The Philippines’ Balik Probinsya, Bagong Pag-asa Initiative and the Real Estate Development Sector during the COVID-19 Pandemic: Some Policy Morals

Abstract

The Philippine government attempts to mitigate economic setbacks of the COVID-19 pandemic, as the country has been included in the top 20 countries with highest infections worldwide and the highest in Southeast Asia, already at 300,000 level. The lockdown of 198 days as of 1 October 2020 contributed to the continued dismal performance of the Philippine economy, which is now officially in recession at -16.5% preliminary growth rate reported in the second quarter of 2020, worse than the recession during the Asian Financial Crisis. Given these adverse effects to the economy, this paper studies the role of the real estate development sector to serve as a catalyst in providing new sources of value-added to the macroeconomy under the “new normal”. Using the lens of institutional economics with tenets of economic history, this paper attempts to investigate the feasibility of reviving an old program of the Philippines to decongest city centers, particularly the National Capital Region. Under the initiative “Balik Probinsya, Bagong Pag-asa” (translation: “Return to the Provinces, with New Hope”; shorthand, BP2), the national government primarily aims to decongest the region to aid in distancing protocols warranted by the COVID-19 pandemic. While it is important for a multi-sectoral approach to this initiative, economic opportunities aligned with health protocols must be placed so as not to defeat the program objectives. We suggest ways of effective collaboration and cooperation between various real estate industry stakeholders to ensure success and sustain development through this re-lived initiative. We also cite particular cases of township models that have been implemented and are continuously developed that will emulate the multi-sectoral approach to this program. A policy framework for the real estate development sector of the Philippines is provided to highlight the importance of its role and potential contributions to this initiative.