Property News · February 2, 2017

Is Trump to blame for this Philippine property chill?


Signs that ‘America First’ is putting office real estate in the country last
An IT Park in the city of Cebu, Philippines. Kim David/Shutterstock
Only a week after being sworn into office, US President Donald Trump signed executive orders that impose extreme vetting procedures against citizens of predominantly Muslim nations, begin the dismantling of the Affordable Care Act, and reinstate a ban on American NGOs supporting reproductive rights.
Now there are signs that Trump’s protectionist rhetoric is proving to be more than just a hollow threat to the business process outsourcing (BPO) industry in the Philippines. Credit Suisse is reporting that office real estate, a sector massively driven by BPO firms, is at risk of a slowdown.
“Risk of slower occupancy ramp-up, or worse – cancellation of pre-commitments – for upcoming office space in the country seems to have been escalating in recent weeks,” according to a Credit Suisse note released Tuesday.
“Aside from our recent channel checks with property agents, there has been a constant flow of negative news citing uncertainties about U.S. President Trump’s protectionist rhetoric about outsourcing, which could slow down and/or delay expansion plans particularly for U.S. BPOs in the Philippines.”
More: Where does your country stand in a Trump presidency?
Credit Suisse went on to report that office supply will have an absorption rate of 30 percent in 2017 and 10 percent in 2018. “We think the momentum of pre-leasing has been slower,” the agency noted.
Charito B. Plaza, director-general of the Philippine Economic Zone Authority (PEZA), sounded the alarm last week, saying that BPO investors are “worried” and putting pledges on hold, pending the US president’s other pronouncements.
The Philippines accounts for 12.6 percent of the global market for business-process outsourcing (BPO), a USD23-billion sector.
“It’s a US-centric business,” Manuel Pangilinan, president of local telecommunications gaint PLDT, told Reuters in December. “To the extent that Trump compels, persuades or incentivises the BPO businesses to return … it will impact our business or the industry as a whole.”
Read next: The ultimate guide to SE Asian real estate in 2016

Source : property-report.com
Read more…Is Trump to blame for this Philippine property chill?

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