Now, the reality check: the brashness of new wealth lies in stark contrast with the lives of the Philippines’ poor. About a fifth of the nation’s more than 100 million people live on less than $3.20 a day, the World Bank estimates. But it’s also optimistic that economic growth is helping to lift a million Filipinos out of that category each year.
President Rodrigo Duterte is building infrastructure and industries outside the capital region, which accounts for a third of the $314 billion economy, to help narrow the stubbornly wide income gap. To be sure, his efforts are being threatened by the fastest consumer price-gains in at least five years.
More millionaires means opportunities for local lenders, says Stella Cabalatungan, executive vice president at the private banking unit of BDO Unibank Inc., the nation’s largest bank. BDO is gearing up for the stiffer competition from offshore private banks by taking on more wealth advisers, as it seeks to boost ties with asset managers locally and overseas.
The central bank has received fresh inquiries from offshore lenders about opening offices locally, Bangko Sentral ng Pilipinas Deputy Governor Chuchi Fonacier said in an interview this week.
Penthouse, Pool
Real estate brokers and developers are also enjoying the spoils. Luxury condominiums in Manila’s key business districts have been snapped up by the newly rich, with some projects selling out just months after their launch. Ayala Land Inc. is building a high-rise condominium block in the main financial district, and sold the three-level penthouse-with-pool for 477 million pesos ($8.9 million).
Indeed, prime Manila residences are becoming scarce, and with prices nearing the costs of offshore property, the nation’s new millionaires are now looking further abroad.
“Manila’s a sellers’ market, so for the wealthy it’s becoming a good idea to go out of the country for property,” said Toby Miranda, residential sales manager at Santos Knight Frank, the London-based brokerage’s Philippine affiliate. “They’re either looking for a good place to invest in or preparing for the time they’ll send their kids abroad to study.”
Knight Frank has this year marketed London residences to wealthy Filipinos, and partnered with U.S. firm Douglas Elliman Real Estate to offer homes in New York and Los Angeles in May.
Back in Manila, Salcedo Auctions is busy seeking consignments for its September event that it calls “The Well-Appointed Life.” As well as artworks, the sale will include fine jewelry, antiques and rare automobiles.