Economic growth to support property market 

The Philippine economy has shown its fastest pace of growth in over 40 years in 2022, providing a positive outlook for the country's property market, which has mirrored the boom-bust cycle of the country's economic output over the past decades, according to a report by BusinessWorld.

With this growth, net take-up of office space is expected to remain positive in 2023, and there will be a continued rebound in Metro Manila's pre-selling and secondary residential markets.

The government has taken an aggressive stance in attracting manufacturing investments, which is likely to result in greater absorption of industrial space across the country. The economy's personal consumption-led growth should also spur retail and hotel demand.

However, economic output is expected to grow at a slower pace of between 6%-7% in 2023 due to elevated inflation and a possible global economic recession. In 2022, office transactions in Metro Manila increased by 43% to reach 603,800 square meters (6.5 million square feet), while provincial transactions almost doubled to 222,800 sq.m. (2.5 million sq.ft.). Outsourcing firms accounted for nearly 70% of total provincial deals, with Cebu, Davao, and Pampanga covering nearly 90% of total provincial transactions in 2022.

Moreover, developers should prepare for greater take-up as manufacturing investments committed to investment promotion agencies take up industrial space and warehouses. Developers should also line up more projects in key growth areas outside of Metro Manila. The completion of 750,300 sq.m. (8.1 million sq.ft.) of new office space was recorded in 2022. From 2023 to 2026, the annual delivery of about 555,000 sq.m. (6.0 million sq.ft.) of new supply is expected.

Meanwhile, Colliers recorded the completion of 9,000 condominium units in 2022, bringing Metro Manila's condominium stock to 151,200 units as of end-2022. From 2023 to 2025, the annual average delivery of 6,700 units is projected. Residential take-up has picked up, with demand in the pre-selling market rebounding as about 20,000 units were sold in 2022, from a take-up of 13,300 units in 2021.

Lastly, data from the Department of Tourism (DoT) showed that foreign arrivals reached 2.65 million in 2022, 1,519% higher than the 163,879 arrivals in 2021, which was attributed to holiday-induced spending, return of more Filipinos working abroad, and the surge in Meetings, Incentives, Conferences and Exhibitions (MICE) activities. Colliers recorded an average hotel occupancy of 51% in 2022, up from 44% in 2021 and 20% in 2020. The DoT expects foreign arrivals to reach 4.8 million in 2023, indicating the return of business travelers and in-person events.