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Audi Q5 2.0 TDI: Executive chic in award-winning mid-size package

Text and photos by Kap Maceda Aguila

MUCH fanfare has surrounded the enthroning of the Q8 as Audi’s preeminent SUV. Supplanting the Q7, the mid-size Q8 is imagined by the Ingolstadt-based premium car maker as “[uniting] the elegance of a four-door luxury coupe with the practical versatility of a large SUV than can be used for both business and leisure.”
Perhaps lost in the powerplay between the two perfectly executed vehicles is the Q5. The approximate midpoint in heft for Audi may not hold the limelight or command center-stage importance, but I sincerely believe it behooves car buyers to take an earnest look at it if they’re perusing the price point. Consumer Reports concurs that it is “one of the best choices among compact luxury SUVs.”
Additionally, Kelley Blue Book, the California-based auto valuation and research company, gave the Q5 the Luxury SUV Best Buy award last year, and its inaugural 2019 Compact Luxury SUV Best Buy plum — a unanimous first pick in the latter.
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• The Q5 is blessed with an exterior profile and sheet work that exude confidence in a businesslike manner. It doesn’t struggle to get your attention; it just does. The four rings seated on the trapezoidal grille are pretty much you need. Flanked on both ends by smart-looking headlamp assemblies marked by DRLs (and we know that Audi helped pioneer this safety innovation), the front fascia is just an eyeful without it being gaudy.
• From the side, the Q5’s character line extends seamlessly from headlamp to tail lamp, passing above the door handles. A crimp on the lower part of the doors imbues a sexy, dynamic characteristic.
• It would also please buyers to know that the Q5 has been awarded five stars in the Euro NCAP (New Car Assessment Program), which ranks it among the safest in its class in terms of occupant protection, child safety, pedestrian protection, driver-assistance systems, and crash safety. It also garners five stars from the National Highway Traffic Safety Administration of the US.
• The cabin is spacious and comfortably appointed — again, without going overboard. It’s sometimes easy to be overwhelmed with a panoply of buttons, switches, and whatnot. Audi has made the Q5 very legible and intuitive.
• Invariably, the driver will be captivated by Audi’s amazing Virtual Cockpit. A large 12.3-inch LCD screen supplants traditional analog instrumentation. The driver can access a number of indicators (and views) using buttons on the multi-function steering wheel. A classic view reproduces an analog tachometer and speedometer, latency-free; Infotainment Mode reduces the size of these gauges to accommodate a navigation map, telephone information, radio, or audio list.
• A large MMI terminal lends itself as the main control interface, linked to the 8.3-inch fixed display, situated ideally to be just out of the windshield view. A touchpad with haptic feedback, first seen in the Q7, is complemented by a rotary pushbutton. The driver can use this pad to input “handwritten” entries and other gestures.
• A torque-rich 2.0-liter TDI engine blurts out 190hp and 400Nm, and pairs to a seven-speed automatic transmission which you can choose to override with the shift paddles behind the steering wheel. I observed a fuel economy figure in the neighborhood of 15 kilometers per liter in light to normal traffic. The system up-shifts below 2,000rpm during normal duty, which proves to be a fuel-saving move. But not to worry, there is much torque (and driving fun) to be had even below this rev mark. Audi’s proprietary quattro-brand all-wheel drive promises better steering and acceleration poise, while a new start-stop system seamlessly switches off the engine during coasting to aid fuel economy. An auto-hold function, which engages the brakes when the car is stationary, is especially useful when on inclines. Never be antsy about them again.
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• I may be nitpicking (or lazy) here, but I expected powered steering-wheel adjustment.
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• Executive SUV, thy name is Q5.

Bluffer’s Box

Audi Q5 2.0 TDI
Price: Available upon request
Engine: 2.0-liter, inline four turbocharged diesel with common rail injection and exhaust gas recirculation; 150 hp @ 4,200 rpm, 320 Nm @ 1,500 — 3,250 rpm
Transmission: Seven-speed S-Tronic
Drivetrain: All-wheel drive (quattro)
Wheels/Tires: 18 inches, 235/60
Key features: Audi Drive Select, Apple CarPlay and Android Auto compatibility, adaptive air suspension, ambient lighting, powered tailgate, Audi Virtual Cockpit, touchpad, multifunction steering wheel, Bang & Olufsen Sound System with 3D sound.

Ayala Automotive fuses sight, sound in Art Fair piece

IAN Carlo Jaucian’s “Car Keys” was the featured work of Ayala Corporation (AC) Automotive in the 2019 edition of Art Fair Philippines held on Feb. 22-24 at The Link in Makati City.
Mr. Jaucian’s work repurposes a car wheel into a “vinyl record” being played on a contraption resembling a gramophone. The device relies on an infrared proximity sensor to measure topographical differences on the outer surface of the spinning wheel. The data gathered are translated into ASCII numbers, then relayed to a computer keyboard where it gets interpreted into digital music.
AC Automotive in a statement called the piece “an amalgamation of visual and musical symmetry . . . bridging the gap between harmonious visual design and cyclic music through the language of numbers.”

Ayala Corporation (AC) Art 2
Ian Carlo Jaucian’s “Car Keys” repurposes a car wheel into a “vinyl record” being played on a contraption resembling a gramophone.

It added “Car Keys” shows “how passion can drive the seemingly cold and calculating precision of automobile engineering and design into unexpected — and often amazing — outcomes.”
Art Fair Philippines, which finished its sixth annual staging, features modern and contemporary visual art in the country.
AC Automotive distributes Volkswagen, Kia and KTM vehicles in the Philippines, as well as represent the largest dealership networks for Honda and Isuzu. The company manages 92 dealerships across the five brands, owning 27 of these.

