Gates open to foreign investment in the Philippines

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The Philippines government has further opened the doors to Westerners in a move that is destined to cause dramatic changes in the nation in several respects:

1. Boost condo investment by foreigners as they see the Philippines increasingly as an investment destination

2. Boost foreigner relationships with Filipinos

3. Boost retirements in the Philippines

4. Boost the appeal of the Philippines as a holiday destination

5. Boost the appeal of resort accommodation and lifestyle provisioning

The move by the Philippines government is to offer foreigners a rolling opportunity to obtain a 6-month visa in the nation, with the prospect of up to a 36-month stay. This is big news when you consider:

1. The dismay of many Western governments for their country, or their governments

2. The lower cost of living in the Philippines, i.e. The relative ease for foreigners to set up residence and live off pensions, or otherwise live off the land.

3. The spectre of Western governments struggling with the pension obligations of their citizens

Now, in fairness, the Philippines is not exactly ready or 'to Western standards' when it comes to lifestyle. i.e. The problems as I see it are the following:

1. The enfranchisement of the Philippines - that has turned the country into a boring experience. The exception of course is in the national capital and a few tourist centres. 

2. The pollution and the dire state of infrastructure. In this respect matters are getting dramatically better. i.e. The Fort City in Manila is a new modern city, and less corruption and strong economic growth has resulted in visible improvements. 

3. The traffic problem is still there as prosperous Filipinos are buying cars. This is a global issue of course. Few cities are very good at controlling traffic. Hold a thought for Manila's transit network. Its jeepney and bus networks are good value and efficient, and I'd expect similar from its rail service as it expands. 

Expect Metro Manila to be the 'Tokyo of the South' with rail networks connecting people quickly to different parts of the city. Manila has little love of rail now, but watch as that crowded network rapidly expands. That will occur because of the traffic, but also because the government has just greatly raised the fares, which will precipitate more spending rail connections. The implications is, you need a Philippines Property Guide, and you need to buy property investments in the right location to benefit from these shifts....I'd say with some urgency, as there will be a rapid rise in demand. Expect an Asian property demand. The Philippines and Indonesia already have among the most appealing yields in Asia (excluding Japan)...around 7%.

The most appealing places are city (Manila, Davao, Cebu) and inner city areas (Subic, Lipa, Tagaytay, Eton City, etc). Now, Manila is essentially a collection of village cities like Tokyo, just starting to be connected by rail.  Major developers are building new 'cute' local residential villages, however there are major hubs like Ortigas, Trinoma, Mall of Asia (on Manila Bay) and Makati. Makati City is the traditional centre of business, however that might be expected to change, as new industries overtake old, and even old businesses seek 'new infrastructural developments, rather than being imprisoned in anachronistic centres. The GreenBelt shopping centre in Makati City however retains some appeal. These areas are appealing because they are destined to attract the 'culture' and services that Westerners desire. Unfortunately, outside of Manila, its very much 'franchise' city because these places are simply poor, and correspondingly under-capitalised. This might change with more foreigners, as existing tourist havens built by foreigners have shown.

The other appealing aspect of the Philippines is:

1. Relatively 'hard currency' compared to Japanese Yen, the Euro and USD

2. Rapid population growth of 2%

3. Rapid rates of urbanisation

4. Rapid growth in incomes due to call centres, business outsourcing

5. Proximity to Asian growth centres

6. English is one of the 2 national languages (along with Tagalog)

7. Increasingly 'open gate' policy to foreigners

It does not get any better than in the Philippines; and we saw this trend start 8 year ago. My partner and I bought property for P700/m2; its not worth P2100/m2 based on an offer from a recent prospective buyer. That is a far higher rate of property price appreciation than in the West; and it will continue as interest rates are only now getting really cheap. This has all the makings of a property boom!

You can buy a condo in Manila from P2mil ($US40,000) upwards, though it depends on standards and target market. If you buy in down-market location, you will be tolerating over-use of services by poor relatives from the rural areas. i.e. You might find people parking in your car spot, being noisy, hanging out their laundry; not to mention the cheap dowdy looking façade of the property. Invest smart! 

