Philippines Tax Authority

World Bank Philippines page

1.

Despite the ongoing real estate boom, the Philippines mortgage market is poorly developed. Consequently, few property purchases in the Philippines are financed by loans. Mortgage rates offered by major commercial banks. For example, a 10-year fixed rate mortgage with the Philippine National Bank is available at 11% interest. The borrower therefore absorbs much of the interest rate risk when financing Philippines real estate using a local mortgage. Loans offered by developers (for example Robinson's Land Corporation) are often even higher, ranging from 12% to 18%.

The high cost of borrowing was responsible for a net 0.5% fall in the number of loans approved to investors up to the end of the first quarter of 2007, compared with the same period of 2006. This is despite the housing boom, and is in sharp contrast to the 12.9% increase in loans to the end of 2006.

3.

While the Philippines' Home Development Mutual Fund offers a much lower interest rate of 6% to 7%, and better loan conditions (for example longer payment periods and higher loan-to-value ratios), the amount that can be borrowed is much lower and is therefore of limited interest to individuals pursuing Philippines real estate investment.

4.

Despite the above limitations, Healy Consultants assists clients obtain finance to support Philippines real estate investment in the following ways:

i) Locating competitive property finance through major international banks such as HSBC and ANZ;

ii) Comparing and contrasting different property finance options with our clients, to ensure they are aware of and obtain the best deal to support Philippines real estate investment;

iii) Negotiating banking terms and conditions on behalf of our client;

iv) Preparing business plans and cash flow projections to increase the probability of property finance approval;

5.

Having obtained property finance, Healy Consultants assists clients to open personal and corporate bank accounts to receive rental income and settle mortgage repayments for their Philippines real estate investment.

6.

We also act as an intermediary between the bank and our client at all times wherever possible, minimising the stress of Philippines real estate investment.

7.

For detailed information on transacted property prices in the Philippines, visit our Philippines property market page.

For more information on Philippines real estate investment, call our Singapore office at (+65) 67350120 or contact email@healyconsultants.com