The Philippine property market could be poised for a slowdown despite the country managing one of the fastest economic growth rates in the world. Analysts are blaming Donald Trump.
That's because the newly inaugurated U.S. president has been banging the gavel of protectionist rhetoric. In December, Trump threatened in a tweet to impose a 35 percent tax on products sold in the U.S. by any domestic business that moved operations overseas. Trump has also targeted specific businesses, particularly automakers, which were considering expanding outside the U.S. It's unclear whether he'll target services as well.
Credit Suisse pointed to recent "channel checks" on the office sector in the Philippines amid uncertainty over U.S. business process outsourcing (BPO) companies' plans to expand in the archipelago amid concerns over the protectionist rhetoric.
"Risk of slower occupancy ramp-up, or worse – cancellation of pre-commitments – for upcoming office space in the country seems to have been escalating in recent weeks," Credit Suisse said in a note on Tuesday.
"Aside from our recent channel checks with property agents, there has been a constant flow of negative news citing uncertainties about U.S. President Trump's protectionist rhetoric about outsourcing, which could slow down and/or delay expansion plans particularly for U.S. BPOs in the Philippines."
Remittances and the BPO sector are key pillars of the Philippine economy, contributing around 10 and 6 percent, respectively, to annual gross domestic product (GDP).
Trump's anti-immigration rhetoric could also impact remittances from overseas Filipino workers in the U.S.