BUILD, BUILD, BUILD PROGRAM PROGRESS

The Build, Build, Build Program is a nationwide, massive infrastructure initiated at the onset of the Duterte administration. It seeks to accelerate infrastructure spending and develop industries that will contribute to robust growth, create job, and improve the lives of Filipinos. The Philippines has long suffered from issues of unemployment and poverty. One of the roots causes of these is weak infrastructure, which has held back foreign investmentscrucial in creating jobs for millions of Filipinos.

A recent study by the Japan International Cooperation Agency finds that traffic congestion in Manila, caused by poor infrastructure, costs Filipinos 2.4 billion pesos daily in 2012, a figure expected to triple by 2030. Meanwhile, the 2017 World Economic Form’s competitiveness report ranks the Philippines 97th in terms of global infrastructure. In addition, a separate United Nations report ranks the country 5th in Southeast Asia in terms of access to physical infrastructure.

It only takes a quick look at the major thoroughfares and the public transport systems of the Philippines to understand why the country experienced major economic setbacks. During rush hours, the roads transform into parking lots, with vehicles inching their way through kilometers of bumper-to-bumper traffic jams. Public transportation is always packed to the doors with passengers, with the rest of thecommuters left waiting on the streets, praying under either scorching heat or crying clouds until they get lucky enough to get a ride home.

The impact of weak infrastructure goes beyond difficult commute.  For Filipino commuters, it means lost time that could have been spent on rest and recreation with family and friends. For businesses, poor infra translates to a dip in productivity and lower returns on investments.

The government targets to spend 8 to 9 trillion pesos from 2017 to 2022 on country-wide infra projects under the Build, Build, Build Program. While previous administrations have relied heavily on private-public-partnership, the Duterte administration is putting emphasis on funding from government revenues as well as government-to-government deals and development assistance, with China and Japan leading the countries under the latter framework.

The President has passed a new tax reform package that is expected to increase government revenues to fund the Build, Build, Build Program. According to Department of Finance Chief economist Karl Chua, up to 70 percent of the additional revenues from the new taxes are earmarked for the program.

“We recognize the urgency of the situation and we are mobilizing all resources to reverse this pitiful state of affairs,” said former Budget and Management Secretary Benjamin E. Diokno. “We were able to hit the ground running in terms of Build, Build, Build, thanks to policy tweaks and political will.”

Where are We Now?

Completed BBB Program Projects

  • NAIA Expressway Phase II

A four-lane, 7.75-kilometer elevated expressway and 2.22-kilometer at-grade feeder road that provides access to NAIA’s Terminal I, Terminal II, and Terminal III, and links the Metro Manila Skyway to the Manila-Cavite Toll Expressway.

  • Parañaque Integrated Terminal Exchange

The Parañaque Integrated Terminal Exchange is an intermodal terminal with multi-level platforms that provides interconnectivity between different transportation modes for Cavite and Batangas, going in and out of Metro Manila. The PITX features passenger terminal buildings, loading and unloading bays, staging bays, ticketing and baggage handling facilities, and park-and-ride facilities.

BBB Program Projects Expected for Completion in 2019

  • Pigalo Bridge

The Pigalo Bridge will traverse the Cagayan River in Angadanan, Isabela 30 meters upstream of the old bridge. The bridge will connect the Isabela municipalities of Angadanan and San Guillermo.

  • Mactan-Cebu International Airport  

The project involves the construction of a new world-class passenger terminal building in the Mactan-Cebu International Airport, which will have a capacity of 8 million passengers every year. Upgrades and changes that have been implemented include a greener terminal building, renovated washrooms, new self-service check-in kiosks, and new counters for immigration, customs and quarantine.

  • Night Rating of Naga, Dumaguete, and Cotabato Airports

The project aims to spread peak hour movements away from NAIA, by enabling flights to fly from NAIA at off-peak hours to regional, night-rated airports. The airports of Naga, Dumaguete, and Cotabato are just the first of many airports that will be undergoing the upgrade.

Infrastructure Projects in Metro Manila from 2020 to 2022

  • MRT-LRT Common Station – 2020

The MRT-LRT Common Station, also known as the North Avenue Grand Central Station, will connect the LRT-1, MRT-3, and the upcoming MRT-7 and Metro Manila Subway.

