "the national photobomber" will continue to loom over a historic Philippine monument after the Supreme Court struck down a bid by conservationists to have it torn down AFP/JAY DIRECTO​​​​​​​

In 2007, 31 per cent of Ayala’s unit sales and between 40 to 50 per cent of Filinvest’s sales were driven by overseas Filipino workers. Megaworld — a company known to focus on overseas Filipino clients — reported a 92 per cent profit increase of US$30.2 million in 2006, and Ayala earned 5.2 billion pesos (US$98 million) from US-based Filipino workers in 2007.

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These companies have transformed their business practices and become transnational operators to attract Filipino migrant customers to buy their products, to great success.

Migrants are now imagined not just as consumers but also as worthy and reliable investors. As consumers and assertive investors, Filipino migrants are clearly not marginal actors — they are transforming business and physical landscapes.

As owners of condominiums, Filipino migrants have also become purveyors of the new ultra-modern lifestyle that is rapidly being introduced to every corner of the Philippines.

Mina Roces is Professor of History in the School of Humanities and Languages in the Faculty of Arts and Social Sciences at the University of New South Wales. This commentary first appeared on East Asia Forum. Read it here.