Dashboard (02/27/19)

Chevrolet Trailblazer

Low down payment offered on select Chevys

PHILIPPINE Chevrolet distributor The Covenant Car Company, Inc. (TCCCI) said it is offering all-in low down payment options on select Chevrolet models.
Down payment for the Chevrolet Trailblazer 4×4 Z71 A/T is P98,000; Trailblazer 4×2 LTX A/T is P138,000; and Trailblazer 4×2 LT A/T is P118,000.
The Chevrolet Colorado 4×2 LTX A/T can be bought for a down payment of P148,000 and the Colorado 4×2 LT A/T for a down payment of P88,000.
The three variants of the Chevrolet Sail — the 1.5L LTZ A/T, 1.5L LT A/T and 1.3L LT M/T — are offered low down payment options of either P58,000 or P68,000. Also available on a down payment of P58,000 is the Chevrolet Spark 1.4L LT M/T.
For the Chevrolet Trax LT A/T and Trax LS A/T, down payment options are P108,000 and P88,000, respectively.
TCCCI said all purchases come with a free Chevrolet-Caltex SavePlus Card.

Ford owners can win prizes in service promo

FORD Philippines said around 350 Ford customers who have their vehicles serviced at any Ford dealership get the chance to win a trip for two to Thailand, as well as other prizes.
Customers who purchased their Fords between Jan. 1, 2010 and Dec. 31, 2018 qualify for the promo. The vehicles must be serviced by any Ford dealership between Feb. 1 and April 30, and should have a minimum single-receipt purchase of P10,000 on parts and labor.
Other prizes are an Apple iPhone XS Max, oil and oil filter packages, and exclusive Ford-branded merchandise. The promo runs until April 30, the raffle draw will be held on May 10.
“This latest service promo is part of our commitment to reward our customers especially those who have patronized our after-sales products such as parts, accessories, and service,” said Joyce Laxamana, director of Ford customer service division.

Toyota Vios

Toyota Vios monthly fee now lower for OFWs

TOYOTA Motor Philippines (TMP) announced special financing packages for Overseas Filipino Workers (OFWs) buying the Toyota Vios.
Offered through Toyota Financial Services are monthly payment schemes as low as P7,394 for the Vios XE CVT (50% down payment, 60 months to pay).
To avail of the packages, TMP said OFWs (including seafarers) may visit the Vios display at the SM Mall of Asia that runs until March 6, and at Duty Free Philippines Fiesta Mall that runs until March 3. Applicants need to present their OWWA-issued OFW ID or MARINA-issued seaman’s book, contract of employment, certificate of employment, pay slip for the last three months, and proof of remittance.

When having a local manufacturing facility is a disadvantage

I’m a fan of automakers that put up and operate a manufacturing plant in the Philippines in spite of the many challenges that come with it. Even if electricity and labor are relatively more expensive in this country than in other Asian territories, some car companies doing business here still choose to assemble a vehicle or two locally.
For sure, having a manufacturing facility in the Philippines has its advantages, too (including certain tax breaks and the huge PR points earned from the perception that the undertaking is helping generate jobs for Filipinos), but it does seem the disadvantages outweigh them. Especially if you’re a brand whose limited product line doesn’t have the multi-model flexibility of, say, Toyota or Mitsubishi.
Take Isuzu Philippines, for instance. In the first quarter of 2018, the company stopped its Crosswind production in Santa Rosa, Laguna. Which actually made sense as the popular MPV had been around for many, many years already. The problem was that Isuzu essentially retired a vehicle without introducing a new-generation replacement. Remember that the Japanese commercial-vehicle maker had already been suffering from an abysmal lack of passenger-car offerings — besides the Crosswind, the brand only had the D-Max pickup and the Mu-X SUV. The rest of its products were commercial trucks that weren’t really volume sellers.
The result? Isuzu Philippines’ numbers took a drastic dive in 2018. After moving a total of 30,086 vehicles in 2017, the distributor managed to sell just 16,729 units last year — a truly depressing 44% decline. To be fair, nearly all automakers saw their sales go down in 2018, but among those with a sales volume of at least 1,000 units, only Kia (-57%) did worse than Isuzu. But the Korean firm had an excuse: It was going through a tough transition period in the wake of a new distributor acquiring the rights to it in our market.
But what was Isuzu’s excuse?
Besides the company retiring its old MPV, which had still been selling in healthy numbers, the D-Max, a perennially top-selling model in the pickup capital of Asia (Thailand) and even in our very own market, underachieved in 2018. That was even after the release of the more fuel-efficient and cleaner RZ4E Blue Power diesel engine. Maybe it was consumer fatigue: The current D-Max model had been in the market for far longer than its rivals. Maybe it was stiff competition: There was a preponderance of excellent newer players in the segment. Whatever it was, the D-Max struggled mightily in the sales department last year.
To be specific, Isuzu sold 3,870 D-Max units in 2018. By comparison, Toyota sold 18,287 Hilux units and Nissan sold 16,140 Navara units. Even the pre-facelift Mitsubishi Strada sold more with 4,725 units. Without the Crosswind, Isuzu Philippines was left with just one other passenger vehicle.
And now comes more unfortunate news: The manufacturer is also shutting down its local assembly of the D-Max in July this year. After that, the pickup will be sourced from Thailand, just like the Mu-X. With this latest development, the company has no choice but to let go of workers. Note that the automaker has already parted ways with 44 employees from the first wave of assembly-line closure. Inside word has it that Isuzu is preparing to offer a new round of retirement packages to its existing workforce.
So my point is this: Local manufacturing is nice and all. But when business goes bad — even for just a short period of time — the company is easily sent reeling against the ropes versus a competitor that simply imports completely built-up units that don’t require the organization to pay salaries and operational expenses.
My other point is this: If you’re getting a brand-new vehicle and it’s a choice between two nearly similar models, go for the one that is locally manufactured. I just feel that automakers that invest in our country deserve to be prioritized by Filipino consumers. That’s assuming, of course, that the locally made vehicle is a good product to begin with.
Which Isuzu vehicles are. I’m truly rooting for the brand this year. I hope the distributor recovers and does well in 2019. We need to keep the good guys in the auto industry.

