- International visitors account for 8.2% of GDP (Philippine Statistics Authority)
- Domestic travellers spend 6 times as much as international tourists (Department of Tourism)
- 3 Filipino islands make it into World’s Best Islands list (Time and Leisure)
- Investors rush to meet surge in demand for high end resorts (Property Frontiers)
The 7,000 islands of the Philippines provide a stunning landscape of sandy beaches, lush vegetation and sparkling seas. Teeming with aquatic life, as well as reefs and shipwrecks ideal for snorkelers and divers, the islands offer a tropical paradise that is charming holidaymakers and investors alike.
JLL’s newly published Global Real Estate Transparency Index 2016 shone the spotlight on the Philippines this month, when it found that the Asia Pacific region is the most improved in the world for real estate transparency. Meanwhile, Time and Leisure magazine has included three of the islands – Palawan, Boracay and Cebu – in its World’s Best Islands list.
The delightful natural setting of the Philippines is certainly proving a winner with holidaymakers. International visitor numbers have risen to the point that spending by foreign visitors accounted for 8.2% of gross domestic product (GDP) in 2015 (equating to US$6.6 billion) and meaning that tourism is now officially the country’s third biggest export, according to the 2015 Philippine Tourism Satellite Accounts from the Philippine Statistics Authority. This increase in tourism has been marked in recent years: only five years ago, tourism accounted for just 4.3% of GDP.
The rise in visitor numbers has carried through into 2016. Department of Tourism data showed that international visitors increased by 8% in May 2016 compared with the previous May. In fact, the first five months of the year has seen international arrivals surpass the 2.5 million mark for the first time, representing a 13% increase over the same period in 2015.
Visitors are flocking to the Philippines from around the world. South Korea is the largest source of tourists at present, accounting for 1.3 million visitors in 2015 (25% of the total). The trend has held true so far in 2016, with South Korea accounting for 23.22% of visitors from January to April. The US comes second, accounting for 14.66% of international arrivals, with China in third place at 11.5%.
Hong Kong-based investment house CLSA has projected that the next few years may see Chinese visitors come to outnumber those from the US, following a rise in Chinese tourism to the Philippines of 62.44% in the year to April 2016. Philippine Airlines’ president and chief operating officer, Jaime Bautista, has echoed the sentiment, expressing confidence that the number of Chinese visitors to the Philippines could double in just three years. The airline has announced its intention to add another Chinese city to its range of destinations by the end of 2016 as a result of the rapidly increasing visitor numbers.
At the same time as international visitor numbers are rising to record levels, domestic tourism has also leapt. Tourism Secretary Wanda Corazon Teo is actively encouraging domestic travelers to discover more of their significant country, not least because Department of Tourism figures have shown that they spend six times as much as international visitors. Domestic tourists spent P1.5 trillion during 2015, compared with the P227 billion spent by visitors from abroad.
The increase in both domestic and international visitor numbers has created significant opportunities for investors in Philippines real estate. Ray Withers, CEO of specialist international property investment company Property Frontiers, explains,
“Demand for high end hotel accommodation in the Philippines has never been greater and the country is racing to increase supply enough to keep up with demand. With high quality new resorts required in key tourism hotspots, international investors are keen to buy into the Philippines now in order to be part of the wave of new construction that is required to service the increased level of visitors. JLL’s finding that the Asia Pacific region is the most improved in the world for real estate transparency has furthered this significant trend of international demand for resort investments in the Philippines.”
Portofino Ocean’s Edge resort is a prime example. The ultra-luxurious, 5* clifftop resort on Carabao Island, minutes by boat from top island Boracay, boasts a private jetty and helipad for stylish arrivals, an infinity pool, spa and wellness centre for perfect pampering and a restaurant, bar and cliff edge clubhouse for socializing. There’s also an idyllic private beach for making the most of the stunning scenery that the Philippines provides.
Investors can own their own piece of Portofino Ocean’s Edge resort for just USD 109,000, including 10% interest during construction (now underway) and expected 15% NET return (underwritten at 10% minimum). Investment in the resort also includes 14 days of personal use per year, for the ultimate lifestyle benefit.