DAVAO CITY — This city’s planning and development office has completed a new comprehensive land use plan that will be submitted to Mayor Sara Duterte-Carpio for approval before the end of the month.
Chief city planner Roberto P. Alabado III said the plan, to be observed for the next 10 years, addresses four concerns, namely: disaster risk reduction, climate change impact mitigation, transport system integration and sustainable development.

“Once you apply for… clearance, you are instructed to build your house or building according to the level where the floods rise the highest,” Mr. Alabado explained, noting that the city has seen floods as much as a meter deep.

The new plan, Mr. Alabado added, also requires commercial establishments to provide easements for loading and unloading of passengers in order not to impede vehicular traffic along main roads.

He said the envisioned new zoning ordinance will likely take effect early next year. — J. B. Escovilla

AYALA CORP. is looking to bid for the operation and maintenance (O&M) contract of an airport that will serve Cagayan de Oro, an area where the conglomerate is already building a mall and housing complex.
This comes on top of the firm’s interest in other infrastructure projects lined up by the government for privatization, marking a further foray out of its core businesses.

“We are looking at the new airport in Cagayan de Oro that will start operating I think in 2013,” Delfin C. Gonzalez, Jr., Ayala’s chief finance officer, told reporters last week, referring to the Laguindingan facility in Misamis Oriental, roughly 50 kilometers away from the existing Lumbia airport.

“It actually sits on a property that we donated to the government,” Mr. Gonzalez said.

“[Ayala] also owns about 500 more hectares around it,” he said. “We are also looking at participating in that so that it can also help to spur the development of [the area].”

The Aquino government has included the privatization of Laguindingan Airport’s operation and maintenance project among the 10 vital infrastructure projects to be opened for private investment under the Public-Private Partnership (PPP) program.

The 20-year operations concession is seen to reduce government expenditures and improve the quality of service at the airport.

According to PPP Center, the new airport on a 393-hectare property is seen to accommodate 1.2 million passengers per year based on its master plan.

The tender period had earlier been slated to end by next month but a government decision to review all projects up for bidding is expected to delay the contract’s awarding.

Ayala, through its subsidiaries, is already building a mall in the area via a joint venture. It is also developing a subdivision and is looking to construct a hotel as well, earlier reports show.

Ayala officials have said that the company is interested in other PPP projects offered by the government, particularly the Daang Hari-South Luzon Expressway road project.

“We need an operator partner [which is a] foreign [firm],” Mr. Gonzalez said, when asked about the firm’s progress in bidding for the road project.

The interest in infrastructure comes as Ayala is looking to venture into other industries including power.

The conglomerate announced in March its bid to build a portfolio of over 1,000 MW in generating assets. It has already formed joint ventures with partners for coal, wind and hydroelectric power projects.
Mr. Gonzalez reiterated the company would spend P100 million in the next five years for its power ventures.

“But there is no immediate fund raising that we are looking at right now,” he said
Ayala’s first-half net income climbed by 12% to P4.9 billion over year-ago levels, propelled by its property, banking, water distribution and telecom units.

TAX RULES for two much-awaited investment vehicles will be finalized by next week, Bureau of Internal Revenue (BIR) Commissioner Kim S. Jacinto-Henares said.
The BIR is already crafting the revenue regulations required for the implementation of the Real Estate Investment Trust (REIT) and Personal Equity and Retirement Accounts (PERA) laws, she told BusinessWorld on Thursday.

After the tax rules are drafted they will be signed by Finance Secretary Cesar V. Purisima before being issued.

Ms. Henares explained that it was taking the BIR a lot of time building safeguards into the tax rules for the PERA Act or Republic Act 9505, which was signed into law in 2008.

“PERA is a difficult tax administration law. It involves giving tax credits, which is open to a lot of fraud,” she said.

“The tax credits can be forged, falsified or traded. We want to ensure that only qualified people get the tax credits,” she added.

The law encourages Filipinos to save for their retirement by granting income tax credits equivalent to 5% of their total PERA contributions. All income earned from PERA investments are likewise tax-exempt.

The REIT Revenue Regulations, meanwhile, once finalized by the BIR, will have to take a detour to the Congressional Oversight Committee on the Comprehensive Tax Reform Program, Ms. Henares noted.

