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Economic ‘invasion’ — boon and bane?

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Rafael M. Alunan III

To Take A Stand

Economic ‘invasion’ -- boon and bane?

In its May 4 report, Bloomberg news revealed that in Metro Manila’s main financial district and its fringes, signs of new inhabitants are everywhere.

“Around 100,000 migrants, mainly Chinese mainlanders, have slipped into Metro Manila since September 2016. The deluge is rippling through the city’s real estate market. While Chinese investors have been snapping up high-end housing in HK, London and NYC, Manila’s case is motivated by the booming gaming industry.”

Bloomberg reports that more than 50 offshore gambling companies are catering to overseas Chinese punters ever since the government began awarding licenses 19 months ago. Although bets are placed remotely, the operators still need Chinese speakers to handle marketing and customer queries to payment processing for overseas clients.

The resulting migration is pushing home prices skywards in areas favored by them. It’s reenergizing Manila’s commercial property market as owners convert offices and shops into gaming centers and boosting the bottom lines of local developers such as Megaworld, DMCI, Ayala Land, Inc. and SM Prime Holdings, Inc., the report said. Many lot and land owners are delighted by this.

“While no official numbers are publicly available, people familiar with the matter said that offshore gaming operators in the Philippines employ about 200,000 workers, predominantly Chinese, and more than half of them have arrived in the capital region since late 2016. The Bureau of Immigration said it couldn’t immediately provide the data.”

The influx promises to boost the nation’s economy and is helping to strengthen ties with China — a priority of the incumbent administration. The caveat here is that it leaves the property market vulnerable in the event of an abrupt shift in online gaming or immigration policies from either country.

The perils of relying too heavily on Chinese buyers became painfully obvious last year in the Malaysian enclave of Johor Bahru, which has been grappling with a glut of vacant homes after China imposed controls on investments in overseas property and demand abruptly dried up, the report said.

“Concentration risk could be a potential concern,” said Emilio Neri, an economist at the Bank of the Philippine Islands in Manila.

Others see only opportunities. Qiang Huang, a realtor based in Hefei, expects Manila’s home prices to get a boost from the steady stream of Chinese workers catering to offshore gaming customers and mainland clients frequenting brick-and-mortar casinos, the report said.

Huang gambled in Solaire last November and noted that there was room for growth. He intends to build a 500-sq.m. showroom in the city to lure Chinese real estate investors and market apartments at two project sites, adding that he has run into Chinese tourists who have formed “property-shopping” groups, the report said.

Among the biggest beneficiaries of this appetite have been condo units near Manila’s Makati City district. Patches of San Antonio Village now have restaurants, stores, money changers and payment centers catering to Chinese customers sharing space with local stores, the report said.

In the Bay Area, home prices surged by a record 27% in the last quarter of 2017, according to data from Santos Knight Frank, Inc., dwarfing the 6% overall gain in residential prices in Metro Manila. Condo sales in the capital region rose to an all-time high of 52,600 units in 2017.

Appetite from gaming operators is shoring up the commercial market as demand from traditional BPOs wanes. The BPOs’ take-up share for new office space decreased by 1/3, to 46%, in 2017, while that of offshore gaming operators tripled to 30%, said David Leechiu, CEO at Leechiu Property Consultants, which has partnered with CBRE Group, Inc. in the Philippines.”

Other quarters though have been suspicious of their sustained influx and large presence. Social media is rife with such reports. For example:

“One says that as many as 300,000 Chinese nationals work in the Philippines (hopefully legal). Another says that they have easy access to Clark. Yet another says that there are killings and a news blackout at a Chinese-owned banana plantation in Mindanao.”

“One source says 500-600 Chinese nationals are in his own neighborhood, housed in bunk-beds up to 8 to a room, ferried daily around by vans to work in a casino, wearing typically K-pop style. Others see them in tourist clothes but note that they are far too fit and without their families to be tourists.”

“Some work in call centers, online gambling outfits or engaged in credit card and ATM fraud. Another says they occupy entire floors in office buildings or malls. One says that Chinese fishing boats illegally fish giant clams and smuggle Chinese nationals via Palawan, Boracay, and Laoag along with cheap goods.”

“Many reportedly have red dragon tattoos on their right hands between their index finger and thumb, and that Chinese are guarding the entrance of the Double Dragon casino/mall. Female Chinese teens that are reportedly employed in Kings Court and escorted by the Philippine National Police (PNP).”

In the US, Sen. Marco Rubio (R-FL) said in the Tucker Carlson Show on Fox News last May 3 that he now understands China’s broader plan that’s in play. It’s a plan that undermines the competitiveness of every country in the world to become the dominant economic, industrial and technological power. He said it’s the most important geopolitical issue that will define the 21st century’s outcome.

On my end, I view China’s economic “invasion” of the Philippines with guarded optimism PROVIDED it’s properly evaluated, channeled, filtered, monitored and controlled (when matters get out of bounds). I see it as a “boon.”

In other words, investments and spending by any country and its nationals are most welcome from the standpoint of our national interest.

But if we fail to put up the proper safeguards to keep us safe and secure, more so in our strategic resources and infrastructure — e.g., water, power, information, transportation, mining, etc. — then those could be a bane to our long-term wellbeing. It’s up to us to ensure that they can’t be used as an imperial tool to strangle and subjugate us.

Lord knows we’ve had enough bitter lessons from colonial powers to last us several lifetimes. Do you feel me?

 

Rafael M. Alunan III served in the cabinet of President Corazon C. Aquino as Secretary of Tourism, and in the cabinet of President Fidel V. Ramos as Secretary of Interior and Local Government.

rmalunan@gmail.com

map@map.org.ph

http://map.org.ph