INFLATION HEDGE

Thought of the day:

For nearly a decade now, rental rates in Metro Manila’s central business districts have been locked in the same band—Php800 to Php1,000 per sqm. Once in a while you’d see Php1,200 per sqm, but only in designer-finished, ultra-prime towers.

The pandemic pulled rents down to Php600–Php800 as expats left. And yet, years later, even with all the supposed “recovery,” we’re still hovering at that same Php800–Php1,000 level.

Here’s the kicker: over the last 10 years, Philippine inflation has averaged 3.4% annually. If rental income were truly a hedge against inflation, today’s rates should be closer to Php1,130–Php1,415 per sqm.

But they aren’t.

So maybe the question isn’t about recovery at all. Maybe the real question is: Have we been quietly building up an oversupply of condos—and are stagnant rents now revealing the cracks?