Legislators announced last month that they wanted to review the required public float granted to REIT ventures, stock corporations that pool investor funds to manage real estate assets.

Ms. Henares admitted this was a “source of delay,” pushing back the target release date of the REIT rules to July from June.

Finance Undersecretary Gil S. Beltran has said, however, that legislators cannot do much as the REIT Act had already become law in 2009. It is also the BIR’s jurisdiction to interpret the Implementing Rules and Regulations issued (IRR) by the Securities and Exchange Commission (SEC) in May, he claimed.

According to the SEC, REITs must have a 40% minimum public ownership, increasing to 67% after three years. This was the compromise set after the Department of Finance wanted a higher float of 51%, while the private sector requested for only 33.33%, as initially set in Republic Act 9856 or the REIT Act’s IRR.

Legislators had raised concerns that a high minimum float requirement would dissuade companies from participating in REITs, which the government says will help deepen the country’s capital markets.

Several property giants have already expressed interest in REIT ventures. These include SM Prime Holdings, Inc., the country’s largest mall operator, Ayala Land, Inc. and Gokongwei-led Robinsons Land Corp. — Diane Claire J. Jiao

MANILA, Philippines – The world’s largest commercial real estate services firm expects the Philippine property market to remain upbeat, largely due to good fundamentals both as far as the local economy and the real estate sector are concerned, as well as poor conditions in many neighboring countries.

CBRE Philippines chairman and CEO Rick Santos said in a briefing that the Philippines remains an attractive place for locators, with the country having some of the lowest lease rates in the region. “The Philippines has some of the highest yields and demand for office space in Asia. The local office sector also has one of the best fundamentals in the region. We are seeing the start of a projected upscale in the Philippines,” he emphasized.

Aside from good fundamentals in the economy and in the real estate sector, Santos noted that the cost of office space in Manila is around 12 to 14 times less than that of Hong Kong. “It is very cost effective here,” he said.

The average lease rate for office space in the Philippines is around $20.2 per square meter per year compared to Hong Kong’s $89.92 and Kuala Lumpur’s $28.32.

The downcycle in the United States that has resulted in more businesses looking to outsource their business processes to countries like the Philippines will also augur well for the latter in the coming years, Santos added.

He said he expects office take-up in the Philippines to exceed 300,000 square meters this year compared to Singapore’s 150,000 square meters.

“We have not seen this much interest in Asia, and more particularly the Philippines, in recent years,” Santos stressed.

He noted that the Philippine real estate sector remained as a major contributor of growth, with the domestic economy still performing better than some of its neighboring countries. “Countries like Thailand and Japan are laggards due to its population already being adult, not to mention the calamities in Japan that are causing challenges and negative growth numbers, and the upcoming big election in Thailand,” he said.

Santos likewise noted that tourist arrivals are picking up in the Philippines. “Within the rest of Southeast Asia, the Philippines is back on the map as as investment destination. The key, however, is to keep inflation rates under control. But interest and mortgage rates are coming down, banks are awash with liquidity, and the country has a strong banking sector,” he said.

“We see great metrics in the business process outsourcing (BPO), tourism, remittances, gaming sectors in the Philippines. There is so much good new here,” he added.

For his part, CBRE vice chairman for global corporate services Joey Radovan noted that the Philippine BPO global share has much potential to grow to as much as 15 percent from eight percent as of last year.

The local BPO sector posted revenues of 4.2 percent of gross domestic product (GDP) in 2010. “Revenues reached $8.9 billion and are expected to triple to $25 billion by 2016,” Radovan said.

He also revealed that total number of BPO employees amounted to 525,182 with projections of an additional 500,000 over the next five years, translatingto the need to build close to three million sqm of office space.

Radovan also characterized the Philippine office sector as one with rising lease rates and falling vacancy rates.

He said Manila office rents are the second lowest in the Asia-Pacific region in the first quarter of this year at $20.2 per square foot per year.

“Office lease rates of major business districts continue to improve. Vacancy rates are also falling in all major Metro Manila business districts. There is also sustained office demand for both BPO and traditional offices,” he added.

CBRE Philippines reported that the Metro Manila office market is experiencing a steady rise in lease rates as vacancy rates continue to fall to single-digit levels as of the second quarter of 2011.