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Building or buying a house in the Philippines

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Here is a foreigner/expatriate who has built a house in the Philippines. I might note several considerations:

1. The opportunity to build with local labour to lower your costs; as long as you tightly structure contracts and manage performance to ensure your expectations are closely realised

2. The opportunity to buy foreclosed properties - remembering that not all banks offer good value, and to check to ensure you are paying a reasonable price

3. Take the opportunity not just to find out the prices of property from websites like Sulit.com.ph, but to also talk to landowners around your areas of interest. Why? At face value property in the Philippines looks like a rather illiquid market. Well, you'd be surprised how many sellers are out there, but its harder to connect with them.

4. Foreigners are like gold mines to Filipinos; a dollar sign flashes before their eyes when they see one. Its engrained in them from the age of 5yo. Its all a big joke; but at the end of the day, its their 'inter-dependence' culture that pulls everyone down. The difference between you and some other rich Chinese Filipino is that they will probably be assured that you have money, and that you are less likely to be committed to someone. 

See this blog by an expatriate who has built a house in the Philippines. You might expect materials to be more expensive in the Visayas. See here.

Andrew Sheldon NZ Property Guide Philippine Real Estate Guide Foreclosed Japan Guide Applied Critical Thinking, Strategy, Integrity Investments SheldonThinks

How to stay alive in the Philippines

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Here are two horrific stories involving the murder of Australian and English men by their respective partners in 2 separate incidents. As sad as these murders are, I don't believe they were totally unexpected. People don't suddenly reveal themselves as murderers, or accessories to a murder. The areas and girls where these guys lived are famous for being drug and prostitution districts of the Philippines. One of the men even married a bar girl. What do they say 'You can take the girl out of the bar, but you can't take the bar out of the girl'. 'Good girls' dont even drink in this country, so best to stay away from those girls.
I dont think a person really knows themself at 25yo, so to marry a person from a different culture at that age, and from a poor country as well, you are just looking for trouble. not easy to understand women at that age. A PhD in psychology probably wouldn't help. A lot of life experience needs to pass under the bridge before you marry a foreign girl from a poor country.
Here are some tips:
1. Dont get involved with a girl with educational qualifications less than you. Why? Where is the basis for respect. A Filipino qualification will mean less than a foreign one (sadly), so they are already at a disadvantage.
2. Dont get involved with a girl more than 15 years younger than you. Age does matter. I think age differences over 15yo are likely to breed differences over time.
3. Dont get involved with a girl with relatives in prison or doing drugs. I wouldn't even do it in Australia. Knew an Australian girl once whose father was in prison for murder. Dropped her as soon as she said. It didn't even matter that she told me upfront. Don't want him tracking me down if we ever broke up.
4. Avoid girls with a sense of entitlement
5. Avoid girls without a good job
6. Avoid girls with family who dont have good jobs
7. Avoid girls if you dont get along with the family
8. Avoid girls with dependents, you are likely to feel the pressure to finance their education
9. Avoid girls that show any hint of delusion, unreasonableness
10. Avoid religious girls. Their hypocrisy will manifest in delusion. Avoid dogma. This is particularly important if they are ambitious.
11. Avoid frivilous, social climbers overly concerned with appearances

Of course these are general rules, and if you have a PhD you might think better of such guidelines. Of course these tragic murders might be taken as evidence of the Filipino character. I personally have met some pretty pathetic Filipinos on previous trips, but I was more impacted by the fine people I met. I met a few really sincere, real people on a few trips, and having surrounded myself with good Filipino people, I actually seldom meet the bad. There are little things, but not the murderous-types.

Removing out of my apartment

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Moved out of my apartment last weekend. We were trying to buy a place but were unable to reach terms on price for one place, and the builder DMCI was hopeless at revising its contract on another place. So I ended up paying Y1000 for a tradesman to move our stuff out.
Having done that I ran into the mother of the landlord in the street. I am friendly with her cousin. She was saying. I was wondering if you wanted your computer. Maybe you have another. I mentioned that I have another. And she was asking maybe she can have it. Hmmm.... well it was a pushy approach. Not accustomed to that. I dont like dealing with her. She doesn't respond to messages. She tells me I have to move out when I reached an agreement with her cousin to move out later. I actually was moving out only because her son plays music all the time. I'm trying to work and he's playing the same boring music all the time. On the other side of the house this family has erected a pig feed factory in a residential house. That attracts alot of birds, and bird shit. But the worst of it was the 10-odd roosters they put their. These things are crowing at all times of the day, and they were right outside my window.
Anyway as a tenant I had no rights. As a landlord I could complain to the president of the village home owners association. This village has no rules preventing cocks, so if you are planning to move into a new home, I would ensure they are limited in what they can do. Cocks are the worst! Dont think you are safe because there are none around you. People move and alot of people have these things. Stupid sport! Where is the skill in cockfighting, or gambling for that matter.
Damned if she is getting my computer - I'd prefer to give it to a school.