Located at the corner of North Ave. and EDSA, the 13,700 sq.m. common station will look to provide passengers with ease of transfer and interconnectivity between public transportation options. It is expected to serve 478,000 passengers per day once it opens.

  • Manila Bus Rapid Transit 1 – 2020

The Metro Manila Bus Rapid Transit Line 1 project covers 12.3 kilometers from Quezon Memorial Circle to Manila City Hall, passing through Elliptical Road, Quezon Ave., and España Boulevard.

The closed system, which is expected to serve 291,500 passengers per day in its first year, featured service lanes at the center to maintain a good flow of people, with interchanges with the MRT-3, PNR, LRT-1, and currently under construction MRT-7.

  • Cavite-Laguna Expressway – 2020

The Cavite-Laguna Expressway will connect the Manila-Cavite Expressway and the South Luzon Expressway. The four-lane, 44.20-kilometer tolled expressway will start from the Cavitex in Kawit, Cavite, and end at the SLEX-Mamplasan Interchange in Biñan, Laguna.

The Cavite-Laguna Expressway will feature eight interchanges, namely Kawit, Open Canal, Governor’s Drive, Aguinaldo Highway, Silang East, Sta. Rosa-Tagaytay Road, Laguna Blvd., and Technopark.

  • Metro Rail Transit 7 – 2021

The MRT Line 7 will traverse Quezon City and Caloocan in Metro Manila, extending into the nearby province of Bulacan.

The new line will start at the under-construction North Avenue Grand Central Station, passing through the Quezon Memorial, University Avenue, Tandang Sora, Don Antonio, Batasan, Manggahan, Doña Carmen, Regalado, Mindanao Ave., and Quirino stations in Quezon City; the Sacred Heart and Tala stations in Caloocan, then final the San Jose del Monte station in Bulacan.

  • Light Rail Transit 1 Extension – 2021

The project will expand the current LRT Line 1 system to the south by an additional 11.7 kilometers, starting from the end of the existing line in Baclaran and into the cities of Parañaque and Las Piñas.

The extension initially includes eight new passenger stations, namely Aseana Blvd. Station, MIA Station, Asiaworld Station, Ninoy Aquino Station, Dr. Santos Station, Las Piñas Station, Zapote Station, and Niyog Station. There is a provision for two additional stations, namely Manuyo Station and Talaba Station.

  • Clark Railway – 2021

The Clark Railway, also known as the North-South Commuter Railway, is a 147-kilometer railway system that will connect Clark, Pampanga to Calamba, Laguna. The project will consist of three interconnected systems, namely the PNR Clark Phase 1, the PNR Clark Phase 2, and PNR Calamba.

PNR Clark Phase 1, which is expected to be completed in 2021, will build a 37.6-kilometer railway system that connects Tutuban, Manila to Malolos, Bulacan. Expected to serve 300,000 daily passengers in its opening year, the rail line will cut the travel time between the two locations to about 35 minutes, from more than 1 hour and 30 minutes.

  • NLEX-SLEX Connector Road – 2021

The NLEX-SLEX Connector Road will look to decongest traffic in Metro Manila by offering an alternative to C-5 Road,  EDSA, and other major thoroughfares. It is an 8-kilometer, four-lane elevated expressway over the Philippine National Railway right of way, starting from C-3 Road in Caloocan and passing through Manila over España and PUP, Sta. Mesa to connect to Metro Manila Skyway Stage 3.

The project will make it much faster to travel between NLEX and SLEX, which currently takes over an hour. Once the NLEX-SLEX Connector Road is completed, the travel time is expected to be reduced to between 15 minutes and 20 minutes.

  • Metro Manila Subway – first three stations in 2022, full completion by 2025

The project will be the first subway system in the Philippines. It will stretch for 35 kilometers from Valenzuela to Parañaque, promising to reduce the travel time from Quezon City to NAIA to just 42 minutes and to accommodate 370,000 passengers per day once it opens.

