Old news: The government’s comprehensive and integrated mass transport and infrastructure program is envisioned “to decongest the National Capital Region and to stimulate economic growth in the countryside especially in Bicol and Mindanao.” Progress has been slow.
Good news! On July 14, 2009 the government announced that:
Phase 1 of the rehabilitated Philippine National Railways was inaugurated. A commuter train, with the President and the VP on board, chugged along the stretch from Tutuban in Manila to Buendia in Makati City.
Salient points of the report:
[Note: There used to be a link to this report from the website of the Philippine Information Agency but the page no longer exists.]
- The trains started commercial run the following day from Tutuban to Buendia, passing through Espana, Sampaloc, Sta. Mesa, Paco, Sta. Ana and San Andres.
- For 15 pesos, a commuter can now expect a traffic-free journey from Tutuban and reach Bicutan in 30 minutes.
- By September this year, the route will extend to Alabang and eventually to the Bicol region.
- The Department of Transportation and Communication is now finalizing a uniform ticketing system for the PNR, Metro Rail Transit (MRT) Line 3 and Light Rail Transit (LRT) 1 and 2.
- The second phase, or the North Rail, has been approved by the board of the National Economic and Development Authority and will be started within 60 days.
These plus the extension of super highways and the Skyway along the South Luzon Expressway and more will impact heavily on Philippine real estate.
What to expect:
- Real estate properties along certain points of the railway system will become attractive
- There will be a domino effect in price increase of real estate
- Migration from and decongestion of Metro Manila
- Business relocation especially of Business Process Outsourcing companies
These facts are intertwined; they may overlap one another.
Real estate properties along certain points of the railway system will become attractive
A 2006 Dutch study [this is a PDF file] noted that:
“… households are willing to pay more for housing near (not beside) railway stations due to lower transportation cost and reduced travel time. As workplaces become more accessible, so do leisure areas…”
Population convergence near or around some (not all) of these stations will lead to increased commerce that will push demand for and, therefore, price of real estate. Expect commercial establishments, conveniences and job opportunities to increase in some of these areas.
There will be a domino effect in price increase of real estate
Another study noted that:
“… the price of real estate is highest in city centers and decreases with every unit of distance from the city center. Thus, when some areas are pulled closer to the city center through an improvement in transportation, land values in these areas increase…”
As transportation improves, Filipinos will start moving to locations outside Metro Manila. As they do, commercialization and urbanization in these areas will start, driving up prices of land therein.
In time, these new urban areas will become the sub-city centers for people farther along the line; they will become the new sources of jobs, leisure, and conveniences for these people. The process will be replicated as you move farther and farther.
Migration from and decongestion of Metro Manila
Latest figure from the National Statistics Office puts the population of Metro Manila or NCR at 11,553,427; that’s 12.5% of the projected 92.23 million for 2009 in the entire country.
Forbes.com ranks Manila, our capital, as the city with the highest population density in the world. With a population of almost 1.6 million, it has a density of 41,014 persons per square kilometer. Cairo, Egypt is second with 36,618 per square kilometer. Hindi na mahulugan ng karayom ang Maynila : (
I think migration from Metro Manila will come in stages:
- First will be low-income earners who are forced to settle or rent in Metro Manila because of work. Many will relocate or go back home to the suburbs or even to nearby provinces.
- Second will be middle-class parents who want to live in the suburbs but can’t because of work and their kids who are studying in Metro Manila.
- Third will be some high income earners who will call their weekend mansions in the suburbs their main home.
In Japan, because of its super-efficient transport system, many employees living in, say, the “equivalent” of Batangas City commute everyday to work in Caloocan City. I’m not saying that exactly the same thing will happen here (they have bullet trains and even Maglevs, we don’t). But it will happen to a certain extent.
Business relocation especially of Business Process Outsourcing companies
According to a 2009 newsletter of the Real Estate Brokers Association of the Philippines (REBAP), many BPO’s are starting to move out of Metro Manila due to high office rental rates.
Down south, there are currently 30 call centers in Muntinlupa and 13 in Laguna. Up north in Pampanga, there are 22. Expect more of them to relocate or to put up additional offices outside Metro Manila.
Last year, Jaime I. Ayala, President and CEO of Ayala Land, Inc. announced that several BPO’s have already reserved office spaces in their flagship project, Nuvali, in Sta. Rosa, Laguna; construction of the offices haven’t even started yet then. (I will write about this very soon.)
These are just a few of the changes that I think will happen. What do you think?
Let’s hope that whoever occupies the highest office next year will have the zeal to continue, even to hasten this program.
By the way, there’s a forum that’s discussing this development. See lots of pictures and interesting comments from those who have experienced the new PNR.
Thank you so much.
