OVERVIEW OF THE

REAL ESTATE
IN THE PHILIPPINES :
(a continuation)

Prepared and Presented by: Purchia Jeda A. Pague

ARS 1 – 05815 (4:30-5:30 P.M.) Ar. Alvin V. Morales

DISTRIBUTION OF INCOME

• Is more or less determined by the economy’s

productivity.

• The less productive an economy, the

greater inequality of incomes.

(Tan, 2001)
DISTRIBUTION OF INCOME

• By measuring the current productivity levels

of the country, the Pareto Study clearly
illustrates one of the reasons why the
country has a high social inequality.

(Tan, 2001)
PARETO ANALYSIS STUDY

• Also known as the “Pareto Principle” or the “80/20 Rule”.

• mathematical model developed by Italian economist

Vilfredo Pareto

• This causal relationship is rooted in the fact that 80% of

the effects come from 20% of the causes.
(Detmers, 2014)
 Table 1.7: Annual Per Capita/Avg. Income
Income Group 1994 1997 Increase
Bottom 10% 15,662 20,261 32.00%
2nd 10% 25,262 33,011 30.67%
3rd 10% 32,719 42,536 30.00%
4th 10% 40,631 53,071 30.62%
5th 10% 49,800 66,200 32.93%
6th 10% 61,161 83,125 35.91%
7th 10% 75,898 106,958 40.92%
8th 10% 98,234 141,484 44.03%
9th 10% 136,715 200,087 46.35%
Top 10% 295,542 491,658 66.36%
Source: PSA, NSCB

HIGH SOCIAL INEQUITY

The richest 10% of 1997 is 24 times richer compared to
the poorest 10% Table 1.7 page 12, Real Estate in the Philippines, 2001 (Tan, 2001)
 Table 1.7: Annual Per Capita/Avg. Income
Income Group 2012 2015 Increase
Bottom 10% 146,984 195,504 33.01%
2nd 10% 197,980 259,566 31.11%
3rd 10% 231,134 302,287 30.78%
4th 10% 277,621 355,524 28.06%
5th 10% 328,517 414,255 26.01%
6th 10% 390,886 495,068 26.65%
7th 10% 490,002 587,817 19.96%
8th 10% 613,665 727,235 18.51%
9th 10% 817,204 943,727 15.48%
Top 10% 1,532,805 1,787,178 16.36%
Source: PSA, NSCB

HIGH SOCIAL INEQUITY

The richest 10% of 2015 is 9 times richer compared to the
poorest 10% Table 1.7 page 12, Real Estate in the Philippines, 2001 (Tan, 2001)
 Source: Rappler

A Nation of Billionaires, Dynasties and Yaya (2015)

“ The vast majority of households – over 18 million accounting for over
90% of the total [population] – belong to the poor and low-income group
earning less than PhP5000 per month.” (Mendoza & Peralta, 2015)
 POVERTY AROUND THE WORLD

• World Bank showed that over

half of the rural (countryside)
is poor, accounting for nearly
two-thirds of the country’s
total poverty incidence.
(Tan, 2001)
People living in third-world countries.
Source: Statistics Brain
 POVERTY AROUND THE WORLD

• Based on NEDA’s (National

Economic and Development
Authority) Medium Term
Development Plan, the roots of
poverty are multidimensional but a
large part of it can be traced back
to the low productivity of the
agricultural sector. (Tan, 2001) Agriculture: The decline of the poor man's sector.
Source: GMA Network Philippines
 POVERTY AROUND THE WORLD

• In 1998, the agricultural

sector accounted for 39.2
% of total employment but
contributed to only 19.4 of
gross domestic
production. (Tan, 2001)
Duterte vows to work for stronger agricultural sector.
Source: Northbound Philippines News Online
 PRODUCTIVITY AND PRIVILEGE

• Can be attributed to many things.

