INDUSTRY ANALYSIS

The real estate industry is highly dependent on the performance of the national economy as the
growth of the industry has a direct correlation with the state of the national income and effective
disposal income of the people. As disposable income increases, expenditures on housing will
increase proportionately. Furthermore, a stable economy brings about liquidity in the financial
system, thus increasing the sources of funding for housing.

The growth and profitability of the Companies are influenced by the general political and economic
situation. Any political instability in the future may have a material effect on the financial results
of the real-estate companies.

Increase in interest rates and unavailability of affordable financing options affect the demand for
housing. The Company caters to the middle income market, a market which primarily considers
the affordability of monthly amortizations through long term in-house or bank financing schemes.

The Philippine Real-estate market has performed spectacularly, due to robust economic growth.
The growing knowledge process outsourcing industry, aggressive infrastructure spending plans by
the current administration, and the sustained private sector confidence.
The Positive trend in the Philippine real estate sector was experienced in 2015 and 2016, industry
experts and observers are optimistic that the growth will continue in 2017 and expected to be
sustained. According to auditing and advisory firm BDOs Asian Real Estate report, the capital of
the Philippines, Metro Manila, saw major investment from global capitalists, which pushed the city
to be in the same league with its neighbor Bangkok, the capital of Thailand.
 GNP and GDP Gross Value Added in Real-Estate from 2015 Q1 to 2017 Q2
(Source: http://psa.gov.ph/nap-press-release/sector/Real%20Estate,%20Renting%20&%20Business%20Activity)

The data are from the Statistics authority of the Philippines and using the Excel application, the
trend of Real-estate sector in terms of their Gross Value added from First Quarter of 2015 to
Second Quarter of 2017 is going upward or has a positive trend.
There are numerous factors why the real-estate sector is expected to continue its growth, here
are some these reasons:

BPO Industry is continuously expanding and there is shortfall in the available office
spaces.
BPO agents are likely to wish to rent residential spaces near their workplaces due to their
night shift schedules.
60% of the OFW remittances is directly and indirectly accounted to the real-estate sector.
The BPO industry is now one of the countrys biggest sources of revenues, providing employment
to a large number of workers. The Business Process Outsourcing industry is continuously
expanding and the demand for the office space is increasing for there is a shortfall in the
availability of Office spaces.
The positive performance of the offshoring and outsourcing Industry, the growth of Business
Outsourcing Industry (BPO), in the Philippines will continue to support the increasing demand for
residential condominium developments. The rising population of young professionals will likely be
a source of future demand for residential projects and BPO agents are likely to wish to rent
residential spaces near their workplaces due to their night shift schedules. Since BPO agents have
foreign countries as their clientele, their work hours follow suit.
Philippines is the largest remittance recipient in the world with 10.5 million Overseas Filipino
Workers living and working in 210 countries and territories worldwide. According to The World
Bank, it is estimated that 60% of the OFW remittance go directly or indirectly to the real-estate
sector. These OFW remittances power the low-end to mid-range residential property market,
housing projects and mid-scale suburban in regions near Metro Manila.
 Remittances of Filipino Overseas Workers from 1990 to 2015

The Overall economic health of the Philippines is stable and continuously growing. The GDP growth
of the Philippines at the end of 2016 is 6.8% and as of June 2017, according to World Bank the
GDP growth of the Philippines is at 6.9%.

Philippines is considered as the 10th Fastest growing economy in the world and will remain
strong this 2017 according to World Bank.