Mixed messages appear to be what is coming out of the Philippines property market as two events related to the market have somewhat cancelled each other out in the messages they sent.
The first was a report released in the country that referenced zero index growth for 17 out of 25 commodities that were tracked by the report. This essentially shows that the price for building materials is staying the same, and that ultimately bodes well not only for property developers, but also for people interested in purchasing property in the country because the savings will be passed down the line all the way from the producer to the consumer.
The zero index growth for these important commodities has been the result primarily of a good balance between supply and demand that has neither seen the supply side take over and devalue the product, nor has it seen the demand side take over and create hyperinflation along the lines of what is happening in some of the nearby property markets.
This news, while good in nature, was partially offset by the fact that the stock market in the Philippines tumbled a whopping 2.5%, creating a very sombre view amongst investors of putting more of their money into the market. The reason this news was bad for the property sector is that one of the companies hardest hit by the drop was Megaworld Corporation, a Philippine property developer that lost 6.5% during the day’s trading.
The only way that one could read positively into such a performance would be to conclude that the stock market's show was due mostly to speculations on what would happen in the United States rather than pessimism about the property market in the Philippines, and indeed, many analysts seem to be taking that point of view about the stock market downturn.
The only way to be certain about the reasons behind the tumbling stocks is to wait and see what happens to property developers in the Philippines once the economic stimulus package is announced by President Bush, something that is expected to happen quite soon.