• The richer have more access to

capital, land and many
productivity-enhancing tools
• (e.g. machineries, transportation and etc.).
(Tan, 2001)
Workers fill raw fishes into tin sardines cans.
Source: Getty Images
 THE EDGE ON PRODUCTIVITY

• Knowledge, education,
training, better health,
connections and higher
motivations and aspirations
give the richer folks the
advantage over the poor in
terms of productivity. (Tan, 2001) The undistinguishable difference.
Source: Pinterest
 THE EDGE ON PRODUCTIVITY

• With the many

advantages that the rich
have at their disposal,
they could produce
higher value-added
goods and services. (Tan, 2001)
Bottles of laundry detergent on a store shelf..
Source: Lumen Learning
 BOTTOMLINE

• The result is: the

rich get richer
and poorer gets
“left-behind”.
(Tan, 2001)
Visible division between rich and poor in Sao Paulo, Brazil.
Source: Tuca Vieira
 HOUSING THE POOR

• A study conducted by
the Center for Research
and Communication (now
the University of Asia and the
Pacific),
for every peso
spent in housing, the
multiplier effect on the
economy is 16.6 times.
(Tan, 2001) Visible division between rich and poor in Sao Paulo, Brazil.
Source: Tuca Vieira
THE MULTIPLIER EFFECT

• The multiplier effect is the expansion of a

country's money supply that results from
banks being able to lend.

• it is the money used to create more money and

is calculated by dividing total bank deposits by
the reserve requirement.
(Investopedia, n.d.)
 HOUSING THE POOR

• With the poor not gaining

any benefits from the
wealth generated,
financing the construction
their housing needs on the
government and private
sectors’ account is difficult.
(Tan, 2001) General housing conditions of the poor in the PH.
Source: Pinterest
 ON THE OTHER HAND…

• Catering to the housing and recreational needs of the

rich will not help stimulate the economy much.

• Housing components in areas to be developed are

mostly imported and sometimes maybe destructive
to the environment and food security
• (e.g. the development of golf courses). (Tan, 2001)
 MOREOVER

• An aspect that hinders

the country to be more
competitive in the
marketplace is the
poor infrastructure of
the country. (Tan, 2001) The state of infrastructure in the Philippines is the
second worst among countries in the Association of
Southeast Asian Nations.
Source: Philippine Headline News Online
 GLOBALIZATION AND INFRASTRUCTURE

• Inadequate infrastructure
is a major obstacle for
local farmers and
entrepreneurs to
compete with imports.
The state of infrastructure in the Philippines is the
(Tan, 2001) second worst among countries in the Association of
Southeast Asian Nations.
Source: Philippine Headline News Online
 GLOBALIZATION AND INFRASTRUCTURE

• Poor or lack of roads, irrigation

systems, and drying facilities
make it more costly to access
production inputs and markets
for final goods and services
(Tan, 2001) Poor Philippine mining families risk lives
to survive.
Source: UCA News
 GLOBALIZATION AND INFRASTRUCTURE

• Foreign investors will also be

reluctant to invest heavily, if it
will be cheaper to operate
elsewhere. (Tan, 2001)
BLOODBATH ON STOCK MARKET:
Red dominated the electronic board on the
trading floor of the Philippine Stock Exchange.
Source: PH Inquirer
 GLOBALIZATION AND INFRASTRUCTURE

• Traffic costs the PH

economy PHP 40 B
a year in direct
losses and PHP 100
B in indirect
losses.* Traffic flow slows down to a crawl on Edsa during
Friday's Metro Manila Shake Drill.
(Tan, 2001) Source: PH Inquirer
 GLOBALIZATION AND INFRASTRUCTURE

• About PHP 40 B is lost

due to wasted
gasoline, lost man
hours, employment of
thousand of aides and
wasted electricity.*
(Tan, 2001)
*Based on DTOC’s (Dept. of Transport
and Communications) study Traffic flow slows down to a crawl on Edsa during
and a report by the JICA (Japan Friday's Metro Manila Shake Drill.
International Corporation Agency) Source: PH Inquirer
 GLOBALIZATION AND INFRASTRUCTURE

• The loss of another PHP 100

B is attributed mainly to
missed business
opportunities, lack of
capital inflow due to
investors shying away from
the country resulting in a lag
in business. A Missed Opportunity
(Tan, 2001)
Source: A. Bacall
 GLOBALIZATION AND INFRASTRUCTURE

• Three main causes of

traffic: bad driving
habits, inadequate
traffic enforcement and
poorly-coordinated
infrastructure projects. An intersection chaos.
Source: Carmudi PH
(Tan, 2001)
 GLOBALIZATION AND INFRASTRUCTURE

• JICA proposed PHP 822 B to spend for building of

roads for the next 15 years.