Praxis teaches financial literacy via gameplay


By Vincent Mariel P. Galang, Reporter
AS we spend our money on things that we want, we tend to forget to save for the things that we need.
“Without financial literacy, or even basic financial literacy you get yourself into massive financial trouble, so in the Philippines like many other countries, when people receive their salaries, they tend to spend it first, which is a great short-term relief, but the next day, what happens? How do they, then, manage their money for the rest of the month, or the rest of the two weeks?” Greg Martin, group chief executive officer of the Praxis Company said in an interview on Feb. 13.
“The impact is significant,” he added.
Noting a 2014 study by the Standard & Poor’s Rating Services, 25% of the adults surveyed in the Philippines were financially literate, which is way below the global average of 33%. This is the problem that Mr. Martin, and his company is trying to address through the Praxis gameplay. It is a gameplay experience which stimulates financial challenges and pushes players to realize the importance of mastering money.
“Praxis, or financial literacy, isn’t about ‘don’t spend money.’ It isn’t. It’s about how you manage your money. The real thing about financial literacy is planning. It’s about understanding what to do with the money that you earn. You should be putting money away for savings. You should have some insurance protection, and you should have some long-term investments for retirement, or for your kids’ education. Financial literacy, what Praxis tried to do, is to show people how important it is to do this, and do it through a gameplay,” he said.
Since its creation in 2003 in Singapore, Praxis has taught not only adults, but also kids on how to properly manage their money. It has been in the Philippines for about four years now and has been partnering with schools like Jose Rizal University, which has incorporated the gameplay in its their curriculum, and companies like SunLife Financial, to reach more people and educate them of the importance of saving for their future. Clients either lease or get licensed to be able to conduct a session. The company designs the game according to the audience that will play the game.
“We have three focuses in the business. The first is schools, educating kids on financial literacy. The second is financial wellness, so corporations have wellness programs, and we bring in the financial element to it. Third is financial services, so working with insurance companies, asset managers, banks,” Mr. Martin said.
The company was recently awarded with a $3-million investment from Triple P Capital to help in their aim to boost financial literacy in Asia, “They’ve invested $3 million into the business to help us… take one step back, build some more foundations, recruit people, invest in marketing invest in product development, and to further support our clients, and work with more,” Mr. Martin said.
FINANCIAL LITERACY IN THE PHILIPPINES
With the 25% financial literacy in the country, Mr. Martin said Filipinos should be alarmed by it, but this is not unique in the Philippines.
“They are extremely low literacy levels, but again this is not unique to the Philippines. There are low-levels everywhere,” he said.
He also noted that as money gets complicated and financial products become more accessible, education has not improved yet.
“The complication of money has grown significantly over the last 15, 20 years… so what happens when things get complicated, but the education hasn’t actually moved is there’s a gap,” he noted.
“Stock markets have become more accessible,” he said, adding that trading platforms have allowed people to easily access and directly buy shares.
“But has anyone ever been taught how do you know when is the good time to buy shares? Is it a short-term investment? Is it a long-term investment? Products have become complicated yet easily accessible. I think it’s lack of education basically from, be it from governments through to financial institutions,” he said.
Nonetheless, he recognized the efforts of the government in order to address this problem and its big role in boosting financial literacy in the country, but lack of action is also another problem.
“One of the really good things in the Philippines is that it’s really going to the forefront of being a key leader in financial literacy. The BSP (Bangko Sentral ng Pilipinas), Department of Education (DepEd), Insurance Commission (IC), SEC (Securities and Exchange Commission), are coordinating, basically, to drive the importance of financial literacy in the Philippines,” he noted.
The government has partnered with companies to educate the Filipinos of the importance of money management. One of which is the program launched by DepEd, BSP, and Banco de Oro (BDO) Foundation that seeks to educate public school teachers, non-teaching personnel, and students on how to manage their finances through short videos.
“As it affects everybody, it covers all demographics, all geographies, an all cultures, because of that, it is, actually, important that governments, administrations have national policies and approach to drive and support financial literacy,” he said.

What women should know about cervical cancer

After breast cancer, cervical cancer is the second highest cancer-related cause of death  among Filipino women. Although considered a highly preventable disease, the high mortality rate is due to the fact that women are diagnosed at a late stage where treatment is expensive and in most parts outside of the metro, unavailable.
A study by the Philippine Cancer Society points to the strong link between  the incidence of the human papillomavirus (HPV) among the Filipinas afflicted with cervical cancer. Other factors that seem to increase the likelihood of HPV infection and cervical cancer are early sexual contact, low socioeconomic status, high parity, smoking, use of oral contraception and risky sexual behaviors.

