BSP to release commercial property price index
THE CENTRAL BANK will start to release a commercial property price index within the year as it broadens its watch on the sector, which an expert said could also help the industry establish better benchmarks and valuations.
“As part of expanding the surveillance on financial exposures of banks to, and price trends, in the property sector, the BSP (Bangko Sentral ng Pilipinas (BSP) will be releasing the Commercial Property Price Index (CPPI) within the year,” BSP chief Benjamin E. Diokno said at a briefing on Thursday.
The BSP currently releases quarterly reports on Residential Real Estate Price Index (RREPI), which monitors the changes in the prices of residential properties in the country.
The RREPI monitors prices of detached or attached houses, condominium units, duplexes and townhouses.
BSP Department of Economic Statistics Director Redentor Paolo M. Alegre, Jr. said at the same briefing that the Monetary Board will likely approve the publication of the report by the fourth quarter.
“The commercial property price index has yet to be approved by the Monetary Board so I cannot share any information yet with you, but the target is to release the index within the year,” Mr. Alegre told reporters.
He said the CCPI will likely be released quarterly with a lag of one three-month period, similar to the RREPI.
In the RREPI, Mr. Diokno said the central bank uses the appraised value of new housing loan applications or borrowers in plotting the index, with the growth rate of the index measuring house price inflation.
A rising index signals an uptrend in residential prices while a declining index indicates a downtrend.
“Together, these two indicators (RREPI and CPPI) may be used to monitor the developments in the Philippine property sector as a whole and their linkages with the other sectors in the economy,” Mr. Diokno added.
Joey R. Bondoc, associate director for research of Colliers International Philippines, said they expect the BSP to come up with data on prices of office spaces and mall rentals, particularly on the cost of office per square meter and lease rate of per square.
“The benefit (of the upcoming report) for the property market and in general is that we will be able to benchmark data better now because of this transparency. As of this time, we don’t have a lot of data in the market so they are opaque now,” Mr. Bondoc said.
The data could also help the sector, developers and investors get better valuations of commercial spaces, he said. Currently, analysts look at transactions and the movement of prices of office spaces sold and mall spaces being rented out to estimate the costs of these properties.
“Aside from those, there’s no other way for us to track because there’s no single government agency that regularly releases data on these prices,” Mr. Bondoc said.
Home prices in the country inched up by 0.8% in the last quarter of 2020 from the preceding three months, bouncing back from the 0.4% slump in the third quarter, the latest RREPI released in March showed.
The growth rate was lower than the 10.4% logged in October-December 2019 and was the second slowest since the 0.5% rise in the last quarter of 2018. — Beatrice M. Laforga
