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Friday, December 30, 2016

Most Filipinos Are Not Getting Richer

Most Filipinos are not getting richer - at least in dollar terms - according to the 2016 Credit Suisse Global Wealth Databook. Median Wealth per Adult peaked at $2,293 in 2012 and has gone down since to $2,055 in 2016, $2 smaller than what it was in 2011.

Mean Wealth per Adult Filipino peaked two years later at $10,042 in 2015 and has declined 1.63% to $9,878 as of 2016.

As a result, Median Wealth, as a percentage of Mean Wealth, has declined steadily from its peak of 27.42% in 2008 to 20.80% in 2016 - hovering slightly above 2002 levels.  This indicates rising income inequality.  In other words, the rich are getting richer but most Filipinos aren't.

Source: 2016 Credit Suisse Global Wealth Databook

Friday, December 23, 2016

Philippine House Prices Decline Just as Supply Peaks

Philippine House Prices have entered into a price "recession", declining for two straight quarters - roughly 3.4% from its peak of 220.99 as of the first quarter of 2016.  

Data from the St. Louis Fed confirms this:

As can be seen from the chart above, the upward trend of property prices that began in 2011 seems to have been broken for now.

This has happened just as investment in construction as a percentage of GDP has reached a 25 year high.

Friday, December 16, 2016

Construction Gross Value as a Percentage of GDP Is at a 25 Year High! - Updated as of 3rd Qtr. 2016

Last May 4, 2015, we noted that Construction Gross Value (Construction GV) at 11.21% as of the year-end 2014 was already well above its historical average of 9.65% of GDP since 1990.  This ratio has run at an above average rate since 2009 and has already eaten away at the "cumulative underhang" or underinvestment in construction that has taken place since 2004, when the excessive investment in construction that took place in the mid to late 1990's was being absorbed.

.As of the 3rd Qtr of 2016, Construction GV as a percentage of GDP now stands higher at 12.54% of GDP - an all-time high for the past 25 years.  But the real story is that Cumulative Construction GV has gone well above equilibrium and now stands at 2.9% above equilibrium, a rise of 2.9% in just nine months.  Given all the planned new projects that are already at the execution stage, the momentum in Construction Investment will continue.