The 15 planned stations for the Metro Manila Subway are Quirino Highway, Tandang Sora, North Ave., Quezon Ave., East Ave., Anonas, and Katipunan in Quezon City; Ortigas North and Ortigas South in Pasig; Kalayaan in Makati; Bonifacio Global City, Lawton East, Lawton West, and FTI in Taguig; and NAIA Terminal 3 in Pasay.

II. BBB Program Heat Map

  • Luzon
    • San Fernando, La Union and Baler, Aurora
      • Broadband Backhaul Modular IT Facilities
    • Tuguegarao, Cagayan
      • Night Rating of Tuguegarao Airport
    • Kabugao and Calanasan, Apayao and Solsona, Ilocos Norte
      • Apayao – Ilocos Norte Road
    • Angadanan and San Guillermo, Isabela
      • Pigalo Bridge
    • Cauayan, Isabela
      • Night Rating of Cauayan Airport
    • Urdaneta, Pangasinan
      • Urdaneta City Bypass Road
    • San Jose Del Monte, Bulacan
      • MRT Line 7
    • Tarlac City, Tarlac
      • Central Luzon Link Expressway
    • New Clark City, Pampanga
      • New Clark City- Agro-Industrial Park
    • Mabalacat, Pampanga
      • Clark International Airport Expansion Phase 1
    • Valenzuela
      • NLEX Harbor Link, Segment 10
    • Caloocan
      • NLEX – SLEX Connector Road
    • Antipolo, Rizal
      • LRT Line 2 East (Masinag) Extension Project
    • Taytay, Rizal
      • Laguna Lake Highway
    • Marikina
      • Pasig-Marikina River Channel Improvement Project, Phase III
    • Mandaluyong
      • Mandaluyong Main Drainage Project, Phase II
    • Taguig
      • BCDA Smart City Solutions
      • Taguig City Integrated Terminal Exchange
      • Bonifacio Global City to Ortigas Road Link Project, Sta. Monica-Lawton Bridge and Viaduct
    • Pasay
      • NAIA Expressway Phase II
    • Parañaque
      • Parañaque Integrated Terminal Exchange
    • Bacoor, Cavite
      • LRT 1 South (Cavite) Extension Project
    • Naga, Camarines Sur
      • Night Rating of Naga Airport
    • Matnog, Sta. Magdalena, and Bulusan, Sorsogon
      • Matnog – Sta. Magdalena – Bulusan Road
    • Daraga, Albay
      • Bicol International Airport Development Project
    • Puerto Princesa, Palawan
      • Bahile – Oyster Access Road
      • Puerto Princesa Airport Development Project

NCR Residential Insight

Colliers believes that developers should be looking at fringe areas for future redevelopments.There is a shortage of available land in major business districts, such as the central business districts of Makati and Bonifacio Global City.

More and more mid-income households are upgrading to condo living, particularly in fringe areas, such as Quezon City, Manila, Caloocan-Malabon-Navotas-Valenzuela (CAMANAVA), Ortigas fringes, Makati fringes, and Pasay-Paranaque areas.The projects under the Build, Build, Build Program in these areas will further drive this demand, especially because of the program’s aggressive development outside of central business districts.

NCR Commercial Insight

Colliers says that firms participating in the Build, Build, Build Program occupy larger office spaces.This is particularly true for engineering and construction firms in Makati, Bonifacio Global City, and Quezon City. As infraprojects continue for several years, the demand from such firms for office space will be bullish.

Meanwhile, Colliers urges developers to maximize their projects close to the infra activities that will roll out in the next two or three years. Colliers specifically cited the proposed Skytrain monorail that will connect MegaworldUptown Bonifacio to the MRT station in Guadalupe as an example of a developer taking advantage of upcoming new and upgraded infrastructure.