In the 2005 cancer registry, there was a marked increase in new cases of cervical cancer, and reported deaths. The high mortality rate was attributed to the fact that 75% of women were diagnosed at late stage. The Philippine General Hospital (PGH), the country’s government tertiary center, reported the highest number of new cervical cancer cases.
We consulted gynecologic oncologist Dr. Chia Yin Nin practicing at Gleneagles Hospital in Singapore about this alarming finding and its implications on women’s health.
What advice can you give women on how to protect themselves against cervical cancer?
In the past, we would say that women with multiple sexual partners are high risk. But that has changed because normal women are now affected by cervical cancer. Now, we realize that, although HPV is sexually transmitted, it is not an STD. It can be acquired through personal contact like fondling, petting and sexual intercourse.  Nowadays, all women who are active sexually can have cervical cancer.
Young girls should get vaccinated before their sexual debut to protect against the HPV virus. The vaccine provides up to 95% coverage against cervical cancer. For older women who have started sexual activity, they can still have the vaccines ’till age 45, but I also advise screening: the PAP Smear or the HPV test kit.
Unless women go for tests, they will never know that they have signs of the virus. It takes years before the virus can develop into a cancer but this can progress very quickly depending on the strains of HPV virus they acquire e.g. type 16 and 18 are highly aggressive.
Cancer can deprive a woman of her fertility.
Once these pre-cancer changes are detected, they can be easily treated by burning away those abnormal cells to prevent any chances of progression into cancer. Pre-cancer treatment does not involve removal of the womb.
Early screening not only saves your life, it saves your womb.
What are the symptoms to look for?
The virus is so prevalent in the community, almost all women can have it. For about 20% of these women, the virus can develop into cancer. It is only when the cancer develops that you experience the signs like bleeding during intercourse, bleeding between menstrual periods or bleeding after menopause. The patient can also experience other symptoms like back pain, cough and swelling in the abdomen or limbs if the cancer has spread.
How can women protect themselves against cervical cancer?
There are 2 types of protection: primary and secondary. Vaccination is, by far, the best means of primary protection. Secondary protection to monitor the presence of pre-cancerous changes is done by PAP smear and/or the HPV test kit. The PAP smear is a test done by a General Practitioner or an OB Gynecologist to detect pre-cancer changes in the cervix.
Aside from the PAP smear, there is the HPV test kit. It is a swab test similar to the PAP smear. The accuracy is so much better than the PAP SMEAR. It is so accurate that you can space out your screening to 3-5 years. For PAP smears it is recommended that you test once every year because it is quite prone to interpretation error.
I tell my patients that cervical cancer can happen to any of us. My cervical cancer patients are normal married women, not commercial sex workers. Regular women are complacent so they think they are healthy and don’t need to go for screening. Also, they are reluctant to ask their partners about their sexual history. I tell women that instead of doubting your spouse or partner, you empower yourself by protecting yourself so that you can stay healthy and live long as a mother to your children, as a wife to your husband and a person with a promising career.
With many of today’s women taking full control of their lives and careers, there is no excuse for making sure that their bodies are strong enough to cope with the demands of running a company and a home simultaneously.
For more information about the gynecological disease and other condition, visit
https://www.gleneagles.com.sg/healthplus
Health Plus is an online health and wellness resource developed by Gleneagles Hospital, Singapore. To make an enquiry or appointment, contact our Central Patient Assistance Centre: 24-Hr Helpline: +65 6735 5000; email cpac@parkwaypantai.com; online appointment: http://www.gleneagles.com.sg.

Fresh property projects

The Philippine real estate industry remained vibrant in 2018 despite challenges from rising interest rates and inflation. Playing a big part in this favorable outcome were real estate developers who aggressively expanded and rolled out development projects.

In recent years, a number of office buildings, residential towers and commercial structures, among others, were constructed across the country. These developments have made substantial contributions to the growth of the country and the welfare of its people, reshaping the Philippine skyline incredibly. — Mark Louis F. Ferrolino

FESTIVE WALK MALL

Festive Walk Mall is Megaworld Corp.’s first full-scale lifestyle mall in the Visayas and Mindanao region, established in its Iloilo Business Park in Mandurriao, Iloilo City. The three-level mall offers 90,000 sq.m. of gross floor area of shopping, dining, leisure and entertainment. It has three event facilities, including an indoor event atrium, outdoor covered event area, and an outdoor open-air activity area. It also features a children’s playground and a concept food hall.

The design of Festive Walk Mall evokes tropical influences with the presence of indoor gardens around the development. The third level of the mall is highlighted by The Deck, an open space featuring lush gardens and greeneries where the chapel and al fresco dining restaurant and cafes are located. There is also an interactive dancing fountain at its main entrance along Megaworld Boulevard.

ACIENDA DESIGNER OUTLET

One of these is the Acienda Designer Outlet developed by Cathay Land, Inc., the company behind South Forbes Golf City. Acienda is the first international outlet mall in the country located along Aguinaldo Highway in Silang, Cavite. It houses a wide range of top international brands that offer a minimum of 30% off bargains.

The designer outlet has four architectural themes: Italian, French, New England, and Spanish, offering visitors many “Instagram-ready” spots. For instance, it features a French-style food and beverage section accented by a three-storey windmill that have served as Acienda’s iconic attraction since its opening.

Being in close proximity to Tagaytay City, Acienda is making it possible for visitors to enjoy the cool weather while strolling at various shops on the site. The perfect mix of brands and leisure amenities at Acienda entices many local and foreign tourists to visit the new mall.

ASIAN CENTURY CENTER

Asian Century Center was developed by Century Properties Group, Inc. (CPG) in partnership with Asian Carmakers Corp. This 21-storey green office building with a net leasable area of 29,628 square meters (sq.m.) is located at the 27th Street corner 3rd Avenue in Bonifacio Global City (BGC) in Taguig City.

The Antonio-led property developer said that Asian Century Center is accredited by the Philippine Economic Zone Authority (PEZA), which means that the tower has met PEZA’s strict requirements of 100% power backup, provision for high-speed internet and infrastructure, and a building management system.

CPG also noted that the tower is pre-certified for LEED (Leadership in Energy and Environmental Design), a global green building and sustainability certification system by the United States Green Building Council. Pre-certification is awarded to projects with achievable sustainable targets that demonstrate the project’s commitment to LEED certification.