• Since the DOTC doesn’t have that amount of money,

the dept. is planning to launch a program called “3E”:
Education, Enforcement and Engineering.
(Tan, 2001)
 TOURISM AND TRANSPORTATION

• Gilbert Garchitorena, an economist at the University of

Asia and the Pacific School of Economics, cited on his
paper entitled, “Tourism and Infrastructure: The Road
Less Travelled” that the growth of the country’s
tourism sector has still not improved due to
inadequate infrastructure facilities.
(Tan, 2001)
 TOURISM AND TRANSPORTATION

• Garchitorena also cited

that most transportation
facilities are insufficient
and outdated, and still
operate under inefficient
systems and procedures.
(Tan, 2001) MRT 3 computer system still uses outdated CPU,
floppy disk, and 256MB RAM
Source: Manila Shaker Philippines
 TOURISM AND TRANSPORTATION

• The airline industry also

needs a lot of capital.

• Restrictive domestic and

international aviation
policies also limit access
to route and compromise
capacity. Mission Aviation Fellowship and New Tribes Mission provide
desperately needed aid to remote Philippine islands
(Tan, 2001) Source: MAF Story Hub
TOURISM AND TRANSPORTATION

“Developing countries, while still benefiting

from lower labor costs, must rely less on
abundant natural resources and more on
access to international transportation and
telecommunications, the quality of local
infrastructure, and a supportive policy
climate to compete in the global
marketplace...” * - Rodney E. Slater
(US Dept. of Transportation Secretary 1997-2001)
*An excerpt from the Philippine Star newspaper (Tan, 2001)
TOURISM AND TRANSPORTATION

“In 25 years, international commerce will

represent a larger portion of total world
economic output than today’s level of 18
percent…”

- Rodney E. Slater
(US Dept. of Transportation Secretary 1997-2001)
*An excerpt from the Philippine Star newspaper (Tan, 2001)
TOURISM AND TRANSPORTATION

“Without careful planning, international

transportation systems and domestic
collection and distribution and intermodal
facilities will be severely strained…”

- Rodney E. Slater
(US Dept. of Transportation Secretary 1997-2001)
*An excerpt from the Philippine Star newspaper (Tan, 2001)
 TOURISM AND TRANSPORTATION

“Not only those system that serve global trade,

but also the urban infrastructure that supports
industrialization and living standards, must be
reconstructed…”

- Rodney E. Slater
(US Dept. of Transportation Secretary 1997-2001)
*An excerpt from the Philippine Star newspaper (Tan, 2001)
 TOURISM AND TRANSPORTATION

“Problems of pollution and unplanned

growth will come to be seen as affecting
both a country’s attractiveness as a target
of investment and its acceptability as a
trading partner…”

- Rodney E. Slater
(US Dept. of Transportation Secretary 1997-2001)
*An excerpt from the Philippine Star newspaper (Tan, 2001)
TOURISM AND TRANSPORTATION

“In order to remain competitive, nations

must improve the performance to today’s
transportation systems by investing in the
new technologies and modernizing
regulatory and financing institutions.”

- Rodney E. Slater
(US Dept. of Transportation Secretary 1997-2001)
*An excerpt from the Philippine Star newspaper (Tan, 2001)
 TOURISM AND TRANSPORTATION

• The Philippines has a long way

to go to be competitive in the
infrastructure since the PH
ranked 53rd of 59 countries in
the category of overall
infrastructure among the best in
the world.
(Tan, 2001)
The World Economic Forum (WEF) publishes an annual
report that assesses about 138 countries.
Source: Linked In
 TOURISM AND TRANSPORTATION

• Singapore, Malaysia,
Thailand, Indonesia
and Vietnam ranked
far higher than the
Philippines.
(Tan, 2001)
The World Economic Forum (WEF) publishes an annual
report that assesses about 138 countries.
Source: Linked In
 REFERENCES

Detmers, J. (2014, March 10). The Pareto Principle And How To Apply It to Life As A
Student. Retrieved from Jordan Detmers Blog :
https://jordandetmers.com/2014/03/10/the-pareto-principle-and-how-it-can-apply-to-
life-as-a-student/

Investopedia. (n.d.). Multiplier Effect. Retrieved from Investopedia:

https://www.investopedia.com/terms/m/multipliereffect.asp

Mendoza, R. U., & Peralta, K. (2015, May 6). A Nation of Billionaires, Dynasties and
Yayas. Retrieved from Rappler: https://www.rappler.com/thought-leaders/92208-
billionnaires-dynasties-yayas

Tan, E. L. (2001). Real Estate In the Philippines: Revised Edition. Mandaluyong City:
Miracle Publishing Corporation.
END OF PRESENTATION