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Hello Happosai
According to you:
“1. The first commercial run of the DMU (Diesel Multiple Unit) is from Tutuban to Bicutan.”
I based my post on the announcement made by the official website of the Philippine government.
“2. Fare from Tutuban to Bicutan is 15 pesos not 16pesos.”
Again, I based my post on gov.ph’s news. I suggest you also tell them.
Also, just this Tuesday, Aug. 25, I got in touch with the office of PNR’s Area III-Manila Division under the Engineering Dept. I talked to a certain Mr. Wilfredo Llabitan who told me that fare from Tutuban up to Bicutan is neither 15 nor 16 pesos, it’s only 10 pesos. He wasn’t very sure, though, coz PNR employees get free rides. I have spoken with Engr. Gilbert Patulot, the manager of Area III, but I wasn’t able to confirm this with him. But if you ride PNR everyday, I’ll take your word over theirs any time.
I’ll Divide your third comment into two
“3a. Once the line is completed the DMU will only travel from Caloocan to Alabang…”
Have you checked the official website of PNR?
Click on Projects/Northrail-Southrail Linkage Project. It has 2 phases:
Phase 1 – Caloocan to Alabang
Phase II – Alabang to Calamba
Per its brief, the project is “expected to provide an alternative means of mass transport service that is fast, reliable and affordable.”
Among others, the scope of Phase II includes (but is not limited to) the following:
- double-tracking of more than 27 kms from Alabang to Calamba
- rehabilitation of existing stations
- construction of new stations in Pacita, San Pedro and Sta. Rosa, Laguna
- repair and reconstruction of 5 bridges in Laguna
- supply of railcars (I wonder why they didn’t say rehabilitation of railcars), etal.
It’s true that mention of the 21 new DMU’s was made only in Phase I, but is it far-fetched that very soon, some if not all of these new DMU’s will run all the way to Calamba? For how can they realize their vision of providing an alternative means of mass transport service that is fast, reliable and affordable, if they will only use DMU’s up to Alabang? Why go thru the entire scope of Phase II if no new DMU (according to you) and, therefore only refurbished coaches, will run from Alabang to Calamba?
Lastly, I don’t think the Ayalas, Lucio Tan, the Gotianun’s, the Ng’s, the Quiros family, the 4 car companies and Coca-Cola, who are among biggest investors in Sta. Rosa, Laguna, will agree that no new DMU’s shall service Sta. Rosa.
“3b…The DMU will not travel up to Bicol. The refurbished coaches will be use on the Bicol trip.”
You are correct that only refurbished coaches will be used on the Bicol trip, at least in the meantime, since only a single track is planned from Calamba to Bicol. Eventually, some of these new DMU’s will get old (then refurbished) and be replaced with new ones. I suppose these “now-new-but-eventually-to-become old” DMU’s will service the Calamba to Bicol route. PNR didn’t say they will no longer purchase additional DMU’s in the future aside from the 21 new ones.
The single track from Calamba to Bicol is the immediate plan. But nobody knows if and when double-tracking from Calamba southward will begin; it’s not improbable.
Thanks a lot for dropping by, Happosai. And many thanks for the heads up on the skyscraper thread re PNR, will surely check it out.
My best regards
Some correction on your article back there.
1. The first commercial run of the DMU (Diesel Multiple Unit) is from Tutuban to Bicutan.
2. Fare from Tutuban to Bicutan is 15 pesos not 16pesos.
3. Once the line is completed the DMU will only travel from Caloocan to Alabang. The DMU will not travel up to Bicol. The refurbished coaches will be use on the Bicol trip.
Thank you for posting here our PEX PNR Thread. However you can also check the Skyscrapercity.com PNR thread here. http://www.skyscrapercity.com/showthread.php?t=931896
Thank you…
I’m sorry for this very late reply, BJ.
Indeed, the playing field in the local real estate market will be somehow leveled in favor of small players who can only afford to buy and develop land far into the suburbs or in nearby provinces. Marketing those faraway projects will no longer be as difficult as before.
Great that you mentioned the REIT Law in the context of the improving transport and infrastructure systems, because all these things will also level the homeownership playing field in favor of ordinary Pinoys. Add to them the recent lowering of Pag-ibig’s interest rates. Let’s hope they go down futher.
Many parts of the real estate puzzle are suddenly falling in the right places, right? This is a great time to be in the property market in spite of the assertions of many naysayers.
Thanks for dropping by, BJ.
It is good to know that the congestion in the Metro Manila area will improve somehow. This is an opportunity for small developers and builders to actually play and compete here in the real estate market of the Philippines.
Especially with the upcoming REIT Law, foreign investors will have more reasons to invest in REITs here in the Philippines.