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Cushman & Wakefield Comments on Full Year 2020 Philippine GDP Growth Rate

Claro Cordero Jr. • 28/01/2021
As the country underwent one of the longest and harshest lockdowns in the world due to the spread of COVID-19, the Philippine economy contracted by -9.5% in 2020, the lowest on record (post-World War) GDP growth rate of the country. The underwhelming performance of the economy has greatly affected the Philippine real estate industry, as the growth of its major demand drivers has been crippled by the implementation of the strict community quarantine measures. The Construction sector contracted by -25.3% — one of the biggest contributors to the decline of GDP growth in Q4 2020. 

Along with the fresh policies to be implemented by the government to arrest the downward trend of the economy this year, there are other stimulus measures that will likely put the Philippine real estate sector on its growth track. Apart from improving the competitiveness of the credit sector by keeping interest rates low, the advancement of digital technology will be able to assist the sectors, such as those  working-from-home  and the boom in  e-commerce, that greatly depend on connectivity. The swift passage into law of important pending legislations, such as the Corporate Recovery and Tax Incentives Reform Act (CREATE) which seeks to reduce the corporate income tax, and  the Financial Institutions Strategic Transfer (FIST) Act which will free up the banking system from bad loans and nonperforming loans – are seen to relieve the burden on  the micro, small and medium enterprises (MSMEs) severely affected by the pandemic. The implementation of these effective stimulus measure will ensure timely and targeted assistance to enhance the investment and consumer confidence levels, which will help lead the full recovery of the real estate sector in the mid-to long-term.