Cool places to live in the Philippines

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The Philippines is tropical. Some people accommodate for the heat by drinking all day or using air conditioning, in what is one of the highest cost countries in the world for power. Lipa City is one of the few cities in the Philippines where you can live in a mild climate by virtue of its higher elevation. The city has an elevation of 400m, which is enough to make it cooler, but not high enough to be enshrouded in mist all the time like Baguio City or Tagaytay. Baguio City is another popular community for foreigners, but its isolated from Metro Manila (6+ hours south) whilst Tagaytay has alot of restaurants, but no significant shopping mall. The good news is that Tagaytay is just an hour away from Lipa City, as is Batangas Pier, which is a transhipment point for Puerto Gallera. For more information and photos of a house for sale in Lipa City - follow the hyperlink.

Living conditions in Philippine Condos

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Living in condos tends to be alot more pleasant than elsewhere for a number of reasons:
1. Insulation: Condos are better insulated, and windows are sometimes not even designed to open.
2. Quieter: People are generally quieter in condos and strata rules are more strictly enforced.
3. Politics: Condos are located in the city, so there are no favourites. You are more likely to get equal treatment since rules are enforced impersonally.
4. Civilised: People are more civil and considerate in the city.
5. Buffer: Condo living offers 2 styles of living - high rise in which case you are often way above the noise and pollution or low-rise, in which case there is usually landscaped gardens and concrete wall giving you a buffer from the hectic, chaotic world outside.
6. Lifestyle: People in the cities tend to be more productive and active. They are not spending their time at home, but are rather out working to pay off their new condo.

Condos however can pose risks to your environment as well.
1. Edge of peace: You want to make sure you dont rent near the edge of the development because you might be next to a noisy slum area. You dont want to be next to a basketball court or swimming pool or you might be disturbed by a lot of noise.
2. Construction: You want to avoid buying or renting near a new construction site because you will find these workers are paid to work all through the night sometimes. So avoid new project sites, as the project might take a year to complete.
3. Busy roads: Avoid being close to busy roads.
4. Mixed land use: Avoid being next to slums or piggeries that might taint the air you breath.
5. Rules: You want to make sure you dont get disturbed by inconsiderate people. Find out what rules are present to protect you. I was surprised that most Filipinos care so little about their surroundings.
6. Other owners: Its worth knowing the makeup of the other owners. If the owners are OFWs they are likely buying the condo for the benefit of hundreds of relatives in the provinces. Expect them to descend on your condo pool every so often for a family party. That would be fine if there was just a few occasions. But if everyone does it, you dont want to be living next to the pool.

Conditions of living in the Philippines - houses

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Living in the Philippines is actually not an easy thing. There are alot of challenges. I have lived in a condominium as well as 2 houses in different subdivisions. The problems I faced were:
1. Noise: The noise was shocking. All over the Philippines there are cocks (roosters) that 'crow' from the earliest hours of the morning. I was in a townhouse with 5 of them outside my window. Moved there because the owners brother could no longer keep them on military grounds. The owner did not want them on his property.
2. Dogs: Yep, you guessed it, more noise. Each Filipino I dare say has 3 dogs each, and they often have mad dog fights at all hours, and if not fighting, they will bark at traffic or pedestrians.
3. Planes: I was below an airforce training facility so I was experiencing flight manouvres in the morning through to night.
4. Music: My neighbour, who was a relative of the owner, was playing music at all times of day. It wasnt just because it was loud, it was often bad, and even if it was good, the same song could be repeated 10 times.
5. Kids: There are alot of young kids in the Philippines, and there is little discipline, so the run around your house, screaming, even banging on your windows for attention. At Xmas, kids from poorer areas come around singing for money, of course you are really paying them off to get rid of them. Except there are hundreds of them and they keep coming back for more.
6. Factories: My living circumstances were pretty peaceful, but with the cocks, they also established a factory in the house next to mine. This was a residential house being used to produce pig feed. So I was hearing the scrubbing of aluminium trays through the day into the early evening.
7. Motor cycles: The guy next door had a motor bike and he liked to rev it as well.
8. Horns: Filipinos are as lazy and inconsiderate. They will arrive at 2AM in the morning to pick up someone, and they will be beeping their horn. Not once but 10-15 times. Totally oblivious to what they are doing. Is that lack of critical thinking, or just lacking everything.
9. Tricycles: These are a big polluter and can be very noisy if you are around the main road. Miraculously this was not a problem. Jeepneys and trucks are other big polluters and noisy as well.

