THE office emptiness rate is projected to ease in 2025, driven by increased demand following the signing of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, in response to financial services provider Unicapital Group.
Office demand for next yr will likely be driven by outsourcing corporations, with the CREATE MORE law permitting as much as 50% of employees to do business from home without losing tax perks, Unicapital said in an e-mailed statement on Monday.
“It will encourage businesses to determine offices within the country,” Unicapital said.
Unicapital expects the office emptiness rate to rise to twenty.5% this yr as a result of the exit of Philippine offshore gaming operators.
Nonetheless, the figure is predicted to ease in 2025 with less recent supply within the pipeline.
The CREATE MORE Act slashes the company income tax to twenty% from 25% for registered business enterprises (RBEs). It also mandates that the local purchases of export-oriented enterprises are zero-rated, and importations are exempt from value-added tax.
The law also institutionalizes flexible work arrangements for RBEs operating inside economic zones and freeports without affecting their tax incentives.
For 2025, Unicapital expects inventory levels within the residential segment to say no to 11 months of sales from 12 months as a result of recovering demand and slower supply as developers take a more cautious stance.
Sales take-up is predicted to grow by 9% next yr, led by easing mortgage rates in response to lower policy rates in addition to more favorable payment terms.
Unicapital said the Philippine Stock Exchange index (PSEi) could reach 8,000 next yr, up by 14% from the estimated 7,000 level at the top of this yr.
The corporate added that further policy rate easing will support corporate earnings through a lower cost of capital and increased consumer spending.
“That is supported by the anticipated further reduction in policy rates by the Bangko Sentral ng Pilipinas (BSP). Nonetheless, there are downside risks to this, including prolonged elevated rates of interest and the escalation of geopolitical tensions that disrupt trade supply,” Unicapital said.
On Monday, the PSEi rose by 1.03% or 69.87 points to six,850.
For next yr, Unicapital said the country’s inflation rate is predicted to be at 3.1%, below the BSP’s 4% goal ceiling, while the Philippine economy is forecasted to grow by 6.3%.
“We’re confident that there are opportunities for the Philippines despite the risks. Now we have seen similar circumstances prior to now, but with the federal government stepping up to make sure measures are in place to spice up the equity market, every little thing will fall into place and yield positive results,” Unicapital Group Chief Executive Officer and President Jaime J. Martirez said.
“The federal government’s signing of the CREATE MORE law is timely in further institutionalizing actions that may enhance corporate profitability,” he added.
Unicapital added that the peso may weaken against the dollar because the upcoming Donald Trump administration may lead investors to favor assets in america.
“The investment house believes policy rate cuts should proceed, however the pace stays uncertain amid possible inflationary pressures from US protectionist policies under the incoming US government administration,” it said.
“A downward pressure on oil prices can also be expected, driven by several aspects including potential trade frictions resulting in increased US production and weakened demand,” it added. — Revin Mikhael D. Ochave
