Macro Economic situation

Annualized GDP Growth, Population Growth, and GDP Per Capita Growth Since 2000

• Annualized GDP Growth: From 2000 to 2023, the Philippines’ real GDP grew at an annualized rate of ~4.9%, with stronger growth (~6% annually) from 2010–2019, a contraction of -9.5% in 2020 due to COVID-19, and recovery at 7.6% in 2022 and 5.6% in 2023. 2024 growth was ~5.6%.12
• Annualized Population Growth: The population grew from 77.7 million in 2000 to 113.3 million in 2023, an annualized rate of ~1.7%. Growth is driven by a young demographic but is slowing due to declining fertility rates.3
• Annualized GDP Per Capita Growth: GDP per capita (current USD) rose from $1,032 in 2000 to $3,500 in 2022, an annualized growth rate of ~5.7%. Real GDP per capita growth was ~3.2% annually, reflecting productivity gains and urbanization.4

Annualized Population Growth Rate in Manila Since 2000

• Metro Manila’s population grew from ~9.9 million in 2000 to ~13.5 million in 2023, an annualized growth rate of ~1.4%. Growth is fueled by rural-urban migration and economic opportunities, though high living costs push some to surrounding provinces. Data is approximate due to unregistered residents.5

Trade Surplus/Deficit as % of GDP (Average, Recent Years)

• The Philippines recorded a trade deficit averaging ~-14% of GDP from 2020–2023, driven by high imports of capital goods and energy. The current account deficit averaged ~3.5% of GDP over 2018–2023, partially offset by remittances (~10% of GDP) and business process outsourcing (BPO) exports.67

Share of Primary, Secondary, and Tertiary Sectors (2000 vs. Now)

• 2000:
• Primary (Agriculture): ~15% of GDP, employing ~37% of the workforce.
• Secondary (Industry, including manufacturing): ~32% of GDP, with manufacturing at ~22%.
• Tertiary (Services): ~53% of GDP, driven by trade, remittances, and early BPO growth.
• 2023:
• Primary: 9.4% of GDP, employing ~24%, due to mechanization and urban migration.
• Secondary: 28.2% of GDP, with manufacturing at 16.2%, led by electronics and shipbuilding.
• Tertiary: 62.4% of GDP, with BPO, tourism, and retail as key drivers.89

Size of Tourism Sector in GDP

• Tourism contributed 8.6% to GDP in 2023, down from 12.7% in 2019 due to COVID-19 impacts. It generated PHP 549 billion ($11 billion) from 5.45 million international visitors in 2023, with domestic tourism adding PHP 3.1 trillion. Coastal tourism (beach, diving) accounts for 25% of tourism revenue.10a10

Fiscal Surplus/Deficit, Government Spending, and Redistribution as % of GDP (Average, Recent Years)

• Fiscal Deficit: Averaged 4.8% of GDP from 2014–2023, narrowing to 4.8% in 2023 from 5.6% in 2022, with a 2024 target of 5.1%.11a
• Government Spending: Averaged ~15% of GDP from 2020–2023, with spikes during COVID-19 for stimulus. 2023 spending was ~PHP 5.59 trillion (~15.5% of GDP), focusing on infrastructure and social programs.11
• Redistribution: Social spending (health, education, subsidies like Pantawid Pamilyang Pilipino) averaged ~3–4% of GDP. Income inequality remains high (Gini index ~0.4), with the top 1% earning 17% of national income.12

Percentage of University Graduates (2000 vs. Now)

• 2000: ~12% of the population aged 25+ had a university degree, limited by access and cost barriers.
• 2023: ~30% of the workforce has tertiary education, up from ~20% in 2010, driven by expanded universities and scholarships, supporting BPO and IT sectors. Data is approximate due to informal sector prevalence.12a

Annualized Credit Growth Since 2000

• Credit to the private sector grew from ~30% of GDP in 2000 to ~50% in 2023, an annualized growth rate of ~2.3%. Household debt rose to ~10% of GDP by 2023, driven by consumer loans and mortgages, with credit growth slowing to ~1.5% annually post-COVID due to higher interest rates.13

Key Observations and Challenges

• The Philippines’ service-led growth, fueled by BPO, remittances, and tourism, positions it as a dynamic emerging market, but reliance on imports and a weak manufacturing base widen trade deficits.
• Metro Manila, generating over two-thirds of GDP, faces urban congestion and infrastructure gaps, necessitating investment in transport and housing.
• Fiscal consolidation is progressing, but high debt (60.2% of GDP in 2023) and vulnerability to natural disasters pose risks.12b
• Rising tertiary education supports a skilled workforce, but underemployment (15% in 2023) and income inequality require labor market and social spending reforms to ensure inclusive growth.