Its fair to say that my circumstances were bad, and I might mention they were good before they got bad. But these problems occur because:
1. Tenants have no rights - the contract given to me, which I didnt even sign, offered no protections
2. Landowners have few rights - they can take grievances to a homeowners association in each village. In my case I was surrounded by relatives. On balance that was probably a good thing, as I was friendly with some. Your best chance is to complain, but you have few rights. There are no laws preventing people from doing as they please. Its kind of understandable that poeple work from home, I do. Its just its a pain for me because my job requires thinking.
3. Lot sizes are very small (120-300m2) - so noise is worse
4. Houses are often packed with many family members, a number of whom are likely to be hanging around bored
5. Filipinos are accustomed to noise - which is why they dont hear well, and probably why they tend not to be great thinkers. I dare say they never had a choice.

Employing maids in the Philippines

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There is a great deal of appeal to the idea of living in the Philippines. Its true that you can get a live-in maid for P2500-3000/mth, thats $US50-60/mth, but consider the following:
1. You have to feed her - hopefully not what you are eating otherwise it could get expensive
2. You will have to train her - they really have no idea, so it will be a hands-on job. How to clean, how to cook food in the western style, how to pee straight, because they sanitary standards might not meet yours.
3. You will have to replace her - they tend to take off when they want, whether they go back to the provinces or off to see friends
4. You will have to trust her - they have a nasty habit of stealing things, taking off when you are not in the home. You dare not give them a set of your keys, but they will take off leaving your house unlocked.
5. You should avoid any personal relationships because you might end up facing extortion.

It might be better to just employ a contractor - but hide everything.

What are the bad aspects of living in the Philippines

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I have already addressed this issue on my Expats blog.
There is not much to add except maybe the slow pace or low productivity here.

The attractions of living in the Philippines

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Living in the Philippines is not such an attractive proposition for most people. When I look at the demographics its apparent to me that most of the foreigners whom come to the Philippines do so for the following reasons:
1. Business: Most westerners are stationed here with a foreign company
2. Diplomat: Another group of foreigners are here as diplomats, or as a bureaucrat paid by their government under the administration of the Asian Development Bank, or other aid programs.
3. Retirees: There are alot of old men here that want to enjoy the companionship of young girls. Can't say I blame them, they are gorgeous, and they aren't all poor, uneducated factory girls.

So basically when you look at the demographics its only the seniors that come here. Young people tend to come here for a week or two and thats it. So what is the attraction for the older guys. Well if you focus on where they are living, its readily apparent.
1. Girls: Most retirees live around the girl and beach districts like Angeles City, Subic, Boracay as well as Metro Manila apartments near Makati and Ermita I guess. Whether you are into prostitutes, or just girls to offer you a nursing hand to an 'old soldier', they have the girls to keep you fighting.
2. Cheap cost of living: Yes the Philippines is cheap, but not extraordinarily so when you consider the costs. Much depends on where you live, and how modestly. Its easy enough to buy a $US60,000 apartment in Manila or a house outside the city limits, but utilities are not cheap. If you want a western diet it does not even make sense to eat outside because the shopping malls are owned by just 2 billionaires. Plus add the $US40/mth cost of a visa renewal and you realise that you dont have much left over for those $1 beers. It does not help that everything costs more because you are a foreigner. Of course it helps if you have support from local family.
3. Entertainment: I think the Philippines has among the best live music performers in the world and at little cost. I am not talking about Britney Spears, though she was here, but the local pirated act.
4. Treatment: There is a great deal of respect for foreigners in the Philippines. Well at some level you are a sucker whom might as well feed their families, but I do think there is a genuine respect for 'American values'. I dont know if thats a repudiation of Chinese values, or reflects their appreciation for the US military effort in WWII, but certainly the attitude is strongest among military personnel.

OK, this must have been a bad day because I found some other positives for living in the Philippines. See http://life4expats.blogspot.com/2007/12/living-in-philippines.html.

Where to Live?