  • Visayas
    • Tacloban
      • Leyte Tide Embankment Project
    • Cabatuan, Iloilo
      • Iloilo Airport – Operations, Maintenance and Development Project
    • Silay, Negros Occidental
      • Bacolod Airport – Operations, Maintenance and Development Project
    • Bacolod City, Bacolod
      • Bacolod Economic Highway
    • Dumaguete, Negros Oriental
      • Night Rating of Dumaguete Airport
    • Cebu City
      • Cebu Bus Rapid Transit
      • Metro Cebu Expressway
      • Mactan-Cebu International Airport Project
    • Panglao, Bohol
      • Bohol-Panglao International Airport Development, Operations and Maintenance Project
  • Mindanao
    • Cagayan de Oro
      • Modernization of RORO Transport System
    • Dipolog, Zamboanga del Norte
      • Night Rating of Dipolog Airport
    • Zamboanga City, Zamboanga del Sur
      • Zamboanga City By-Pass Road
    • Pagadian, Zamboanga del Sur
      • Night Rating of Pagadian Airport
    • Tangub, Misamis Occidental
      • Panguil Bay Bridge
    • Laguindingan, Misamis Oriental
      • Laguindingan Airport – Operations, Maintenance and Development Project
    • Ozamis, Misamis Occidental
      • Night Rating of Ozamis Airport
    • Datu Odin Sinsuat, Maguindanao
      • Night Rating of Cotabato Airport
    • Agusan del Sur, Bukidnon
      • East-West Lateral Road
    • Tagum, Davao del Norte
      • Mindanao Railway: Tagum-Davao City-Digos Segment
    • Davao City, Davao del Sur
      • Davao City By-pass
      • Davao Airport – Operations, Maintenance and Development Project
    • Midsayap, Cotabato
      • Pinguiaman Bridge

 III. Impact of BBB Program on Real Estate Supply

Colliers International Philippines expects the Build, Build, Build Program to drive the country’s property sector, particularly real estate supply.

Public infrastructure spending has been increasing by 21 percent per year from 2015 to 2017.This outpaces the annual growth of private constructionspendingby 7 percent over the same period. With the Duterte administration’s Build, Build, Build program, the funding allocation for infrastructure projects will be sustained not only in Metro Manila, but also in other parts of the Philippines, according to Colliers.

Colliers expects that the infrastructure projects will drive the strategies of developers within and outside of Metro Manila. This will include more office and residential projects outside of Metro Manila, as developers take advantage of the infrastructure projects that are set to go online over the next few years.Developers will look in to providing real estate options for both businesses and families.

As mass transportation projects are completed, developing cities outside of Metro Manila will become more accessible. This will create demand for commercial and office spaces as businesses expand to these newly accessible locations. The influx of businesses will lead to increased demand for workers, who may have to move to these cities for better opportunities.

The multitude of Build, Build, Build projects in Northern and Southern Luzon will encourage real estate development firms to acquire parcels of land in these regions, per Colliers. The firms will desire to gain strategic footholds with their future projects, particularly in Batangas, Bulacan, Cavite, Laguna, and Pampanga. These provinces stand to benefit from the various rail, expressway and toll road projects, which are expected to be completed between 2020 and 2022.

Real estate developers will need to act now. It is crucial that their projects be completed around the same time that the infrastructure projects under BBB Program are finished. Or, lose lucrative gains. From the looks of it, the BBB Program is on schedule in most of its projects. It might be less risky to develop properties once infra projects ae done, but there might be little land left to buy by then.

IV. Impact of BBB Program on Real Estate Demand

The Build, Build, Build Program has increased the demand for properties, most notably in the provinces that are among the main beneficiaries.

Bulacan is set to benefit from the MRT Line 7 and PNR Clark Phase 1. Cavite and Laguna will soon gain better access to each other with the Cavite-Laguna Expressway. Batangas and Pampanga are two promising provinces to keep an eye on.

Lamudi data listing from 2017-2018 showsa surge in demand for properties in  the provinces of Bulacan, Cavite, Laguna, Batangas, and Pampanga. There is increase in page views, sessions, and leads, defined as follows:

  • Page viewis a metric defined as the total number of pages viewed.
  • Session is the time period a user is active on a site. If a user is inactive for 30 minutes or more, any future activity is attributed to a new session. Users that leave the site and return within 30 minutes are counted as part of the original session.
  • Leads are users who have shown interest by providing their contact information.

