The property market in the Philippines could be affected even though it has one of the fastest growth rates in the world.
The reason for the slump is Donald Trump. In December, Trump threatened American companies that outsource their work with a 35% tax on their products. Trump is also after companies that are considering expanding their businesses out of America.
In the Philippine economy, the BPO service sector and remittances are pillars. They contribute 6 and 10 percent to the GDP annually.
Three-quarters of the $23 billion BPO service sector in the Philippines are US companies.
Due to Trump’s anti-outsourcing stance, American BPO service companies are putting their expansion plans on hold which will slow down the office market in the Philippines.
The expected absorption rates for 2017 – 2018 in Manila have dropped from 80% and 85% to 30% and 10 % respectively.
Philippine President Rodrigo Duterte erratic outbursts which included threatening China and straining the relationship with former US President Barack Obama are causing concerns.
His crackdown on drugs has killed over 6,000 people since June 30, 2016. This is dampening expansion of American companies into the Philippines soil.