UDENNA TOWER

Udenna Tower is the first office building development by Udenna Group of Davao-based businessman Dennis A. Uy. The 24-storey building is strategically situated at the corner of Rizal Drive and 4th Avenue within BGC in Taguig City.

Udenna Tower has a gross floor area of 14,703 sq.m., with a net leasable space of over 13,600 sq.m. It includes five podium levels and two basement levels of parking. Aside from housing some of the corporate offices of the group, some floors are open for leasing to other companies as corporate headquarters.

The company believes that Udenna Tower illustrates the strength and potential of its property arm, Udenna Development Corp. (Udevco), to become a significant player in the sector. The real estate and property development firm is currently embarking on more and bigger projects across the country, including the development of the 177-hectare Clark Global City in Pampanga.

BANAWA HEIGHTS

AppleOne Properties, Inc., a Cebu-based and homegrown property developer, topped off the last tower — Tower 3 — of its Banawa Heights, a 2.8-hectare residential development on the hills of Banawa in Cebu City. This property is composed of different types of residential homes including three 12-storey towers, villas and mansionettes.

Banawa Heights features an elegant and sophisticated Victorian-inspired architectural design that attracts many passers-by for photo opportunities. It is masterplanned with 70% open spaces which include generous walkways and jogging trails, pocket gardens, green spaces, wide road networks, and spacious parks and playgrounds.

As a gated community, all private cluster entrances at Banawa Heights are equipped with a keyless access control — a first-of-its-kind in Cebu City.

THE FLATS

This 15-storey building by Ayala Land, Inc. (ALI) is redefining the co-living trend in the metro. Located along Amorsolo Street in Makati City, The Flats features co-living spaces catering to young urban professionals who aspire for a perfectly balanced life. It is within a five-minute walk to Ayala Avenue and near the Dela Rosa Walkway.

Units at The Flats are designed for optimal space usage, with built-in beds, built-in cabinets, individual desk spaces, air-conditioning, a kitchenette, and a toilet and bath with shower. Occupants can choose from rooms with lofts and rooms with bunk beds. Up to a maximum of four occupants can share each co-living space, however, units for three and two occupants per room are also offered.

SANTORINI TOWER

Standing at the heart of a bustling business and leisure hub in the eastern part of Metro Manila — Sta. Lucia City in Cainta, Rizal — Santorini Tower is Sta. Lucia Land, Inc.’s (SLI) recent residential project that features stylish residential and full-service condotel units with elegant and modern interiors.

This is the second of the five Mediterranean-inspired residential towers within the Sta. Lucia Residenze, a masterplanned luxurious complex that offers modern leisure and entertainment facilities, cinemas, upscale shopping malls, restaurants and cafes. Santorini Tower followed the success of the first high-rise residential development in the complex called Monte Carlo.

Mixing exclusivity with luxurious living and modern comfort, Santorini Tower offers homeowners and investors their dream lifestyles.

Looking towards real estate in 2019

Bjorn Biel M. Beltran, Special Features Writer

Recent years will show that the Philippine property market has become one of the most valuable in all of Southeast Asia. In 2018, residential, office, and commercial segments in the industry have withstood the pressures of rising inflation, interest hikes, and a depreciating peso, bolstered by ever-increasing demand from local and foreign investors.

By and large, many signs point to another positive year for Philippine real estate. In a recent round table held by online real estate marketplace Lamudi, property developers noted that continuous pace of technological innovation is playing a bigger role in the development of the industry going forward.

Elizabeth L. Ventura of Anchor Land Holdings, Inc., for instance, said that not only are they able to educate their clients better about their property offerings through the Internet, but the projects that the company itself ventures into have become more viable because of the information that they get about their prospective clients and the feedback that they receive from them.

“We rely on feedback mechanism so we know what buyers want. When you’re very clear with the needs of the clients, you can properly plan your projects,” Ms. Ventura said.

“We need more info about the clients so we could advance and improve our offerings.”

The accessibility and convenience provided by digital property marketplaces are already contributing to the property market’s growth in attracting prospective buyers.

Lamudi Chief Executive Officer Bhavna Suresh said that the Web site’s search traffic figures for January 2019 alone have seen an average growth rate of 40% week on week in terms of search activity.

“These are incredible numbers. We’ve never seen numbers like these. That’s what we’re very excited about. We’ve seen so much traffic coming in from the Middle East and from the US,” she said.

This is not to mention the impressive growth in the supply and demand side of the industry. Buyers in the business process outsourcing sector (BPO), one of the country’s biggest economic contributors, are driving the growth, as well as players in the technology sector and flexible space operators.

Professional real estate services firm Jones Lang LaSalle Incorporated (JLL), in their forecast for 2019, said that the overall outlook for the Philippine property market is positive not only in Metro Manila, but in emerging cities like Davao, Cebu, and Clark.

JLL pointed out that 2019 will be a year that further showcases the emergence of new trends and opportunities in the industry, such as the growth of flexible spaces. The cultural shift led by the millennial generation to a community-based lifestyle driving the popularity of co-working and co-living is driving more foreign flexible space operators to increase their presence in 2019.

According to JLL, flexible space operators like WeWork and IWG have extended their footprint in the country and are expected to expand in 2019. More local providers of co-working and co-living spaces are also expected to emerge, typically operating in fringe areas. The lower capital costs these types of assets require will spark investor interest.

“The demand for real estate space by the BPO sector as well as increasing demand from emerging real estate stakeholders like technology companies and flexible space operators will continue to make significant inroads into the Philippines’ property market in 2019. This expected growth and expansion of the industry in 2019 will hopefully encourage investments in the next wave cities of Davao, Cebu, Clark, Cagayan de Oro, Iloilo, and Bacolod,” JLL wrote in their report.

