September of last year, I wrote about what I perceived as a condominium boom in Metro Manila. For several weeks, I perused the newspapers and listed down the condominiums that were being advertised. I stopped counting upon reaching almost 200 condominium brands in Metro Manila alone. More than a year later the trend continues.

In its 3rd quarter 2011 report (this is a PDF file), Colliers International, a respected real estate service provider, disclosed that in Metro Manila, 90 high-rise residential buildings were launched in the first three quarters of this year. That translates to 25,000 condominium units.

We know that a flourishing real estate sector is a good indicator of a healthy economy. It leads to increased employment and the growth of ancillary industries like the construction/building materials industry, furniture industry, the appliance industry and more. (no one moves to a new house without bringing in at least a few pieces of new furniture, appliances and accessories : )

So, is the continuing growth in the number of condominiums being built in Metro Manila an indication that our economy is in a good state?

For me the answer is NO

Let us consider the following:

1. The Philippine Gross Domestic Product (or GDP)

Defined, GDP is basically the total output of ALL the services rendered and all the products manufactured in a country in a given year. The latest official GDP figure that was released in August 2010 by the National Statistical Coordination Board (or NSCB) was for the year 2009. Philippine GDP for 2009 was 7.68 trillion pesos.

2. Metro Manila’s Gross Domestic Product

Metro Manila registered a GDP of 2.8 trillion pesos or 36 percent of the country’s total output.

3. Metro Manila’s land area vis-à-vis the country’s total land area

Metro Manila or the National Capital Region (NCR) is one of the 17 administrative regions in the Philippines. It is divided into 6 districts with the City of Manila as the capital plus one municipality, Pateros.

Metro Manila occupies a total land area of 638 square kilometers whereas the entire Philippines has a total land area (including inland waterways) of 300,000 square kilometers. It means that Metro Manila comprises just 0.21 percent of the country’s total land area.

4. the Population

The latest official population survey by the National Statistics Office goes as far back as 2007. It projected, though, that the national population for 2010 would be 94 million. Metro Manila, with a population growth rate of 2.10% annually was projected to be inhabited by around 12.2 million souls in the same year.

Bottom line is 13% of the entire national population are all bunched up within just 0.21 percent of the country’s total land area but they are contributing 36 percent to the country’s economic output. Conversely, it also means that 87% of our countrymen are living in the remaining 99.79% of our country eking out a living to contribute the remaining 64% of our Gross Domestic Product, many, through some of the harshest working conditions.

It is the over-concentration of economic activities and opportunities in Metro Manila that continue to drive demand for condominiums therein. And this leaves some of the other 16 regions in the country with little of said economic activities and opportunities.

For me, this is a serious form of socio-economic inequity.

The booming demand for condominium in Metro Manila, therefore, should not be viewed as a sign of a healthy Philippine economy but rather as a symptom that the country as a whole remains as the Sick Man of Asia.

Thank you so much

Image courtesy of Flickriver.com