Property boom in Philippines spur flooring and home improvement industry growth

A newly industrialized economy, Philippines, is gaining attention for its booming economy. Once considered a lager in economic terms, the country is well poised to become a glowing star in Southeast Asia. According to the International Monetary Fund (IMF), its GDP is estimated to be about $250 billion, making it a top 50 economy in the world.

Such growth is underpinned by a continued and strong remittance from its overseas citizens and a growing middle class. Global rating agencies such as Moody and S&P have upgraded the rating of Philippine’s national debt, enticing the flow of foreign direct investment (FDI). The Bangko Sentral ng Pilipinas (BSP) in April announced that FDI rose sharply to $202 million.

In the light of such progress is the property market boom in several key cities in the country. Multinational Corporations (MNCs) have been snapping up commercial spaces, as the country becomes an outsourcing destination for global companies. This creates a ripple effect on related industries, most significantly in the flooring industry.

Local flooring companies have largely benefited from the property boom.  These companies have conventionally used imported flooring materials such as high resilient flooring materials. As the country developed, local companies began to implement import-substituted products by introducing their own line of affordable flooring. Such flooring companies began to sprawl their dealership network to high growth region such as Metro Cebu.

Often, these companies may expand their product range to include home improvement appliances to complement their flooring business. By providing a diversified product portfolio, they are able to capture and maintain their market leadership. As such, it is no surprise that local flooring companies began to flourish rapidly with the property boom and foreign companies are keen to enter into the market.

“ We are excited and hopeful to enter the Philippines market. The country has made great leaps forward in its economic progress. It is no doubt that Philippines will be the next success story in Southeast Asia and we hope to be part of this growth story”, said Raymond Foo, Franchise Manager (Asia Pacific) of Evorich Holding Singapore.

The influx of international firms such as Evorich Holding will likely to add human capital and value added skill sets to propel the next growth in Philippines economic growth. As such, the opening up of Philippines’s market reflects a desirable and growing interest in the Philippines’s market.

Before rushing in to capitalize on the current growth wave, international firms should adopt a “glocalisation” method. The success of international firms often lies in understanding local culture, business environment and practices. By acquiring these insights and knowledge, one can fully fulfill its mission of going global and acting local in their business expansion beyond their home shore.