Where is it?

The Republic of the Philippines is made up of 7,107 islands and located in the western Pacific Ocean east of Vietnam.

What's so special about it?

Named after the 16th Century King Philip II of Spain, the Philippines was discovered by the famous explorer Ferdinand Magellan and was under Spanish rule for a number of centuries. Eventually in 1946 it achieved independence. The East Asian financial crisis of the late 1990s had a severe effect on the area, however current President, Gloria Macapagal-Arroyo, has pledged to turn the country into a First World state by 2020.

GDP growth was estimated at 5.6% in 2006, but most importantly the aim for 2007 is for the budget to balance in 2007. In 2006 there was a deficit of just under 1 billion, the lowest ever, and in 2007 it is expected to balance and in 2008 a surplus is predicted. A large source of income is the money sent home by Filipino workers, working overseas.

In 2006 over 8.4 billion was sent home by workers, an increase of 18%.

Best kept secrets:

In the 2007 elections a win for President Arroyo's party will be good for foreign property as her government has plans to remove current limits on foreign ownership.

While Arroyo is pushing through reforms, "people power" is very strong in the Philippines as two presidents have already been forced from office, including the most recent one, Joseph Estrada and Ferdinand Marcos, who along with his infamous show loving wife, ruled by force for over 20 years.

What's the property market like?

A major source of the country's new wealth is the information and communications technology sector, mainly call centres. Last year earnings from this sector grew by 50% to 2.7bn employing up to 250,000 and increasing all the time.

This has led to demand for office space and residential properties for workers in the luxury market sector.

An additional source of buyers is from overseas Filipino workers sending money home to finance property purchases, which accounts for up to 30% of property purchases.

"As years pass, the average income level increases as these workers go higher in the value chain, hence, they earn more the longer they stay abroad, " Joey Antonio, of Century Properties Group, reported in the local Inquirer newspaper. Also as the dollar weakens and the US market remains depressed the home market will remain attractive for overseas foreign workers.

The 1997 Asian slump hit the Philippines hard. For example between 1995 and 1997 prices of luxury condos rose by 63% and between 1997 and 1998 dropped by 18%. In 2004 a recovery began but between 1997 and 2004 prices dropped by 56%. In 2005 prices rose by 11% and in 2006 by a reasonable 9.6%.

How do you go about buying property?

The country's newspaper of choice is the Philippine Daily Inquirer, which has a 50% market share. It is very important to go through a reputable English speaking agent as in the Philippines only 40% of property deals are registered and property titling is often not carried out.

While the government may change regulations in the near future, at present there are restrictions on what foreigners can buy. Foreigners cannot buy land, and when purchasing condos or apartments in high rise developments the proportion of foreign ownership cannot exceed 40%.

When buying a house, foreigners can buy the house but can only lease the land it is built on, this is usually for 50 years and renewable every 25 years. Other options are marrying a Filipino and buying it in their name or setting up a corporation to buy the land, however again only 40% of the corporation can be owned by a foreigner.

When buying a condo a down payment of a minimum of 10% is required and a Condominium Certificate of Title is then given.

Buyers must also be at least 35 years old and must meet the local bank's investment requirements.

Where are the best places to buy?

The City of Makati, which is part of the Metro Manila area is a highly cosmopolitan area and one of the Philippines most important cities for finance and commerce. Known as the "Financial Capital of the Philippines", it is home to the Philippine Stock Exchange and the central business district is referred to as "the Wall Street of the Philippines". Many rich Filipino families live here and you are likely to see names such as Forbes Park, Bel-Air Village, Manhattan Gardens or Fifth Avenue Place.

What's the rental market like?

With call centre and business employees looking for accommodation condos in Manila can generate high returns. The Global Property Guide estimates that returns of 13%-15% are realistic.

They report that small apartments are popular but the most in demand are small studios that are within range of junior and middle executives. In Manila 30sq m apartments generate a monthly rent of 369 (15% yield), 80sq m properties generate a yield of up to 12% and 850 per month and larger 275sq m apartments can generate up to 2,067 a month, but a lower yield of 9.6%.

What's the resell market like?

Colliers International Research predicts that the secondary market will strengthen, mainly due to reduced supply and vacancy rates. In the Makati for example they believe that in 2006 the stock of condos rose by 5% and vacancy rates were at 10%, however in 2007 they estimate it will be 3% and 8% respectively.

Average property prices?

Recent data compiled in February for the Global Property Guide found that in Manila small condos of about 30sq m cost around 29,283, a medium sized condo of about 80sq m will set you back 88,445 and a large 275sq m condo was priced from 258,199.

What are the tax breaks with Ireland?

VAT is 12%, rental income for foreigners is taxed at a flat rate of 25%, capital gains is 25% and inheritance tax ranges from 5% to 20%.

FAST FACTS

Getting there: Many airlines fly from Europe to Manila, although the cheapest route is via Hong Kong or Singapore. A visiting visa is required.
Area: 300,000 km2
Population: 87,857,473 Currency: Philippine Peso (1.00 PHP = 0.016)
Weather: Tropical climate with average temperatures from 25degreesC to 32degreesC
Transport: The most efficient way to travel is by plane or bus. There are ferries between the islands but beware of overcrowding. The Manila Metro is good but the train system isn't.
Going out: Makati, Cebu and Davao are where most of the nightclubs are located. Filipinos usually eat while drinking and local favourites are lambanog and tuba which are liqueurs derived from coconut sap.
Eating Out: Filipino cuisine is very Latin in nature compared to Asian food in general.
Filipinos eat a lot of rice but there is also a healthy snack culture! A highlight of the year is the Bangus Festival in Dagupan City which occasionally has the "Longest Barbeque".
Shopping: The Philippines is one of the least expensive places to visit and the majority of the large malls are in the upmarket areas in Makati.

USEFUL CONTACTS >>Irish Honorary Consul General in Manila: 0063-2896 4668; irishcon@info. com. ph
>> Filipino Embassy in London: 004420793 71600; embassy@philemb. co. uk
>> Philippine Daily Inquirer: www. inq7. net
>> Official Philippines Government Website: www. gov. ph
>> Philippines Tourism: www. tourism. gov. ph / www. philtourism. com
>> Department of Foreign Affairs travel advisory for Philippines: www. dfa. ie
>> Guide for Filipinos in Ireland: www.filipinosinireland. com