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Here is a round up of the latest economic and property news with insights from Colliers Philippines. Read our analyses and recommendations on the different segments of Philippine real estate.

Dynamic economy a boon to property

An Inquirer poll of economists showed that the Philippines likely grew by 5.8 percent in the fourth quarter of 2024. It also showed a median estimate of 5.8 percent in 2024, up from the 5.5 percent gross domestic product (GDP) growth in 2023.

If realized, the 5.8 percent expansion is below the government’s projected growth of 6 to 6.5 percent. Analysts attributed the slower-than-expected pace of growth to adverse effects of typhoons in 2024.

Colliers view:

The Philippines remains one of the fastest growing economies in Southeast Asia.

The country’s dynamic business process outsourcing (BPO) sector recorded $37.5 billion in revenues in 2024, up from the $35.5 billion a year ago. Remittances from overseas Filipino workers (OFWs) continue to support economic growth and are partly driving retail, residential, and leisure demand across the country.

Data released by the BSP on Tuesday showed the public sector’s foreign borrowings from July to September this year went up by 36 percent from the $2.81 billion in the same period last year.

The federal and state governments’ tax revenue reached a total of 86.2 billion euros ($93.54 billion) last month, according to the ministry’s monthly report.

The Bangko Sentral ng Pilipinas (BSP) has been cutting interest rates and Colliers sees this having a positive impact on the Philippine economy. Lower interest rates are likely to result in lower mortgage rates which should help stoke residential demand across the country. We see lower mortgage rates eventually boosting demand in the interest rate-sensitive mid-income residential market (P3.6 million to P12 million).

Digital transformation to advance retail recovery

The Department of Trade and Industry (DTI) plans to hasten the country’s digital transformation, utilizing Artificial Intelligence (AI) and e-commerce.

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The push for digital transformation is important as the country aims to exit the Financial Action Task Force’s grey list. Trade Secretary Christina Roque is urging policymakers, business leaders and IT experts to collaborate in expediting digital transformation and enhancing financial ecosystems across the country.

Colliers View:

Improving the country’s digital framework is important in supporting the country’s retail sector, particularly the e-commerce subsegment.

In our view, mall operators and retailers need to enhance their e-commerce platforms to complement their brick-and-mortar retail spaces. A lot of foreign retailers have expressed interest in opening shops in the Philippines.

Based on latest Colliers Philippines data, the F&B (food and beverage) segment will likely account for nearly 40 percent of upcoming retailers, followed by fashion and beauty with 32 percent. This drive for digital transformation is important as mall operators and retailers need to amplify their omnichannel (online + physical) shopping strategies this year.

Foreign hotel brands betting big on PH

Luxury chain hotel Four Seasons is reportedly planning to enter the Philippines. Currently, there are 133 Four Seasons hotels and resorts in 47 countries.

Colliers View:

In our view, the proposed measure to allow foreigners to lease land up to 99 years from the current 75 years is a positive for Philippine hospitality.

The longer lease terms will make the Philippines more attractive to foreign hotel players.  More Philippine developers can partner with foreign hospitality brands, develop more accommodation facilities and convention centers across the country, and maximize the Philippines’ improving infrastructure backbone. This is important as the government has been aggressive in rehabilitating and modernizing airports across the country.

These efforts are essential especially with the Philippine government setting a lofty goal of attracting 12 million international visitors by 2028. In Metro Manila, foreign brands will likely account for 40 percent of the new supply from 2025 to 2027.

More non-tax revenues for infra dev’t

The Department of Finance (DOF) is privatizing idle public assets to generate more funds to aid national development. This is part of the government’s move to maximize the government’s non-tax revenue through privatization efforts. More than 20,000 non-performing assets are reportedly up for privatization.

Colliers View:

Raising additional funds is important as the government implements its social, economic and infrastructure projects. The government has been setting aside 5 to 6 percent of its GDP on infrastructure. Its public spending is likely to support the construction and/or modernization of more roads, airports, and railways.

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