PH housing sector risks still contained

RISKS from the Philippines’ housing sector remain contained despite overheating concerns given a rapid rise in prices, banking giant HSBC said.

In its Asean Perspective report released during the weekend, HSBC said that residential property prices in the Philippines had continued to rise over the past few years, due in large part to low interest rates and rising incomes.

It pointed out that Bank for International Settlements data showed that local residential prices had risen the most since 2010 within the Association of Southeast Asian Nations (Asean).

The Bangko Sentral ng Pilipinas’ (BSP) latest Residential Real Estate Price Index (RREPI), the bank added, also showed that home prices rose by 4.8 percent year-on-year in the second quarter from 2.1 percent in the previous period.

Rising housing prices are not just isolated in the Metro Manila area where the index rose to 5.1 percent during the quarter, HSBSC noted, pointing out that prices outside of the National Capital Region also rose 4.1 percent “as the Duterte administration’s ‘Build, Build, Build’ program has also contributed to

dispersing property developments outside of Manila.”

With this, HSBC warned that “the rapid rise in property prices thus raises some concerns over the health of the Philippine economy.”

“Banks’ exposure to the real estate sector continues to grow, both in terms of lending and investments, with a bulk of loans going to commercial real estate projects. Indeed,

possible sign that the economy in overheating,” it also said.

HSBC, however, believes that the housing sector’s risk to the economy remains contained for now as it notes that “non-performing loans in

the sector have consistently declined over the past few years, while the share of real estate loans to total loans have largely plateaued and even declined in recent quarters.”

Latest available data showed that banks’ real estate exposure increased by 11.2 percent to P2.139 trillion as of end-June, down from 18.6 percent growth a year ago.

HSBC also said that that while residential loans — which have a higher non-performing ratio compared to commercial real estate loans — had also been cited as concern, its research found that the rise in residential prices was mostly backed by sound fundamentals.

Supporting high residential prices, it said, were rising wages in light of declining unemployment, strong demand from overseas Filipino workers given the peso’s recent

US, the traditionally dominant military power in the region.

Other leaders attending include Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe.

But much of the focus will be on the RCEP as leaders seek to send a message in support of free trade. The deal groups the 10 ASEAN members plus China, India, Japan,

Jaime Augusto Zobel de Ayala is usually appointed to exercise the voting power.”

Incidentally, IMI’s ownership

S. Tan, senior managing director,

As IMI’s highest paid executives, Arthur R. and the four others were paid salary of P81.74 million and other income of P33.93 million in 2016; and salary of P89.12 million and other income of P36.77 million in 2017. This year, the company estimated the group’s pays and perks at P88.37 million and other income of P35.41 million.

“All officers as a group unnamed” received salary of P473.48 million and other income of P140.74 million in 2016; and salary of P585.75 million and other income of P152.43 million in 2017. Based on company estimate, they would be paid this year salary of P601.72 million and other income of P148.88 million.

According to IMI, it “has no other arrangement with regard to the remuneration of its existing

the compensation herein stated.”

IMI also disclosed that in 2008

received

as

depreciation, and robust foreign buying.

“Moreover, the BSP has proactively implemented macro-prudential measures to limit risks in the real estate sector,” it added, noting for example the setting of the maximum real estate exposure of banks to 20 percent of their total loan portfolios.

HSBC also mentioned that banks were also subject to a real estate stress test, which limits write-off rates on real estate to 25 percent to

withstand potential property price corrections.

Lastly, it noted that the BSP’s Circular 976 — issued in 2017 — demanded more transparency from banks by expanded reporting requirements on residential real estate loans. South Korea, Australia and New Zealand.

World leaders “should present a united front advancing trade liberalization in (the Asia-

to trade from the rising tide of global protectionism,” Rajiv Biswas, chief regional economist at IHS Markit, told AFP. annual meeting, the company’s stockholders approved P100,000 as director’s fee per meeting attended and P20,000 for every committee meeting attended.

Due Diligencer’s take

Listed companies should be required to disclose the results of their board meetings. By doing so, they would allow the public how the so-called independent directors (ID) are behaving inside the boardrooms.

Are these IDs

The use of the word “independent” to describe IDs is a misnomer. Listed companies should rethink the continued use of “independence” to describe them.

Why don’t these listed companies consider regularizing all IDs by getting them elected as directors? By regularizing, Due Diligencer is suggesting that “independence” does not apply at all to all IDs. As a matter of fact, the SEC should be the lead agency in reviewing IDs’ tasks inside the boardrooms. really independent?

should tell the public investors what IDs are for. They should be

the word applies to them.

Regulatory authorities should rethink the rules governing IDs, who are not elected but appointed. They are also among the highest paid company insiders who lay down company policies for implementation from the top, meaning the well-paid executives, down to

Why doesn’t the SEC require the disclosure of IDs’ performance inside the boardrooms? Just asking.