“As such, 2019 is anticipated to be another solid year for the Philippine real estate industry. Barring any hitches from the upcoming 2019 elections, apprehensions over the implications of TRAIN 2, and the delay in PEZA accreditations on buildings, the year 2020 already looks just as promising.”

Property services firm Colliers International also gave a positive outlook for the Philippine real estate industry in 2019, adding that “the strong demand and evolving preference of tenants is giving rise to flexible workspaces; residential developers are tweaking their projects to cater to Chinese offshore gaming employees and local professionals; and mall operators are more open to foreign food and beverage (F&B) and home furnishing tenants, which we see redefining retail space absorption in 2019.”

Colliers noted that developers are also cashing in on the thriving property market by aggressively acquiring parcels of land outside of the more established business districts, in places like Cebu, Laguna, and Clark in Pampanga.

However, the company called for flexibility among real estate developers as looming challenges threaten to hamper the industry’s development. Such challenges include rising interest rates, which could impact low to mid-income residential demand over the next 12 to 24 months; rising inflation that curtails consumer spending, which accounts for nearly 60% of the country’s economy; continuing private construction delays due to the acute shortage of skilled workers and ramped up implementation of public infrastructure projects; and uncertainty surrounding the implementation of the second package of the Comprehensive Tax Reform Program, which proposes to reduce corporate income tax rates and rationalise tax and non-tax perks granted to foreign investors.

“We encourage developers to continue tapping into the demand brought about by the peculiarities of the Philippine market. For the Philippine property market in 2019, flexibility will be the name of the game,” Colliers said.

Bustling office, residential property markets

The office and residential property markets of Metro Manila were bustling in the final three months of 2018.

According to the real estate consultancy services firm Colliers International Philippines, net take-up of office properties in the fourth quarter of last year came in at 370,000 square meters (sq. m.) or roughly four million square feet (sq. ft.), bringing the total annual net take-up to 1.18 million sq. m. or 12.7 million sq. ft., a record for the capital region.

Both figures exceeded Colliers’ projections of 344,000 sq. m. (3.7 million sq. ft.) for the fourth quarter and 1.15 million sq. m. (12.4 million sq. ft.) for the entire 2018.

“Knowledge Process Outsourcing (KPO) firms led the demand from outsourcing occupants, covering 27% of net take-up in 2018 or about 381,000 sq. m. (4.1 million sq. ft),” Colliers said in its fourth-quarter Metro Manila office property market report.

“Among the KPO companies that occupied space in Q4 2018 are Infosys and AECOM,” it added.

Jones Lang LaSalle (JLL) Philippines, another real estate consultancy firm, noted in a separate report that among the drivers of demand for office spaces in the fourth quarter were offshoring and outsourcing (O&O) firms and online gaming companies.

Among the locations Colliers tracks, Quezon City had the highest share of new office supply in Metro Manila in the fourth quarter: 40% or 152,000 sq. m. (1.6 million sq. ft.).

“This is the first time in 11 quarters that Quezon City accounted for the bulk of new supply in Metro Manila,” the firm said.

“The delivery of new buildings indicates the growing interest in Quezon City,” it added.

The new buildings in the area include Araneta Cyberpark Tower 2 of Araneta Center, Inc., Vertis BPO Phase 3 of Ayala Land, Inc., Robinsons Zeta Tower of Robinsons Land Corp., and Mpire Center of Mpire Development Corp.

“Araneta Center accounted for 60% of Quezon City’s new office stock with Vertis North covering 34%,” Colliers said.

JLL estimated that the average vacancy rate in Metro Manila in the fourth quarter was 6%, “supported by the healthy leasing demand from O&O firms, online gaming companies, flexible workspaces operators, MNCs (multinational corporations), and traditional office space occupiers.”

In 2018, vacancy rate in the region was 5%, according to Colliers, which, it said was in line with its initial forecast.

When it came to rents, the firm said prime and grade A office space in Makati Central Business District (CBD) and Fort Bonifacio continued to command the most expensive rates — from P930 per sq. m. to P1,900 per sq. m. — as of the fourth quarter of last year.

In Metro Manila’s residential property market, Colliers noted that more than 5,100 condominium units were completed in the fourth quarter of last year, bringing the number of completed units in 2018 to 11,800.

“Despite a ramped-up pace of completions that started mid-2018, the 2018 total is 26% lower than the 15,900 units completed in 2017,” the firm said.

The condominium stock of the region by the end of 2018, however, went up 11% to 118,900 units from 107,100 units the previous year.

Fort Bonifacio and the Manila Bay Area accounted for the bulk, or 75%, of the all the units delivered. The projects delivered in the former include Avida Towers Verte of Avida Land Corp., and Federal Land, Inc.’s Central Park West and Grand Hyatt Residences.

Although there was only one project completed in the latter, Shore Residences Building 3 of SM Development Corp., Colliers noted that it contributed 2,000 units to the area’s condominium stock.

“Meanwhile, new units were added to the stock of other business hubs such as Makati CBD, Ortigas Center, and Rockwell Center following the completion of The Lerato Tower 3, Twin Oaks Place East Tower, and The Proscenium at Rockwell’s Kirov and Sakura towers,” the firm said.

JLL noted that the drivers of demand in the residential sale market were local and foreign high-net-worth individuals who typically secure “the biggest and most expensive units from high-end and luxury brands to maximize the value appreciation in major markets.”

“Corporate housing needs by expatriate employees of O&O firms and MNCs continued to drive the residential leasing market,” it added.

