Philippines property market resilient amid corruption issues

MANILA, Philippines — As corruption is an issue that affects us all, its impact on various industries cannot be denied. However, despite massive corruption issues recently brought into the spotlight in the Philippines, the property market remains resilient as stakeholders focus on improving compliance and transparency initiatives.

“While corruption remains a long-standing concern, the Philippine property market continues to show resilience,” KMC Savills chief executive officer Joe Curran told The STAR in an email.

“Investor sentiment has become more discerning rather than withdrawn. Many are now focusing on developers and locations with strong compliance, transparency and ESG (Environmental, Social and Governance) practices. The government, in turn, has been introducing digital systems for permitting and land titling as well as implementing public financial management reforms to improve accountability and investor confidence,” he added.

In a recent interview with reporters, Leechiu Property Consultants chief executive officer David Leechiu said the impact of corruption issues on the property market is likely temporary.

“There might be a pullback in transaction volume, but I don’t think prices are going to fall. I think this is highly temporary,” Leechiu said.

“As far as the property market is concerned, we are very blessed because the office market continues to perform very strongly. Despite all the problems of the world and this country, the property market continues to perform very well. Data centers, malls, office tenants and residential tenants are expanding. And what you see, which is the depression in the stock market and the depression in the currency, it’s all sentiment-driven,” he added.

Caution on luxury market

Asked to comment on reports that the luxury residential segment has seen weaker demand since corruption issues regarding flood control projects surfaced, Curran said there has been some caution.

“It’s true that the luxury segment has seen some caution, particularly among speculative investors. However, this is balanced by continued interest from end-users, expatriates and overseas Filipinos who view prime developments as long-term lifestyle and investment assets,” Curran said.

For licensed real estate broker Michelle Daygo, demand in the luxury property market continues to remain strong, noting that she has not personally seen weaker demand since recent corruption issues surfaced.

“It’s just a certain portion of the buyers that are involved in politics. So, in my case, the take-up of luxury properties is not affected,” Daygo, president and founder of Kuaima Realty, said in a phone interview.

Daygo emphasized that buyers in the luxury market remain mostly businessmen.

According to LPC, sales in the upper-middle to luxury segments rose sharply in the third quarter of the year, with the luxury segment posting a 214 percent increase in unit sales from the same period a year ago.

With some caution among speculative investors in the luxury market, Curran said developers are responding by elevating quality standards — integrating sustainability certifications, enhancing property management services and aligning more closely with global luxury benchmarks.

“These efforts are reinforcing trust in the premium market even amid broader political or governance challenges,” he added.

Zero tolerance for corruption

Aside from the efforts of the private sector, the government has also introduced measures geared toward addressing corruption in the property sector, particularly the housing market, such as the Department of Human Settlements and Urban Development’s (DHSUD) zero-tolerance policy for corruption, which is among its recently launched eight-point agenda.

Senior Undersecretary Sharon Faith Paquiz explained that as part of its zero-tolerance effort, the agency launched a zero-backlog program that aims to resolve pending regulatory cases filed with the agency.

“When we launched the zero-backlog program, we inventoried more or less 3,100 to 3,500 cases pending since 2020, and we were able to zero it out in a six-week period,” she said in a press conference last week.

“What is good about this is that the applications for licenses to sell that have been pending or sleeping in the regional offices for the longest time have been released within a six-week period. It boosts the housing industry by issuing the necessary permits and licenses,” she added.

Paquiz explained that “too many delays breed corruption” when it comes to the issuance or release of required permits and licenses, as it builds the perception that one must pay for faster processing.

“The longer the application, the more they will be encouraged to ask how much they need to give for it to be released. This is what we are trying to kill in the department. It has to be released within a certain period of time,” she said in a mix of English and Filipino.

Improvement in transparency

The Philippines still has room for improvement when it comes to real estate transparency, as it ranks 45th among 89 countries in the Global Real Estate Transparency Index released by Jones Lang LaSalle in 2024. The country posted a composite score of 2.95, placing it among semi-transparent markets. This is three spots lower than its 42nd rank in 2022.

Based on the 2024 report, the Philippines posted its highest rank in the market fundamentals category, ranking 29th, while its lowest rank was in the regulatory and legal category, placing 55th. Other areas analyzed by the report include investment performance (43rd rank), listed vehicles (34th), transaction process (50th) and sustainability (50th).

As part of the country’s efforts to boost transparency in the real estate sector, the Real Property Valuation and Assessment Reform Act was signed in June last year. The measure will standardize the conduct of appraisal and valuation in the country through the creation of Philippine Valuation Standards, which push the use of prevailing market values.

In an earlier statement, Santos Knight Frank chairman and CEO Rick Santos said the law is an important step in raising valuation standards in the Philippines and encouraging transparency in the real estate sector.

He noted that global investors look at market transparency when entering emerging markets such as the Philippines, and the measure is a vital instrument to drive more investments to the country.

The law mandates a nationwide update of the Schedule of Market Values (SMVs), which will replace the BIR’s zonal values and local government units’ fair market values. It also covers the creation of a Real Property Information System, which will serve as a database of all real property transactions including sales and leases.

“If reforms continue alongside greater transparency initiatives, the Philippines is well-positioned to sustain growth in the medium to long term. The country’s young population, strong domestic consumption and continued urbanization will remain key drivers,” Curran said.

He emphasized that collaboration between the public and private sectors — including digitalization of real estate transactions, infrastructure partnerships and the promotion of sustainable developments — are all positive steps that can mitigate corruption-related risks and help attract more institutional capital into the country.

“Overall, while corruption remains an ongoing challenge, both the government and the private sector have made visible efforts toward modernization, transparency and stronger governance — factors that are slowly but surely enhancing investor confidence in the Philippine property market,” Curran said.