A strategic location, a strong economy and a booming tourist sector make the Philippines a highly attractive opportunity for property investors.
Located in the western Pacific Ocean, the Philippines is one of the most popular destinations in Southeast Asia for tourists, thanks to its stunning beaches and rainforests.
There are over 100 million people living in the Philippines, primarily on around 2,000 of its 7,000-plus islands. A large part of the residents live in the main urban centre of Metro Manila, or Cebu and its capital, Cebu City. As well as domestic workers living the cities, there is a thriving expat populatation from around the world, adding to a diverse culture.
International schools for expats are mainly located in Manila, while those looking to enjoy the nation’s beaches and caves will find resorts on island such as Boracay and Carabao.
The Philippines enjoyed a burst of interest among international investors in 2016, as buyers were drawn to the nation’s healthy economy. The country’s economy rose 6.8% year-on-year, according to official figures, its fastest rate in three years – and the fastest in the Asia Pacific region, ahead of China (6.7%), Vietnam (6.2%).
The Philippines ranked in top 10 most popular destinations four times in 2016. Manila is the area where particularly strong yields are possible, thanks to high demand for accommodation, but international interest was notably driven by resort properties in tourist favourites Boracay and Carabao.
The luxury resort Portofino Ocean’s Edge, launched last year on Carabao, was at the heart of demand. This is thanks, in part, to the area’s significant development in the last 10 years, with hundreds of resorts, hotels, restaurants, bars and shops built.
Indeed, the country’s thriving tourism sector is another key factor to Philippines’ investment appeal. In August, visitor arrivals surpassed 4 million for the first time. In December 2016, meanwhile, the country welcomed 576,638 tourists, its highest number for the year and 4.27% up on the same month in 2015. As a result, resorts such as Portofino Ocean’s Edge can offer a 10% return to investors.
The popularity of the Philippines is despite the country’s ownership restrictions for foreign buyers, with non-resident buyers not allowed to own land fully – although they can own houses and buildings, and land can be bought by a registered corporation.
Following the election of its new President in 2016, experts are expecting the restrictions to eventually be eased. Indeed, the mood is upbeat, with 90% of UAE-based Filipino expats in a recent study saying that now is the time to invest in their home country’s real estate.
Investor behaviour is linked to tourism in more ways than one. With East Asia the main source of foreign visitors, ahead of Korea, Japan, China and North America, investors in the country’s real estate match a broadly similar demographic: agents highlight a lot of interest from clients in China and South Korea.