Although there were more condominium units delivered in the secondary market, Colliers said that take-up of completed units that were either for lease or re-sale remained strong, with overall vacancy rate in Metro Manila falling to 10.6% in the fourth quarter from 10.8% in the third quarter.

The firm observed a 0.6% increase in average rents in prime three-bedroom units in Makati CBD, Fort Bonifacio and Rockwell Center.

“Despite a flattish pace of increase, this is a reversal from the decline posted from Q1 2017 to Q1 2018. This indicates a sustained demand for condominium units for lease in the secondary residential market starting mid-2018,” Colliers said.

JLL, meanwhile, noted that in 2018, rental rates in Makati CBD, Bonifacio Global City and Pasay City were the highest. Regarding the latter location, where there is a concentration of Chinese online gaming companies, it said, “Landlords are able to ask higher rates due to the willingness of Chinese companies to pay at or close to asking rates.”

Fitch: Tax take key to hike in debt rating

By Melissa Luz T. Lopez
Senior Reporter
A SUSTAINED rise in tax collections may trigger a debt rating upgrade for the Philippines, an analyst at Fitch Ratings said, noting that last year’s budget deficit will not affect the country’s credit outlook for now.
Sagarika Chandra, associate director at Fitch, said the global debt watcher is not concerned about 2018’s wider-than-programmed fiscal deficit.
“We think continued reforms aimed at raising the tax ratio even as infrastructure spending increases are important to maintain fiscal stability,” Ms. Chandra said in an e-mailed reply to questions.
“One of the factors which we think could lead to a positive rating action is a sustained broadening of the government’s revenue base that enhances fiscal finances.”
In December, Fitch kept the Philippines at “BBB,” a notch above minimum investment grade, with a “stable” outlook.
The credit rater awarded an upgrade in 2017 right after Congress approved the Tax Reform for Acceleration and Inclusion (TRAIN) law.
The government last week reported a P558.3-billion fiscal deficit for 2018, substantially bigger than the P350.6-billion shortfall in 2017 and piercing the P523.7-billion program for the entire year. That placed the shortfall at an equivalent of 3.2% of gross domestic product, higher than the three percent deficit ceiling set for the year.
State disbursements totaled P3.408 trillion, exceeding the P3.37-trillion target for the year and 20.7% more than the P2.824 trillion spent in 2017, while revenues amounted to P2.85 trillion, slightly bigger than 2018’s P2.846-trillion goal.
“The small fiscal slippage does not have a near-term impact on the sovereign rating or outlook. We expect government debt to remain manageable at around 37% of GDP through 2020,” Ms. Chandra added.
“However, should the deficit overruns persist and be accompanied by macro instability, that could be negative for the rating over the medium term.”
The Bureau of Internal Revenue missed its P2.074-trillion collection target by six percent, but higher collections by other state agencies drove the overall revenue effort to 16.4%, the highest ratio since 2007.
Another global credit rater, Moody’s Investors Service, has said that the current fiscal deficit is manageable as the Philippines remains on solid footing.
Global debt watchers have been cognizant of the robust growth momentum of the country, but noted that the local revenue base is too shallow compared to those of similarly rated economies.
The Bureau of Internal Revenue is tasked to raise P2.331 trillion this year, 20% more than the P1.952 trillion it collected in 2018. Of this amount, P79.012 billion will come from TRAIN collections.
HIGHER TAXES
The Department of Finance (DoF) is also lobbying to further raise taxes on cigarettes, saying that doing so could push over three million Filipinos to quit smoking and collect P30.1 billion in additional revenues besides.
In a statement, the DoF said cigarette consumption could go down by as much as 16.8% should Senate Bill No. 1599, which raises taxes to P60 per pack in the first year of implementation from P35 currently and increases the tax by nine percent per year thereafter, be enacted.
DoF simulations also showed that a tax hike to up to P73 per pack will not unduly affect collections.
Citing simulations done by the Department of Health (DoH) and the World Health Organization, Senate Bill No. 1599 proposing an across-the-board increase in excise taxes on cigarettes will likely prompt “the youth, the poor and other price-sensitive cigarette users to stop smoking,” according to DoF Undersecretary Karl Kendrick T. Chua.
The TRAIN law raised the excise tax on cigarettes to P35 per pack on July 1, 2018. This will rise to P40 by January 2022.
It also provides for a four percent yearly increase in taxes by 2024.
Cigarettes are also subject to the 12% value-added tax.
DoF and DoH officials made the case before the Senate Committee on Ways and Means, with Health Secretary Francisco T. Duque III noting that higher cigarette prices could avert around 713,000 deaths.
The additional taxes will also fund the state’s universal health care program, which is seen to cost about P40 billion.
The House of Representatives has already approved a measure that would raise the excise duties for tobacco as well as alcoholic drinks, but the rates are lower than what the DoF is asking for. Mr. Chua added that the tax gap between the House and Senate versions would reach as much as P244 billion by 2022.
The Senate is yet to take up the tobacco tax bill in plenary for second and third readings, with only May 20-June 7 left for formal sessions of the 17th Congress.