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The first priority is deciding where to live. Thart decision depends entirely on what type of life you intend to live, and what you intend to do. I met my partner when I was in Australia, and I've had alot of support from her family. eg. meals, transport, washing, visa assistance, holidays away. Some of these things I have done myself, but actually I've never used a local laundry, but I am guessing no problem. Just make sure you get back what you give.

The most important issue is getting access to the services you need:
1. Trustworth food and a variety of menus - no food poisoning and food that doesnt look at you. eg. Metro Manila, large malls, tourist areas like Subic, Boracay.
2. Places to go out drinking - nice, air conditioned places with cold beer. These can be found in any large city, or where foreign & local tourists go.
3. Shopping malls - preferably a large one because the smaller ones are boring since they have the same old franchise choice all around the country, eg. SM Fairview, SM Mall of Asia, Robinsons Manila & Galleria.

There are other criteria as well:
4. Cool climate - Manila and surrounding lowlands are a little hot. I prefer Lipa City (Batangas), Tagaytay (Cavite) and Baguio. I also like Nueva Eclija, but there is a lack of services here. No big city, but give it another 10 years and it will be good.
5. Clean Air - Manila is really polluted so many foreigners prefer places like Alabang, as its upmarket but close to Manila. I'm at Lipa City, which is 40km from there, but cooler.
6. Nice ambience - Probably the hardest aspect in the Philippines is finding a comfortable ambience because of the pollution, noise and poor infrastructure maintenance. For this reason it makes alot of sense to stay in or buy a resort-style residential condo. More on this issue later.
7. Things to do - I am keen on the outdoors so I want a place where I can get outdoors. This part is proving elusive.
8. Good Beaches - The best beaches I have seen are likely to be on the Pacific Coast because they will be cleaner. Alot of rubbish washes up on the west coast (from Philippines & China), and no one cleans it up. There are good beaches in Zambales & Pangasinan. Boracay is regarded as the best beach, but my favourite was near Sagnay in Albay, but this is a very poor, isolated area, so dangerous for tourists I'm guessing.

I think the big question is - rural or city? I think the answer depends on your local support and your lifestyle. Ideally I'd probably live in Naga City, but I would not live there alone. For people will no support I would live in the city until I found a support base, and travel out from there. I have visited many places by bus. Just get buses to major cities and travel our from there. Once you are in the countryside its easy to get a sense of where jeepneys go.

Getting established

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I have been living in the Philippines for over a year now. This is my 6th trip here I think. The first 2 trips were for business, but were just 'visa stops' out of Japan when I was living there. I decided to come here to meet a girl I met on the internet, and I have not been disappointed in that respect.

Arriving Philippines Airport
There is a levy on taxis picking up from the airport so I think the cost of a taxi is around P400 now. There is a taxi rental agency there - on the left side as you exit the building. If you need money the best place is in the Philippines because its the poorer country. You can get cash at the airport, but you will get a better rate in the city at 'Money Changers'. There are alot around Ermita, which is where tourists tend to stay.

Where to Stay
When you first arrive in the Philippines you have a choice of several places for accommodation. Since you are likely here for a time, you will want cheap accommodation until you find more permanent accommodation. Most accommodation in the Philippines is good for 2. I have several favourite places:
1. New Horizon Hotel: Located near the corner Boni Ave & EDSA Blvd in Mandaluyong City, its fairly close to Robinsons Galleria and SM Megamall, and near Boni Ave Station on MRT Line. They often offer P990/night accommodation but this rate is for Filipinos, so get your Filipino partner to pay if you have one. Foreigners always pay higher. They have a coffee shop with wifi, free breakfast. I think the foreigner rate is P1400/night.
2. Ermita: Ermita is located on Manila Bay. Its a great place to stay because there are many hotels of various standards, anf its close to Makati, Mall of Asia, the bay (which has been improved). A few years ago, after a storm rubbish in the bay used to wash up onto the broadwalk. Lovely! The bay is like a toilet, so it doesnt make a good 'tourist moment'. Maybe it still happens, just they clean it up. There are good bars around Ermita too, though the more upmarket bars are in The Fort and Makati. I usually stay at SlouchHat Restaurant, but actually there are a multitude of places along Del Pilar and Mabini Streets.

If you are giving a taxi directions, ask them to take you to corner of UN Avenue and Del Pilar Street, then from there just walk back towards the airport, and you will find several basic hotels. The Corona Hotel is the more pricey, SlouchHat the most comfortable and friendly. Large rooms, great meeting place, run by an Australian.