SIGNS IN Registry of Deeds offices announce that computerized processing for the issuance Transfer Certificates of Title (TCT) is being introduced, therefore, “Please bear with us,” “Sorry for any inconvenience,” and it can take some 20 working days of best effort—meaning, no commitments—before new titles can be issued; and should there be computer glitches, like the recent one that lasted two days, nobody would know. Is this what the public will get from computerization?

Yet the fees, collected up-front, are charged in full and have increased. A big share of this fee is for IT service, presumably going to the computerization service provider, Stradcom, the same company mired in intra-corporate controversy at the Land Transportation Office.

When one is given an assessment, he can do nothing else but pay. No fee schedule is posted anywhere for the public’s information. Is the public not entitled to know the cost of the service?

And there are multiple documentary requirements asking clients to photocopy this and that; get certified true copies, with LRA keeping the original. And when one has to go to a number of Registry of Deeds offices requiring the same documents, he has to submit more original certified true copies. A fee is charged for every certified true copy, and it takes time to issue one because the computer cannot be rushed. In my my case, I was told to go back after three to five days for my copies. Shouldn’t computerization get things done faster instead of putting up roadblocks?

I understand that the transition from the old manual system to computerization requires some adjustments. I asked a friend in the real estate/property development business, who had  regular dealings with different Registry of Deeds offices, if he knew some people in the LRA. He introduced me to them. The connection helped. I submitted my documents to the Quezon City RD on May 18, 2011 and to the Caloocan City RD on May 27, 2011. On June 16, 2011, I was able to receive the new transfer certificates of title I applied for. I didn’t make any follow-up with the Caloocan RD the week I was told the document was ready. It was available when I went to get it, seemingly its processing taking a shorter period than the 20 or so working days I was told it would take. But I had some help. How about those who don’t and have only themselves to depend on.

There is need for the LRA to see how it delivers its service to the public and justify all the fees it is charging. Efficiency and transparency are the call of the day.

—DANILO S. VENIDA,
Quezon City

MANILA, Philippines – The House of Representatives has approved on third and final reading a bill allowing the disposition of government-owned lands for socialized housing projects for poor Filipinos to address the country’s housing problem.

Passed was House Bill 4578 or the “Idle Government-Owned Lands Disposition Act of 2011,” which mandates the Local Government Units (LGUs) to undertake urban development and housing projects for the benefit of the underprivileged and homeless citizens.

Under the measure, 10 percent of government-owned lands to be sold, alienated and encumbered for development purposes shall be segregated or allocated for socialized housing projects.

The bill directs the conveyance of the segregated land or fund to the National Housing Authority (NHA), for lands owned by the national government intended for the development of socialized housing projects.

However, for lands owned by the LGUs, the segregated land or fund shall be retained by the LGU concerned to be utilized exclusively for its socialized housing projects.

The measure authorizes the NHA and the local government unit to enter into a joint venture agreement or other similar agreements with private developers and non-governmental organizations engaged in housing production.

“The right to a decent housing of every Filipino is enshrined in our Constitution. Section 9 of Article XIII states that the State shall, by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban and land reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas,” said Nueve Ecija Rep. Joseph Gilbert Violago, one of the authors of the bill, said.

Ilocos Sur Rep. Eric Singson, Jr., another author of the bill, said there is a need to improve the government’s housing program in order to make available at affordable prices decent housing and basic services to poor and homeless families all over the country.

“The acute housing problem compounded by indiscriminate squatting in the urban areas necessitates a forward-looking approach to answer this basic need of the people,” Singson said.

Quezon City Rep. Winnie Castelo, another author of the measure, said there should be continuing update to policies designed to address the problem of housing for the underprivileged if not for the homeless whose number or population has swelled through the years making the problem a constant menu in the country’s development agenda.

“Consistent with a rationalized land use plan, housing for the underprivileged could be set aside from government-owned lands for homeless Filipinos,” Castelo said.

Muntinlupa Rep. Rodolfo Biazon, also an author of the bill, said the housing needs of the underprivileged and homeless in the country “is a problem that continuously paints a stark picture for the country’s economic managers and housing czars.”

“Our government is fast running out of available residential lands for its huge and ever-increasing population.  It has to pursue a rational land use plan that will entail the rational allocation of the government’s scarce land resources to include housing for the underprivileged,” Biazon said.