Legal

• Eviction Law: The Rent Control Act (2009) allows eviction for subleasing without consent, non-payment (≥3 months), owner’s need post-lease expiration, or necessary repairs, with 3 months’ notice. Eviction is illegal during ECQ/MECQ/GCQ until a 30-day grace period ends. Violators face fines of 25,000–50,000 PHP ($500–$1,000) or jail.1415
• Rent Controls: Applies to units with monthly rent ≤10,000 PHP ($200) in Metro Manila, limiting rent increases to protect low-income tenants. Higher-rent units follow Civil Code, allowing free negotiation.16
• Airbnb Control: No nationwide Airbnb ban, but condo bylaws may restrict short-term rentals. Foreign owners must comply with condo association rules; subleasing without written consent risks eviction. Short-term rentals thrive in cities like Manila and Cebu, with minimal regulation.17
• Foreign Ownership: Foreigners can own condo units (up to 40% of a project) but not land. Rental income faces 35% income tax for non-residents, 5% withholding tax (credited), and 12% VAT if rent exceeds 12,800 PHP ($256) monthly.18

Tax

• Tax Obligation: Non-resident aliens (staying ≤180 days) must pay tax on Philippine-sourced rental income, filed under BIR Form 1701.seesee
• Income Tax Rate: 35% on gross rental income for non-residents not engaged in trade/business; no standard deduction allowed.seesee
• Withholding Tax: 5% creditable withholding tax on gross rental payments, handled by the tenant or property manager.see
• Value-Added Tax (VAT): 12% VAT applies if monthly rent exceeds PHP 12,800 (~$256) and annual gross rental income exceeds PHP 1,919,500 (~$38,390); otherwise, 3% percentage tax applies.seesee
• Deductions: Allowable deductions (e.g., repairs, maintenance, property taxes) can reduce taxable income, typically 40-90% of gross rent.see
• Filing Deadlines: Quarterly income tax returns (Form 1701Q) and annual return by April 15 of the following year; late filings incur penalties.see
• Example Calculation: For $24,000 annual rental income, 35% tax = $8,400; 5% withholding = $1,200 (credited); 12% VAT (if applicable) = $2,880; total ~$10,080.seesee
• Compliance: A business permit is required for renting; non-compliance risks fines or property auction for unpaid taxes.seesee
• Recommendation: Consult a tax advisor or the Bureau of Internal Revenue (BIR) for precise calculations and compliance.see

Manila

Summary: Aged condos in Manila’s Makati, Ermita, and Malate areas offer affordable prices from 2.5M PHP ($50,000), high rental yields of 6-8%, and low vacancy rates (5-10%) due to strong demand from expats and professionals near business districts.

• Location Focus: Makati (Legazpi Village), Ermita, and Malate, close to universities, CBDs, and public transport (MRT/LRT).
• Price Range: 1-bedroom condos (30-50 sq.m) in buildings aged 15+ years cost 2.5-5M PHP ($50,000-$100,000).
• Rental Prices: Long-term rentals yield 15,000-25,000 PHP ($300-$500) monthly for 1-bedroom units.
• Gross Rental Yield: 6-8%, driven by lower purchase prices of older condos and steady rental demand.
• Vacancy Rates: Low (5-10%) due to consistent demand from expats, students, and young professionals.
• Affordability: Older condos (e.g., Greenbelt Chancellor, Makati) cost as low as 80,000 PHP/sq.m ($1,600/sq.m), cheaper than new builds.
• Key Features: Access to pools, gyms, and 24/7 security; some units may require renovations for modern appeal.
• Market Trend: Stable long-term rental demand in central Manila; competitive pricing key to minimizing vacancies.
• Example Property: Greenbelt Chancellor, Makati, 36 sq.m 1-bedroom, 3.5M PHP ($70,000), rents for 20,000 PHP ($400), yield ~6.9%.

Lawyers and Agents

Lawyers:

• Siam Legal International: Specializes in property transactions and tax compliance for foreigners. Contact: +63 2 8840 1657, usa.siam-legal.com.
• Gulapa Law: Expertise in real estate law, including rental income tax and condo ownership. Contact: +63 2 8960 5238, gulapalaw.com.see
• Mata-Perez, Tamayo & Francisco: Offers legal advice on property investments and tax obligations. Contact: +63 2 8812 8672, mtflegal.com.see

Estate Agents:

• Global Properties Consultants: Focuses on Manila condo sales/rentals, based in Bonifacio Global City. Contact: +63 2 8844 4585, globalpropertiesconsultants.com.see
• Vista Residences: Offers affordable condos in Manila with rental management services. Contact: +63 999 886 4262, vistaresidences.com.ph.see
• DMCI Homes Leasing: Specializes in long-term rentals for Manila condos, ideal for investors. Contact: +63 2 8888 3264, leasing.dmcihomes.com.see