Measure lifting restrictions on foreigners in business could still make it out of 17th Congress

By Charmaine A. Tadalan
Reporter
A MEASURE further relaxing restrictions in Republic Act No. 7042, or the Foreign Investments Act of 1991 (FIA), could be one of the bills that could secure approval in the remaining days of the 17th Congress, Senate leaders said in separate interviews late last week.
“We’re in the process of taking in the inputs of the stakeholders when we had the hearing a few months ago. Less controversial naman ito. We will try to sponsor it when we open,” Senator Sherwin T. Gatchalian, author of the measure, said in a telephone interview.
The 17th Congress, currently on a Feb. 9-May 19 break for the May 13 midterm elections, has May 20-June 7 left to act on bills. Any measure that fails to make it out of the legislative mill by then will have to be filed again.
“Hopefully, kung kaya pa, we can approve it before the 17th Congress ends. But then again, if we don’t approve it, we will refile it in the 18th Congress,” Mr. Gatchalian said.
Asked if the bill has a chance to be passed by June 7, Senate President Vicente C. Sotto III replied in a mobile phone message “Yes, possible,” while Senator Aquilino L. Pimentel III, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, said in a separate text message “Best effort na lang coz mahirap mag-commit (it is difficult to commit approval).”
Mr. Gatchalian had filed Senate Bill No. 2102, seeking to amend RA 7042 by removing restrictions on foreigners from practicing their profession in the Philippines, provided Filipinos are given the same privilege in the home economies of benefitting foreign nationals.
It also proposes to reduce to 15 from the current 50 direct local hires the minimum employment requirement for small- and medium-sized domestic enterprises with 40% foreign equity with minimum paid-in capital of $100,000 that will be allowed to set up shop in the country.
Moreover, the bill proposed an annual review of the Foreign Investment Negative List — which identifies sectors, industries and economic activities reserved for Philippine nationals and those open to up to 40% foreign participation or ownership of up — that is now updated no more than once every other year.
Deputy Speaker Arthur C. Yap of Bohol’s 3rd district pressed the Senate on the “long overdue” measure, saying via text message: “I strongly urge the Senate to use the remaining session days of the 17th Congress to pass the FIA counterpart amendments because the changes there are long overdue.”
Mr. Yap authored House Bill No. 8764, counterpart of SB 2102, which the House of Representatives approved on third and final reading on Jan. 14.
“We need a shot in the arm for new investments in this changing world where technology and innovation are making it cheaper and for companies to be more mobile than ever before,” Mr. Yap explained. “Additional jobs are on the line and we want foreign investors to come and give us more opportunities for local labor and more competitive products.”
Sought for comment, British Chamber of Commerce of the Philippines Chairman Chris J. Nelson said by phone that members of his group “obviously hope this could be passed before the end of the 17th Congress.”
An adviser of the American Chamber of Commerce of the Philippines, Inc. (AmCham), in a previous House panel hearing expressed support for the measure, noting it was consistent with President Rodrigo R. Duterte’s socioeconomic agenda. “This law, if it’s legislated, along with the PSA (Public Service Act) which has been passed in the House but not yet in the Senate, would put meat on the bones of that point because, so far, since that (agenda) was released in 2016, no legislated reforms have been heard, so we encourage the Congress to continue with this and others,” AmCham Senior Advisor John D. Forbes said in an Oct. 9 joint hearing of the House committees on Economic Affairs and of Trade and Industry.
The central bank reported on Feb. 12 that foreign direct investment net inflows dropped 3.2% to $9.061 billion as of November 2018 from the $9.358 billion recorded in 2017’s counterpart 11 months.

Strong demand expected for retail Treasury bonds

By Karl Angelo N. Vidal
Reporter
RETAIL Treasury bonds (RTB) to be auctioned off today can expect strong investor demand amid additional liquidity in the market due to the government’s payment of matured debts.
The Bureau of the Treasury (BTr) announced on Thursday last week that it will offer at least P30 billion worth of five-year debt papers to individual and institutional investors. This is the first RTB offer of the government this year and the fifth under the administration of President Rodrigo R. Duterte.
Bond traders interviewed said the market can expect strong demand for the RTBs.
“There should be good demand for the RTB, given last week’s maturity and overall good CPI (consumer price index) expectations,” a trader said in a text message.
The RTB issuance comes at a time of additional money supply in the local market following the maturity of around P70 billion worth of previously issued peso-denominated securities on Feb. 19.
The trader expects RTB coupon to land between 6.125% and 6.25%, while another gave a 6.125-6.375% range.
“… [T]here is a possibility that demand will reach P100 billion. From the previous issuances, it usually reaches P100 billion or more,” a trader said.
“It may also breach P200 billion if the rates are attractive. It all depends on the rate.”
The first trader noted that strong investor demand is expected as the market digests recent statements made by Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo.
On Tuesday last week, Mr. Guinigundo said at a seminar in Tokyo, Japan that the central bank will “have to react swiftly to maintain momentum” if liquidity “is not enough to maintain economic momentum.”
Market watchers are growing certain that the central bank will cut banks’ reserve requirement prior to any adjustments to benchmark interest rates this year.
Rizal Commercial Banking Corp. economist Michael L. Ricafort said in a mobile phone message on Monday that the BSP has consistently signalled gradual reduction in large banks’ reserve requirement ratio (RRR) to single digit levels by 2023 from 18% currently.
“This would mean an average RRR reduction of two percentage points per year until 2023,” Mr. Ricafort said.
From a high of 20%, the central bank slashed the RRR in two moves last year and now require universal and commercial banks to hold on to just 18% of their deposits, leaving them with more or less an additional P200 billion which they can lend to borrowers.
A cut in reserve requirements would unleash an additional billions of pesos into the market, which can be tapped for investments.
“Aside from the recent maturity, if there is a cut in reserves, that will be a factor in the pricing of the RTBs,” the second trader said.
“If there will be no cut in reserves, the market should be compensated with a higher rate (because) there’s a tendency that the RTB tightens the market.”
The Treasury will offer peso-denominated five-year fixed-rate debt papers to retail investors amounting to at least P30 billion.
The auction and pricing of the five-year RTBs, due 2024, has been set today, to be immediately followed by a public offering until March 8 and issue date on March 12. The Treasury may choose to cut short the offer period and increase the offer volume as needed.

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