Bacolod City — The Government Service Insurance System (GSIS) has put its housing loan program on hold as it is faced with total unpaid loans of P11 billion for 17,000 house-and-lot packages nationwide.

“The GSIS means business in protecting the resources of its stakeholders, which may have been abused in the past,” said its chairman, Daniel Lacson Jr.

“The current board and administration have decided to immediately stop additional housing loans until a comprehensive policy and program can be introduced to dispose of all the non-performing assets amounting to P11 billion or more,” Lacson told the Inquirer.

He said the 17,000 properties were now with the GSIS asset and disposal management group for disposal. The GSIS has been providing housing loans since 1954 and over the years has come up with different programs, Lacson said.

In the beginning, the GSIS provided loans to members only but later it began extending loans to developers and then got involved in real estate development, buying land and building houses and selling these as house-and-lot packages, Lacson explained.

In a report to the GSIS board, consultant Mel Alonso said the GSIS did not have adequate manpower to support its various financing activities, which resulted in its failure to collect payments. The GSIS could dispose of its assets through government agencies engaged in housing programs, banks or private developers, Alonso said.

“In short, the board wants closure in terms of policy with regard to the housing program as well as other activities of the GSIS currently having difficulties,” he said.

The GSIS, meanwhile, has foreclosed on a 5-hectare private cemetery in Hinigaran, Negros Occidental, following its owner’s failure to pay a P17-million loan, Lacson said.

The estate of Jose and Rosario Echauz used the P17 million loan obtained in 1999 to develop the property. When it was granted the loan, the Echauz estate promised to create a corporation with a paid-up capital of P25 million but when it registered the firm with the Securities and Exchange Commission, the paid-up capital was only P312,500, Lacson said. /INQUIRER

Exactly four weeks ago the whole Caraga region came to a standstill with surprise episode of a short lived hostage taking. News of the incident caught the attention of the national leadership that is sensitive to a hostage situation that it tries to avoid and handle like a plaque or virus. This time it involved a tribal group of young Manobo’s from the Municipality of Prosperidad in Agusan del Sur. All of the hostage perpetrators were minors. The hostage victims were teachers, parents and innocent elementary school students who were attending a public school graduation in a remote uptown Barangay.

The reason was an offshoot to a government none fulfillment to a previous agreement of land property dispute and inter tribal violent conflagration that incarcerated a tribal leader “for another crime that also resulted to a previous hostage taking of 79 persons in the year 2009”. Legally, there should have been no agreement at all in the first place if there was a crime committed unless innocence is established and resolved by the court.

After a marathon negotiation and nerve trading that sidelines our national government and police officials from their busy schedules in the national capital region, the crisis was resolved without a bloodshed and violence. Not after some concessions and government assurance were signed. All hungry and sickly hostages were released unharmed.

But the incident hugs the headlines for five days and captured the anxiety of the public and the foreign community on the peace and order situation of this country. The national leadership breathed fresh air from the peaceful resolution of the conflict. Never mind if time and government resources were wasted as long as loss of lives were prevented. It was lesson No. 2 for the Aquino government in handling a hostage situation.

What are the concessions agreed and promised? Only those that who signed the documents and received copies really knows until a next hostage taking takes place shall the content of the agreement be made public. Those agreements must either be legal or fulfilled?

But there is logic and reasons that meets the public eye on the background of the issues and treatment of the cultural minorities in Agusan del Sur. The incident could have been prevented if and when the equal protection to our laws and respect to tribal ancestral domain has been resolved in accordance with Article X11, Section 5, of the Philippine Constitution that provides that “the state subject to the provisions of the Constitution and national development policies and progress shall protect the rights of indigenous cultural communities to their ancestral lands to ensure their economic, social and cultural well being”. The implementation of the laws under Republic Act No. 8371, otherwise known as the “Indigenous Peoples Right s Act of 1997” is not clear and resolved in favor of the cultural minorities.

Many of the vast tracts of forest land in Mindanao are awarded to illegal loggers, ranchers and industrial agricultural planters. It has displaced the minorities and left a protracted struggle and agitation for discontent over the deprivation of many of our tribes that lives in the mountains of Mindanao from their ancestral lands. Exploitation of the natural resources and land grabbing often displaced the cultural minorities from their community dwellings and affects their livelihood. A situation most welcomed by the left to expound their cause and gain sympathy and foothold in the countryside.

