The world is in crisis - the subprime problem in the United States that erupted during the second half of 2007 has led to the collapse of giant financial institutions and contributed to the U.S.'s economic slowdown.
As the world's biggest economy, the slowdown in the U.S. triggered a chain reaction in other countries. The oil and commodity price spikes completed the spread of slow growth and bleak prospects throughout the world.
As a member of the global economic community, the Philippines also sees its economy slowing down - from a 30-year high of 7.2 percent in 2007 to a projected 4.7 percent this year, as measured in terms of Gross Domestic Product (GDP) or the total amount of goods and services produced in a given period.
That's not bad: a growth rate of 4.7 percent is still respectable under a crisis situation.
In general, the situation is bad. The good thing is that some sectors of the Philippine economy have shown resilience, and have continued to grow despite the adverse circumstances. Banks are seeing substantial declines in their profits, but none is expected to end the year with a loss. There are no bank runs, no closures. On the contrary, local banks are reporting strong growths in their lending operations.
That's not bad: bank lending means money circulating in the economy and financing business activities.
Trade, both wholesale and retail, also remains brisk. Just look at the vehicle traffic on the roads leading to malls and the pedestrian traffic inside their halls.
That's not bad: the scary thing is when the malls and other shopping centers are deserted.
Among industry sectors, the real shiner is the real estate industry, whose growth is being driven by the phenomenal business process outsourcing (BPO) sector, tourism and overseas Filipinos. Demand for office space for BPO companies has not abated. More tourists are coming to the Philippines, particularly from China, Korea and other neighboring countries because the economic slowdown has encouraged them to look for cheaper ways to take vacations, like going to places closer to home. Competition remains strong among developers courting overseas Filipino workers and migrants and their families.
There is also a cultural factor behind the strong demand for residential properties among Filipinos even during a crisis. Home ownership, for Filipinos, is the best hedge during critical times. A home serves as a refuge - it is where families run to during bad times.
High prices and high interest rates compel families to review their spending priorities and de-list or reduce spending on non-essentials. Top of the list of essentials are food, clothing and shelter. Of course, it is always good advice in real estate as in other investment areas is to put your money on a trusted brand with an excellent track record.
