Filinvest's Home Bookings Rise on Overseas Filipinos' Demand

By Ian C. Sayson

Sept. 20 (Bloomberg) -- Filinvest Land Inc., the fourth- largest Philippine developer by value, said bookings for new homes rose 34 percent in the first seven months, driven by overseas-based Filipinos who bought more of its five-story apartments.

Buyers booked 3.9 billion pesos ($84 million) worth of homes between January and July, compared with 2.9 billion pesos in the same period of 2007, Chief Financial Officer Nelson Bona said in an interview. Buyers typically book apartments as they're being built by paying a deposit.

``Overseas Filipino workers are sending home the money and they are the ones driving demand,'' Bona said yesterday. ``As long as remittances don't drop, we will grow.''

Rising orders from overseas Filipinos may help Filinvest shares rebound from a 53 percent slump this year, compared with the 41 percent decline in the Philippine Stock Exchange Property Index. Shares have dropped on concern home sales will weaken on record oil prices and slowing global economic growth.

Funds sent by the more than 8 million overseas Filipinos, which account for 10 percent of the economy, reached $9.6 billion in the first seven months of the year, 18 percent more than in the same period of 2007. The central bank forecast remittances will rise 11 percent to a record $16.6 billion pesos this year.

Rising Construction Costs

``The strong take-up shows demand from overseas Filipinos hasn't let up yet,'' said Jonathan Ravelas, a strategist at Banco de Oro Unibank Inc. in Manila. ``The risk is a surge in prices of raw materials will push up construction costs and squeeze margins.''

Philippine steel bar and pipe prices are expected to rise in the fourth quarter when construction resumes after the rainy season, BusinessWorld and Philippine Daily Inquirer reported this month.

Filinvest relies on overseas Filipinos for half of its home sales. Units priced between 300,000 pesos and 4 million pesos, or what local property analysts refer to as affordable and middle-income homes, make up 70 percent of its residential sales.

``Unlike high-end homes where the cycle could be peaking, low- to middle-income homes have the highest unmet demand,'' said Jody Santiago, a strategist at UBS AG's Manila unit. Filinvest shares, which closed at 64 centavos yesterday, may climb to 1.10 pesos in 12 months, according to Santiago, who rates the stock a ``buy.''

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net