The table below shows the percentage for the total page views, sessions, and leads:

Bulacan 2017 2018
Page views 46.34% 53.66% 100.00%
Session 58.62% 41.38% 100.00%
Leads 18.23% 81.77% 100.00%
Cavite 2017 2018
Page views 43.32% 56.68% 100.00%
Session 52.20% 47.80% 100.00%
Leads 20.50% 79.50% 100.00%
Laguna 2017 2018
Page views 51.96% 48.04% 100.00%
Session 68.71% 31.29% 100.00%
Leads 21.36% 78.64% 100.00%
Batangas 2017 2018
Page views 44.97% 55.03% 100.00%
Session 56.98% 43.02% 100.00%
Leads 18.72% 81.28% 100.00%
Pampanga 2017 2018
Page views 38.93% 61.07% 100.00%
Session 56.30% 43.70% 100.00%
Leads 10.91% 89.09% 100.00%

There is a significant jump in generated leads for listings in Bulacan, Cavite, Laguna, Batangas, and Pampangaas more infrastructure projects under the Build, Build, Build Program nearcompletion in 2018. This is likely because potential homeowners and investors are starting to see how the projects will improve accessibility and livelihood in these provinces and are now looking to gain a foothold as the projects start going online.

The demand for real estate properties in these five provinces has extended into this year, withsignificant gains between Q4 2018 and Q1 2019.

% increase Q1 2019 vs Q4 2018 Bulacan Cavite Laguna Batangas Pampanga
Leads 37.81% 20.95% 29.77% 24.27% 21.04%

The leads generated increases by at least 20 percent, with Bulacan the highest at nearly 38 percent. These statistics likely pointto a continuing trend of growing demand for properties in these areas, especially as several important Build, Build, Build Program projects are set to be completed between 2020 and 2022.

The Build, Build, Build Program looks to foster economic growth in areas outside of Metro Manila. Even before the completion of the infrastructure projects, Lamudi data showthat the real estate industry is already seeing unprecedented growth, in terms of demand for properties, in provinces where interest levels were low before the start of the program.

V. Conclusion

The Build, Build, Build Program looks to improve the infrastructure of the Philippines as a direct response to the problems of unemployment and poverty. The weak infrastructure of the country is one of the factors that have limited the influx of foreign investments, which is important for the creation of job opportunities for Filipinos.

Traffic congestion in Manila, rooted in the problem of poor infrastructure, costs Filipinos php 2.4 billion per day in 2012, a loss expected to triple by 2030. The Philippines is ranked 97th in the world in terms of infrastructure by the 2017 World Economic Forum’s competitiveness report.

To start addressing the glaring issue, public spending on infrastructure is expected to be between 8 to 9 trillion pesos from 2017 to 2022, funded by government revenues and assistance from other countries such as China and Japan.

The completed projects of the NAIA Expressway Phase II and the Paranaque Integrated Terminal Exchange have set the stage for the potential of the program. Meanwhile, projects nearing completion such as the MRT-LRT common station in 2020, the Metro Rail Transit 7 in 2021, and the first three stations of the Metro Manila Subway in 2022, will look to improve the daily lives of the Filipinos. In fact, the Build, Build, Build Program projects that are not yet finished are already making an impact on the markets, particularly in the real estate industry.

The Build, Build, Build Program is creating greater supply in the real estate market, as developers anticipate and prepare for higher demand.  The program is creating greater demand for real estate properties, particularly in areas outside Metro Manila. Many individuals, families, and businesses will reap the benefits due to the potential improvements in accessibility, job opportunities, and commercial expansion.

What’s more, the programis not only looking to serve Metro Manila. It is a far-reaching initiative that seeks to spark opportunities in the provinces, to spread the potential of economic growth. Specific areas already seeing the effects of the program on the real estate Industry include the provinces of Bulacan, Cavite, Laguna, Batangas, and Pampanga. As Lamudi listings show, the demand for properties in these areas have steadily increased ever since the present administration launched the Build, Build, Build Program. It is worth noting that the number of leads Lamudi generated in these provinces has increased by 20 percent between Q4 2018 and Q1 2019.

As the Build Build, Build, Build Program charges over the next few years, it will drive the Philippine real estate industry to greater heights.Developers will seek to provide adequate supply to meet the demand for properties from individuals, families, and businesses who wish to take advantage of the benefits provided by the new infrastructure projects.

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