By Jennifer P. Rendon
Iloilo City has gained recognition as a UNESCO Creative City of Gastronomy, but it offers more than just culinary delights, festivals, and tourist attractions. It extends beyond its historical charm, including centuries-old Catholic churches, Spanish colonial and American-era architecture, and heritage homes.
The city also presents a compelling opportunity in the property market. Joey Bondoc, head of research at Colliers International Philippines, highlighted Iloilo’s competitive advantages, which contribute to the bullish property market.
Iloilo’s strengths include its infrastructure, young workforce, BPO competitiveness, relatively affordable cost of living, and dynamic retail landscape.
Bondoc said infrastructure plays a significant role in boosting the Philippine property market. The country allocates 5 to 6 percent of its gross domestic product (GDP), equivalent to around PHP 1 trillion, to infrastructure projects like subways, airports, and expressways.
Several large infrastructure projects planned for Iloilo have attracted investor interest. One of these is the Panay-Guimaras-Negros Link Bridge, a 32.5-kilometer project estimated to cost PHP 187.6 billion. The bridge aims to improve connectivity, benefiting businesses and commuters.
Additionally, the 117-kilometer Panay Railway, with an estimated cost of PHP 86 billion, is undergoing a feasibility study. The Iloilo-Capiz-Aklan Expressway, projected to span two cities and 20 municipalities across three provinces, is another enticing project for investors.
The Iloilo-Sta. Barbara Rapid Bus Transit, with a project cost of PHP 70 billion, is also in the works, along with the expansion of the Iloilo International Airport, which has a budget of PHP 6.9 billion.
In 2019, Iloilo Airport accommodated 2.4 million passengers, double its capacity of 1.2 million, underscoring the need for its expansion.
Bondoc emphasized that properties near public infrastructure projects hold strong potential for price increases, offering excellent capital appreciation and rental prospects.
In contrast, Metro Manila has seen a reduced demand for vertical developments. Pre-selling condominium launches dropped by 65 percent in the first half of 2024 compared to the previous year, and pre-selling take-up declined by 58 percent.
However, developers are shifting their focus to horizontal developments, such as resorts and beachfront properties, capitalizing on the recovery of the Philippines’ leisure and tourism sector. In Western Visayas, the share of loans has risen from 4 to 6 percent.
Bondoc noted a growing demand for residential properties in Iloilo, particularly for house-and-lot and lot-only units. The pre-selling condominium market in Iloilo is also beginning to recover. Master-planned communities have been launched, further contributing to the city’s growth.
While Iloilo remains a relatively small market compared to Metro Manila, it has exceeded industry averages in terms of property appreciation. House-and-lot prices in Iloilo are increasing by 5 to 12 percent annually, a promising indicator for investors.
“When investing, it’s always about location, and Iloilo is undoubtedly a property hotspot,” Bondoc said, adding that early buyers can expect good returns once planned infrastructure projects are implemented.
Fueling the Economy
The Philippines has maintained a steady growth rate of 6.3 percent, making it the second fastest-growing economy in Southeast Asia, behind Vietnam. Remittances, which reached $37 billion last year, have been a key driver of this growth.
Western Visayas accounted for about 9 percent of the total Overseas Filipino Worker (OFW) deployment in 2022, surpassing Central Visayas and the Davao Region. A significant portion of remittances is channeled into Western Visayas, boosting its property market.
Western Visayas, Central Luzon, CALABARZON, the National Capital Region, Central Visayas, and the Davao Region accounted for 91 percent of loans granted by Philippine banks.
The region’s economy has also drawn in investors. According to the Philippine Statistics Authority (PSA), the country’s gross domestic product (GDP) grew by 5.5 percent in 2023, while Western Visayas achieved a faster 7.2 percent growth rate.
This economic performance, coupled with OFW remittances, has prompted developers to launch new projects and expand their residential footprint in areas like Iloilo Business Park.
Bondoc said Iloilo continues to attract interest from BPO companies, property investors, and foreign buyers, including Filipinos working abroad.
“Iloilo remains an attractive and competitive city in the Philippines. If you compare it with other cities, it ranks among the top,” Bondoc noted.
In the 2024 Cities and Municipalities Competitiveness Index, Iloilo ranked seventh in economic dynamism, first in government efficiency, ninth in infrastructure, and fifth in resiliency and innovation.
Business chambers have recognized the strong partnership between the private sector, developers like Megaworld, and the city and provincial governments.
Office Market Growth
Iloilo’s office space market has also flourished, driven by demand from BPO companies expanding outside Metro Manila. Bondoc said Iloilo is a preferred location for firms seeking office spaces in the Visayas region.
In addition to traditional BPO firms, the city attracts outsourcing companies specializing in software engineering, legal transcriptions, legal management, and game and web development. Demand for office spaces in master-planned communities is growing.
Iloilo’s millennial and Gen Z-dominated workforce further enhances its appeal to BPO firms. Bondoc noted that 66 percent of Iloilo’s population is of working age, contributing positively to the city’s economy.
With around 7,000 graduates annually, Iloilo presents an attractive location for BPO companies and other investors.
Expanding Beyond 2024
Bondoc predicted that Iloilo’s property market will continue to expand beyond 2024, driven by its quality infrastructure, young workforce, BPO competitiveness, and affordable cost of living.
He also highlighted the thriving retail landscape, which makes Iloilo an appealing destination for expatriates and investors alike.
