Bir drive bears fruit

A recent report from the World Bank has shown that the Bureau of Internal Revenue has succeeded in its program that requires all cigarette packs being sold in the country to have tax stamps.

WB data covering the week of Aug. 23 to the week of Nov. 29 this year revealed that over 90 percent of cigarette packs in retail outlets adhered to the Internal Revenue Stamps Integrated System (Irsis ). Compliance during the week of Nov. 29 was higher, with about 96.1 percent of cigarette packs bearing tax stamps and all 13 brands being monitored having at least 90 percent of their inventory bearing the stamps.

The brands Boss, LA and Plaza had 100-percent compliance, while the 10 others—Camel, Champion, Fortune, Hope, Mark, Marlboro, Mighty, More, Philip Morris and Winston— had over 90 percent of their cigarette packs with stamps, the data revealed.

There was a 100 percent Irsis compliance in Bulacan, Pampanga and Pangasinan; 99.8 percent in Metro Manila; 93.5 percent in Quezon province; 90.2 percent in Negros Oriental; 85.7 percent in Laguna; and 66.7 percent in Cebu and Nueva Vizcaya. In Davao del Sur, only 30.3 percent of cigarette packs in retail outlets bore stamps.

The BIR had ordered that all packs of cigarettes produced in the country since Dec. 1 last year must be affixed with tax stamps, so that only stamped locally made cigarettes should be sold in the market by Mar. 1 this year. As for imported cigarettes, all packs must bear tax stamps starting April 1.

Irsis is aimed at ensuring the collection of the correct excise taxes on tobacco products.

According to BIR Commissioner Kim Henares, the small percentage of cigarettes in the market that do not bear tax stamps may not necessarily be illegal in the sense that they have not paid the proper excise taxes since that there may be old stocks of unstamped cigarettes still being sold.

While a lot remains to be done, we should commend the BIR for helping raise much-needed funds for the public coffers via a successful implementation of the tax stamp program. Worth mentioning also is the cooperation of the local tobacco industry to make the program a success.

Property trends

The trend for the Philippine office market sector is robust, with demand from the business process outsourcing (BPO) industry still strong, as a result of which is that vacancy is low and rental rates are holding even with massive new supply.

According to the latest report from real estate consulting firm Pinnacle, the BPO industry is expected to end the year with 1.2 million employees, nearing next year’s goal of 1.3 million jobs. The industry generated total revenues of $18.9 billion last year, growing by 15 to 18 percent this year. The 2016 revenue target is $25 billion.

Pinnacle noted that revenues from the BPO industry are projected to overtake dollar remittances from overseas Filipinos in two years, citing an HSBC economist. The report also quoted industry sources as saying that the BPO sector is not gearing up the next 10 cities, namely Baguio, Davao City, Dumaguete, Iloilo City, Lipa, Metro Bulacan (Baliuag, Calumpit, Malolos, Marilao and Meycauayan), Metro Cavite (Bacoor, Dasmariñas, and Imus), Metro Laguna (Calamba, Los Baños, and Sta. Rosa), Metro Naga (Naga and Pili), and Metro Rizal (Antipolo, Cainta and Taytay).

Pinnacle Research has also monitored a phenomenal take up of around 200,00 square meters of office space in the last three months, most of which were pre-leased. Meanwhile, the overall vacancy rate of major business districts in Metro Manila is still below five percent even with new buildings coming online, the report added.

For the residential sector, Pinnacle noted a wide range of choices, a growing rental market, and slightly increasing prices despite competitive sales.

The report emphasized that this segment of the real estate market is the most competitive at present since a lot of players have been cashing in from this very profitable property sector.

Top players are not shying away from competition, Pinnacle stressed. The SM Group for instance is selling an annual average of 20,000 units starting next year while the DMCI group has announced that it would launch 14,000 units next year.

But the residential market is not just the condominium market, where there are talks about a property bubble. The condo market, the report revealed, is only 27 percent of all licenses to sell issued by the HLURB based on a nine-year average. Open market subdivisions and townhouses comprise 22 percent of the market, economic housing 27 percent, and socialized projects, 24 percent.

NEDA, according to Pinnacle, estimates the housing need at 800,000 per year, of which close to 400,000 households annually can afford to buy housing units and the remainder mainly from the informal settlers sector. Private real estate developers typically target to carve a market share from this 400,000 per annum demand for housing.

The Pinnacle report cited the Ayala Group, under the Amaia brand, as among those that have set their sights on economic housing, especially after the HUDCC increased the economic housing loan limit from P1.25 million to P1.7 million. Ayala’s Bella Vita brand is also making inroads in the socialized market, the report added.

For the retail market, Pinnacle cited the further expansion of big players and the proliferation of different retail platforms.

Pinnacle director for research and consulting Jojo Salas said the retail market is dominated by big players like the SM Group, Robinsons Group, and Cosco/Puregold group. The SM Group has 55 stores, 41 SM supermarkets, 43 SM Hypermarkets, 127 Savemore stores, and 27 Waltermart stores. The group reopened the three Cherry Foodarama stores it recently acquired, even as it has teamed up with the Indonesian Alfamart for the operations of an initial 50 minimarts and has entered into a joint venture with DoubleDragon to put up 100 CityMalls.

Robinsons Land Group has 37 malls and operates more than 400 Ministop stores. The Cosco/Puregold group has 36 stores and plans to open eight more in the nex three years.

But other property developers Ayala Land and Megaworld are not to be left behind. The report revealed that Ayala plans to open at least five new shopping malls in the next few years, while Megaworld is putting up 20 malls in the next five years.

Another exciting sector is the hotel and gaming market, the Pinnacle’s Real Estate Market Insight for Dec. 2015 noted. The Robinsons Land Group is steadily beefing up its Go Hotel Brand with nine sites at present. The Filinvest Group is expanding its hotel portfolio and intends to increase its rooms from 1,063 to 5,000 by 2020 through Chroma Hospitality. Meanwhile, the Ayala group plans to have a portfolio of 6,000 hotel and resort keys by 2020. The Rockwell/Lopez group opened its first Aruga hotel-serviced apartments in Rockwell and is looking for possible expansion sites. Red Planet now has 10 hotels but plans to have 10 more in the next five years.