This material originally appeared as Cardenas, K. (2014) “Urban Property Development and the Creative Destruction of Filipino Capitalism”. In W. Bello and J. Chavez (eds.) State of Fragmentation: The Philippines in Transition. Bangkok: Focus on the Global South. This entry is the third of a four-part serialization.
Part II: The new rules of the game
Part IV: The city and the restoration of class power
All these transformations—the Philippine brand of neoliberalization, the unique vectors through which its economy globalized, and its uneven sectoral and geographical development—converge in urban real estate. Mirroring the trajectory of the economy as a whole, real estate development began the decade in crisis: the sector shrank from 2000 to 2002, hitting a 24.7 percent year-on-year contraction in the first quarter of 2001. But beginning with 2003, residential lot sales, coupled with office and retail space rental and leasing, have sustained record levels of growth: from the second quarter of 2004 until the fourth quarter of 2008, it sustained a double-digit streak, broken only twice by dips into high single-digit growth rates (see Figure 3). In the third quarter of 2006, the sector grew at a record pace of 26.2 percent year-on-year, breaking a record that was previously set in the third quarter of 1982. This record was broken yet again when the sector grew by 27.7 percent in the second quarter of 2010. At the end of its bust period in 2002, the gross value added of real estate development stood at approximately PhP8.8 billion. In 2010, it had grown to PhP22.1 billion. If considered as a separate subsector, real estate was the second-fastest growing sector of the economy over the past decade, outpaced only by mining.
Continue reading “Back to the land”
Originally published as an Asia Research Brief with the York Centre for Asian Reseach, 3 July 2014. The argument outlined here was first developed in Cardenas, K. (2014) “Urban Property Development and the Creative Destruction of Filipino Capitalism”. In W. Bello and J. Chavez (eds.) State of Fragmentation: The Philippines in Transition. Bangkok: Focus on the Global South, and appears in a condensed form in Cardenas, K. (2014). “Cash-crop condominiums.” Philippine Daily Inquirer, 16 March 2014.
Long the exception to a region of dynamic export-oriented economies, recent years have seen the Philippine economy deliver unusually impressive numbers, receive successive votes of confidence from credit rating agencies, and emerge as an unusually bright spot in an otherwise gloomy global economy. In 2013, its GDP grew at a rate of 7.2 percent, second only in the region to China. Over the course of the Great Recession, it grew at a pace that compared favourably with its middle-income and Southeast Asian peers; its average growth over the same period was also at its fastest in its recent history.
The causes behind this growth have been firmly established: a reinvigorated mining sector, robust remittance inflows from overseas Filipinos and a rapidly-growing services offshoring industry. Its effects, however, remain only partially understood. What is so far apparent is that the growth has failed to address the high levels of unemployment, poverty and inequality that have been persistent features of Philippine underdevelopment. If the new wealth has so far failed to translate into the well-being of Filipinos, then where did it go? Continue reading “Retelling the Philippines’ ‘turnaround story’”