Insurance, finance firms coming to PH

MANILA, Philippines – There has been an increased interest from international finance and insurance firms looking to set up regional offices in Manila, said Finance Secretary Cesar Purisima.

In a #TalkThursday interview with Rappler on Monday, April 1, Purisima said more finance and insurance companies are looking to re-locate here. “They’re coming,” Purisima said about the companies, declining to name them as talks are still ongoing.

“I invite the foreign insurance companies here because cost of insurance here is high. If you want to start an insurance business, start it here. Collect the premiums while [the population is] still young. Why focus on the older (countries)?” he added, citing the Philippines’ young population.

It’s a similar trend that was noted by Lindsay Orr, Chief Operating Officer (COO) of Jones Lang Lasalle Leechiu, a global property consultancy firm. 

“The Philippines has been getting interest from non-BPO users,” he said during an interview with Rappler on November 29, 2012. Business process outsourcing (BPO) firms have comprised majority of demand for office space. 

“In 1995 to 1997 we were leasing offices to banks and financial institutions. They took up smaller floor areas [compared to BPO’s] but they made up the entire user demand. We are now seeing those institutions coming back into the fray. We’re getting an additional 50,000 to 70,000 square meters per annum of demand from the traditional office sector,” Orr shared.  

Other interested parties

David Leechiu, country head of Jones Lang Lasalle Philippines, said he is also noticing an international interest in commercial and manufacturing space from ‘unsexy’ businesses.

“We are seeing more traction with very unsexy and boring businesses. There’s a new player that’s looking to enter the Philippines in the poultry supply business. They’re not here because they’re going to grow chicken and export it to other countries, they’re going to grow chicken to address the growing demand for chicken in the Philippines. That kind of real estate demand will touch Metro Manila,” he said at a press conference.

The local real estate industry is expected to continue attracting foreign interest following the news that the Philippines received its first investment grade by credit rating agency, Fitch Ratings.

“This is great news particularly for the property market and especially since there have been a lot of foreign investors looking into the market. This tells foreign investors it’s about time to invest in the Philippines,” Karlo Pobre, research analyst at Colliers International, told Rappler on March 27.

Lylah Fronda, associate director market of property consultant Jones Lang Lasalle, echoed this sentiment saying, “The upgrade will encourage more businesses to expand and relocate to the Philippines. If last year’s total office space take up was around 400,000sqm, we are expecting a better performance this year — probably 20% more,” said Fronda.

“This will have a domino effect in the industry. As more international businesses open new offices in the Philippines, it will bring in more foreign workers who in turn will be looking for mid to high end accomodation. With a lot of job opportunities that will come available and possibly significant growth in expat community we see more demand in luxury destinations and leisure properties. Manila will continue to be a favorite among real estate investors and developers as a good alternative market in Asia,” she added. – Rappler.com