In the Philippines, where a fifth of the country lives beneath the poverty line, locals have a new obsession: fine art.
Salcedo Auctions is gearing up for its flagship annual sale in September that last year left standing room only beneath the chandeliers of the ballroom in Manila’s five-star Peninsula Hotel. The inaugural 2010 event was held under a tent in a shopping mall and attracted about a fifth of today’s crowds.
“Every event, there are always new faces,” said Richie Lerma, director and co-founder at the auction house. “There are a lot of new affluent who have a shopping list of artists.”
Packed art auctions, luxury home sales and exclusive resorts are among telltale signs of an unprecedented rise in rich Filipinos. While the Philippines still lags the likes of South Korea and Taiwan in dollar millionaires, rapid wealth creation is prompting brokerages and finance firms such as Credit Suisse Group AG to tap what was once Asia’s economic basket case.
An outsourcing boom, record remittances from overseas workers and low interest rates have kept Philippine economic growth above 6 percent for most of the past six years. High net-worth individuals -- those possessing at least $5 million -- are tipped to increase more than 80 percent in the five years through 2022, the third-fastest pace in the world.
The race to woo millionaires is on. Credit Suisse is opening a Manila unit of its wealth management business, joining a growing number of private banks such as Julius Baer Group Ltd. that are targeting the Philippines and Southeast Asia. They’re turning to the region’s emerging rich as growth in the more mature markets of Europe and Hong Kong slows.
“We see a huge potential in the Philippines among Asia-Pacific,” said Christian Senn, private banking market group head for the Philippines at Credit Suisse, who estimates that the nation’s millionaire market will grow 10 percent annually. “Otherwise, we wouldn’t be here.”
Jump on a private jet in Manila, and within an hour you’ll find exclusive resorts offering a reprieve from city life. Balesin Island Club provides 7.3 kilometers of white-sand beaches strictly for members’ use only, while millionaires can laze on their own private island at the Amanpulo resort.
Back in the capital, high-end department stores selling luxury brands such as Balenciaga and Lanvin have sprouted. While still in its infancy, the Philippines’ luxury goods market is tipped to grow more than a third to almost $2 billion in the five years through 2022, according to Euromonitor International Plc.
Poverty Trap