The Manobo’s are the biggest of the ethnic groups in the Philippines in terms of their relationships and name of groups that belongs to this family of more than 749,042 in population from the 1994 census of the National Statistics Office occupying the areas from Sarangani to the Mindanao mainland in the provinces of Surigao, Agusan del Sur, Davao and Bukidnon.

They have adapted to the various ecological niches in the interiors of Mindanao. Their orientation is upland farming, hunting, handicrafts and gathering of trees for industrial use. Their rich culture in weaving and tapestry are arts to behold and helps connect the present generation of Filipinos to the past. It is a great source of eco-tourism and pride. Ped T. Quiamjot.

GENERAL SANTOS CITY—The Tampakan mining project of Sagittarius Mines Inc. is expected to spur additional investments in the region from local and foreign companies once it becomes operational in 2016, a local official told reporters over the weekend.

“This will definitely transform South Cotabato into an industrial, residential and commercial province. Right now, interested investors are planning of owning properties here in anticipation of more vibrant economic activities in the province once Tampakan commences operations in 2016,” Tampakan Mayor Leonardo Escobillo said.

He said the project had triggered an appreciation in the price of land from P150,000 per hectare to P1 million. “A number of investors have actually started landbanking in the province in preparation for 2016,” he said.

Escobillo said the SM group of retail tycoon Henry Sy had expressed to locate in the province. “Just recently, a representative from SM Cebu inquired for a possible location in General Santos but it did not say if its project would be an expansion of SM malls or if it would be a residential project,” he said.

He said former vice presidential candidate Bayani Fernando had bought a piece of land in Koronadal, the capital.

He said the mining project boosted Tampakan revenues and transformed it from a fourth-class to a second-class municipality in 2010.

Sagittarius Mines earlier said it hopes to obtain an environmental compliance certificate this year. It is preparing a study on the environmental impact of the mining project and start public consultations in the third quarter of this year.

Sagittarius Mines data showed that it had contributed P2.4 billion to the Philippine economy in 2010 in terms of employment, annual wages, government taxes, purchase of goods and services, and community partnerships, sponsorship and donations.

The project is expected to significantly contribute to the economic development of the country. Once operational, revenue stream is estimated at $37 billion, or P1.85 trillion, over the life of the mine.

GENERAL SANTOS CITY — A mission to the International Food Exposition (IFEX) scheduled to be held in Metro Manila next month is expected to generate P500 million worth of new investments for Central Mindanao, a regional Department of Trade and Industry official said here earlier this week.

The economic development committee of the Regional Development Council-12 had earlier identified six focus industry clusters as a strategy to further prod economic activity in the area.

Ethel L. Gumana, National Economic Research and Business Assistance Center chief, said in a phone interview that Central Mindanao is among the featured regions in the IFEX, slated to be held on May 12-14 at the SMX Convention Center in Pasay City.

“Our delegates [from the business community] hope to forge joint venture agreements with multinational firms during the business matching activity, ” Ms. Gumana said.

“There will also be project proposals to the different embassies,” she added.

Ms. Gumana said Central Mindanao’s participation in IFEX is in line with efforts to promote awareness of the region’s business opportunities.

It also seeks to forge links between project proponents and potential local and foreign investors, as well as funding sources, she added.

“Hopefully, this would lead to the influx of investments in the region and the creation of employment opportunities for the people of Central Mindanao,” Ms. Gumana said.

Also known as Region XII or Soccsksargen, the region consists the provinces of South Cotabato, North Cotabato, Sultan Kudarat and Sarangani, as well as the cities of General Santos, Koronadal, Tacurong, Kidapawan and Cotabato.

The six focus industry clusters earlier identified by the regional development council are coffee, muscovado, tourism, processed fish, processed fruits, as well as information and communications technology.

The committee identified the clusters based on their potential market demand, regional coverage and social benefits. Other products that were also recognized to have growth potentials in the region are palm oil, art crafts, crabs, corn, coconut, rice, processed meat and hogs.

Luwalhati R. Antonino, chairperson of the Mindanao Development Authority, had earlier urged Mindanao producers to expand their markets by forging marketing links or trade partnerships.